Roundtable: mediation

There is a ghost at the Gazette’s roundtable on mediation. Dean Acheson, US secretary of state under Truman, joint architect of America’s second world war lend-lease policy, and an influential foreign policy adviser almost up to his death in 1971, helped found our host, international firm Covington.

There is a wall of framed photos, news clippings, letters and handwritten notes. In one striking photo, Acheson is pictured shaking hands with Churchill before a map of the Atlantic. The images speak of negotiations, a search for common ground and deals done.

Acheson’s seems an appropriate gaze to meet under. As Covington partner Kenny Henderson puts it, Acheson was ‘a lawyer but also a politician and a diplomat – many mediation skills required there’!

As a tool, mediation has demands placed on it in very different contexts. That is reflected in our attendees, whose mediation experience covers high-value international disputes as well as SMEs, family and employment. In each arena, the role of the mediator is to facilitate agreement by the parties in dispute, through preparation, shuttle diplomacy and facilitated face-to-face meetings. As mediation body JAMS’s London chief executive Matthew Rushton notes: ‘Classically, mediators are taught not to go near the legal merits.’

The dividends a successful mediation can bring – saving time and money, arriving at a resolution that has not produced ‘winners and losers’, allowing more cordial relations post-agreement – has made it an easy sell to policymakers. Yet mediation is very far from the standard route taken to resolve disputes. How do those present feel about the progress mediation has made?

Karl Mackie founded CEDR (Centre for Dispute Resolution) more than 30 years ago. ‘In the commercial market there was another 5% growth over the last two years, which we’d say is a slowing of a trend,’ he begins. For ‘people brought up in the culture of the commercial court’, says Mackie, ‘mediation is part of the toolkit now, after a many years of campaigning and training among lawyers’.

He adds: ‘I think it’s fair to say it’s more patchy once you get down to lower-value and middle-level commercial claims, petty claims and small claims.’ He notes, however, that there are dispute areas that would suit mediation where it has not been used historically. CEDR recently completed a pilot project with the NHS Litigation Authority for example. ‘You would have thought mediation would be a really important technique in clinical negligence,’ Mackie says. ‘But actually it’s been under-utilised’, with the result that NHSLA has ‘huge cost problems’.

Returning to the high-value commercial sphere, Mackie acknowledges a ‘sense that the field is too narrow in terms of the elite mediators’. There are around 150 well-known mediators who practise a lot, but ‘it’s harder to get into the field now than it used to be’.

‘Of the cases we do now there might be, say, 30% that go to mediation. But the rest are negotiated out in a traditional fashion,’ Rosling King litigator Georgina Squire estimates. ‘It depends how willing the parties are to negotiate, because normal negotiations – commercial negotiations – are still a very fruitful way of resolving a case. You don’t need to mediate in order to solve a case prior to trial. Where we are stuck, when that doesn’t work, then mediation is extremely useful and [parties] see a way through to a deal.’

‘I think we are lagging slightly behind the civil side,’ Forsters family law partner Jo Edwards notes. A recent change in family law disputes was the introduction of Mediation Information Assessment Meetings (MIAMs), whereby parties are required to be assessed for mediation before they can issue an application in relation to children or money issues. Parties cannot, however, be compelled to attend mediation. As a result, Edwards says, ‘there’s no proper gate-keeping going on. [Parties are] not prevented from issuing even if they’ve not been assessed for mediation, and around 25% of respondents to [family lawyers group Resolution’s] last survey said even at that first hearing, judges aren’t even asking about whether [the parties] have been assessed.’

Annmarie Carvalho, family lawyer at Farrers, adds: ‘As a family mediator, one of the most frustrating things is to have someone turn up for that MIAM [with] their application in their back pocket. They’re just there to get you to sign it. That happens a lot.’

‘There is this resistance to mediation,’ Rushton says. ‘It’s there in… commercial, it’s there in family. It seems to me that if people can avoid it then they will, and it really needs a judicial push and some legislation.’

