MEDIATION - Will it give you the result you want?



There is increasing pressure from all sides that disputes, whatever their nature, should be kept out of the courts and resolved through mediation or another form of Alternative Dispute Resolution (ADR). Even the UK Intellectual Property Office runs a mediation service for disputes (http://www.ipo.gov.uk/patent/p-other/p-usebuy/