Client education is key, Simpson Millar partner Zee Hussain suggests, notably in the SME market: ‘We still come across clients in the commercial space who, while they may understand that mediation is available, don’t really have an appreciation of [how] this can help resolve their issue.’ He adds: ‘Getting them to sit down and formally look at mediation as a viable alternative is something we’re still having to do. We’re seeing an uptake now because we’re going through that process. We’re educating clients.’

‘In the commercial sphere the big difference from perhaps 15 or 20 years ago is that mediation is no longer regarded as some mystic art,’ Gordon Dadds partner Adrian Bingham observes. ‘Organisations like CEDR have done a great job of training and informing people. Many barristers who are taking part in mediation will themselves be mediators or have been in training. So, it holds no fears for them… mediation is part of the dispute resolution landscape in a way it certainly wasn’t a few years ago.’

‘The mystique has gone,’ Squire concurs. ‘[But] I think it’s a shame that courts cannot impose mediation in commercial cases. They can put a stay in place; they can create a window for mediation; they can make us rewrite letters or even draft witness statements to tell the court why we haven’t settled; but I think that’s the one thing that it would be really good if they were able to do – to order that a mediation happen.’

‘There is a debate now in the mediation community – has it gone far enough in allowing courts to compel entry into the process?’ Mackie asks. ‘Not to compel settlement, which is different and in breach of human rights legislation, but merely to say to people, “you must sit down and try and resolve this sooner”.’

Why compulsion to mediate when the parties can engage in direct outreach? Henderson notes that mediation can shorten a dispute where lawyers on either side are ‘glossing or polishing the merits’ in advising their own clients. A mediator who is highly qualified and across the ‘nitty gritty’ of a dispute can be highly effective in getting parties to reflect on the real strengths and weaknesses of their position, and the risks they run in letting a dispute run to trial.

Employment disputes tend to have features that make mediation a challenging option. As Lewis Silkin employment partner Karen Baxter notes: ‘There is this “David and Goliath” element to any employment dispute, and a suspicion about being in a room with Goliath.’

This affects the conduct and style of a mediation, she adds: ‘I’ve done some mediations where the employee has refused to leave [their] room and will not come to the table. The lawyers have got together but they’re sat there saying, “I will not go in a room with them again after what they did to me”.’

To a degree, mediation is built into employment disputes through the involvement of conciliation service ACAS. Experience of ACAS conciliators varies widely, though. At its best, the process works well, Baxter notes: ‘Some conciliators fight tooth and nail to try to get a dispute resolved.’

As in commercial disputes, the involvement of a good conciliator is especially welcome, she adds, ‘if you’ve got a potential claimant who doesn’t necessarily understand the weaknesses in their case’.   

Points of tension

There is, Bingham points out, an obvious tension in promoting mediation through compulsion. Moreover, the timing must be right for mediation to work, and correctly judging the right point at which to attempt it depends on highly variable factors.

Bingham says: ‘One concern I have about the court prescribing that parties should go into mediation, is if the court does it at the wrong moment in the ebb and flow of the process. Then the parties may say, “right, we’ve been to mediation. It didn’t work. We’ll go to court now”. Whereas, he adds, ‘if you give them the space – a little longer– get the expert evidence in, get witness statements in – then maybe they’ll crack it at that moment rather than another.’

KGW Family Law’s Karin Walker notes that compulsion compromises another selling point of mediation. ‘One of mediation’s great benefits as a process is that it’s voluntary. It’s much easier to hold people within a voluntary process than something that they’re compelled to do,’ she says.

‘I think that having courts actually order mediation would be a mistake. That’s been one of the problems with the MIAM… people attend with 90% of their mind on the court process. They’re ticking a box and fulfilling an obligation. Steering them away from that is not always difficult, but it’s certainly a job that is relatively hard to do.’ Forced into mediation, she argues, parties would ‘do it to fulfil an obligation and then go back to where they felt more comfortable’.

In a commercial context, insurers can have a significant influence over the way disputes are handled and the mediation sphere is no exception. Here, experience of insurer attitudes to mediation varies.

‘We deal with a lot of claims against parties who are insured and so there are insurers involved in the process,’ Squire says. ‘We don’t see them resisting mediation.’

Insurers can, though, focus closely on cost, she notes: ‘We find very often that we can agree a way through by a restricted time mediation. [For example], four hours’ restricted reading time by the mediator so they’re very much focusing on what it’s going to cost them.’

Squire adds: ‘The other issue I see a lot with insurers is that they don’t turn up at the mediation.’ Being ‘down the end of the telephone… creates a wholly different dynamic to the process and, in fact, if we know it’s going to be like that we have suggested there be a mediation by telephone.

‘So, there might be a very short meeting between the lawyers then everybody breaks up. The mediator then deals with everyone by phone. That actually proves more effective, because the mediator can speak direct to the person who is making the decision, who was otherwise not in the room.’

For insurers, Gordon Dadds’ Bingham notes, mediation ‘sits well with ombudsman services and other [non-court options] so I think it’s part of the industry expectation’.

He adds: ‘My experience is that increasingly, and certainly for the bigger cases, representatives from the insurers are attending or making sure that they’re on the end of the line. I don’t regard insurers as hindering the process. I think they are facilitating [it].’

The absence of a key participant can inevitably be a drawback. As CEDR’s Ana Bauder points out, mediations ‘develop’ as parties gain insights into their own position and that of the other side. An insurer who has not been directly involved in the mediation process misses out on that development process. ‘The problem is, once you’re getting to the end of the mediation and getting to some sort of agreement, getting [the insurer] on board, when they have not been present or up to speed with what was going on, makes it very difficult to get them to sign a deal.’

As Henderson adds: ‘You want the insurers to hear about the weaknesses in the case.’ An effective mediator will have prompted parties to reflect on their position in this way.

A different dynamic exists in the ‘middle market’, Mackie notes, where a high volume of claims has not been served by the development of appropriate mediation models.

Too few

The discussion turns to the issue of capacity. If there is the potential for mediation to resolve more disputes, how can the number of mediators be increased? The figure of around 150 established commercial mediators, mentioned by Mackie at the outset of the discussion, is recognised as insufficient by those present. Similar problems are cited in the area of family law.

To develop both skills and reputation, mediators need a decent throughput of cases. As Carvalho reflects: ‘You need to get into the groove of doing [it]. Most mediators we’re talking about in the family context will be practising as lawyers 90% of the time. The skills they use as lawyers are actually quite different to mediation skills. You might end up getting one mediation two years after you’ve qualified and bowling in there and starting to give your opinion on what should happen.’

And that, she notes, is ‘absolutely not what it’s about’.

Edwards notes that the number of family mediations ‘is increasing astronomically’ but adds: ‘We’ve got about 1,100 family mediators who’ve signed up with the Family Mediation Council, which is the body now receiving regulation. About half of those are accredited. That’s nowhere near enough. With the MIAMs requirements, there are MIAMs deserts in certain parts of the country.’

To change that, referrals between firms need to improve. Firms, Walker adds, should ensure ‘that work is diverted to their younger, more newly qualified mediators and give them that support to do the work’. As she observes, ‘you don’t gain a reputation by anything other than doing the job’.

Rushton cites problems in increasing the number of mediators: ‘We’re all supposing, I think wrongly, that the mediation market is in some way meritocratic. It isn’t and the whole thing militates against that. You can be a very, very good mediator and no one’s going to know.’

Mediation bodies and others can list new mediators as an option, but Rushton points out that if one name is recognised by both sides they will get the job. In consequence, ‘it does make getting new blood into the field terribly difficult. One of the problems we face, certainly on the civil and commercial side, is that it’s terribly off-putting to people of genuine talent. I spend a lot of my time telling people: “Do not become a mediator. Forget it, you will never be appointed. I don’t care if you’ve run a merchant bank, I don’t care if you’re the best negotiator. You are never going to get appointed ahead of these dozen QCs who have been working in financial services for 40 years.”

‘It isn’t going to happen and that is a pity… if they’re from a non-legal background particularly, they haven’t a prayer.’

That may change, Mackie suggests, where mediations are set up differently and the individual ad hoc appointments that have prevailed give way to ‘package schemes’. He instances the Post Office’s mediation scheme, set up to deal with Post Office master disputes, and the design of the NHSLA pilot carried out by CEDR. ‘They’re working with an organisation,’ he explains. ‘They’re not actually choosing the individual mediator at that point.’

Edwards says Resolution has looked to the courts to assist: ‘We’ve worked a lot with courts around the country to try and persuade them to keep a list of mediators. It’s a really good idea in principle, but in practice I find it can be quite difficult.’

Time and cost are two considerations leading parties in family cases to mediate disputes, Carvalho says: ‘The delays in the family courts are such that your average mediator who’s reasonably available is hopefully going to be able to… reach some sort of conclusion within a few weeks.’ By contrast, she says: ‘We’d be facing years in court for our clients. If we’re waiting for hearings it’s not unusual to have an eight-month wait for the next hearing. Obviously, in that time, the fees are going up.’

On the commercial side the amount paid to mediators can be an issue. Where parties are seeking to reduce the cost of a mediation, the rates paid to the mediator can be a more common target than the client’s own legal team – this despite the latter making up 85% of the cost of a typical mediation. Bingham calculates that mediator fees in some commercial disputes equate to £55 an hour.

‘£55 an hour is absurd,’ Rushton responds. ‘Why would you do a commercial case for that when you’re sitting in a room like this, heavily lawyered… both sides [charging] up in the high hundreds an hour. The cost of the mediation is not what you pay the mediator, the hire cost of the room, it’s what you’re paying counsel.’ He adds: ‘There’s this huge push to drive down mediator fees to nothing, [but] I don’t see any of the law firms discounting their fees at a similar rate.’

A message the mediation community needs to project more effectively is outlined by Henderson: ‘The focus on the cost of mediation so often seems to be how much you pay the mediator, the advisers, et cetera. [Whereas] the real cost is the opportunity cost of not mediating. You can save enormous sums of money by mediating at the right time and help preserve [a working] relationship.’

Pressure cooker

As the discussion draws to a close, attendees reflect that the character of mediations is changing in key ways.

Referencing the ‘tradition’ of mediations ending at midnight – whatever the complexity or relationship of the parties – Mackie says: ‘I think we got into the culture of the one-day “pressure cooker” approach to mediation. There are some advantages to that, but equally I think lawyers should get more creative about using mediation in a more open way and saying, “well, actually what we want to do with this action is just have a strategic review. We may not have enough information yet, we may not be ready to settle yet, but we would value just getting round the table and just seeing what the real gaps are, what core issues are dividing us, and then we’ll reconvene for a second phase of mediation when we’re ready.”’

Mackie’s colleague Bauder adds that mediation is increasingly combined with other forms of alternative dispute resolution to resolve some issues in a wider dispute. Here a series of mediations might be followed by expert determination on unresolved issues. ‘So, the parties are getting very sophisticated in knowing what they want,’ she concludes. ‘I think that’s a very positive thing.’

Bingham outlines another model, whereby a mediator could be asked for ‘neutral evaluation on a without prejudice basis’.

Rushton posits yet another model, used by JAMS on occasion. Here the ‘Med-Arb’ (mediation followed by arbitration if mediation fails) is replaced with ‘Arb-Med’. Rushton explains: ‘An arbitrator has written his decision. But he keeps it in his pocket and he says, “we’re now going to mediate this”. I think in all cases mediation has reached a resolution before we’ve said, “right, we’ll open the envelope”.’

Atypical though this is, it seems to underline the strength of mediation as a model and explain the faith those around the table place in it. Mediation supplants situations that have ‘winners’ and ‘losers’ with a resolution through which both sides find a way to agree a result and then move on.

• This roundtable was kindly hosted by Covington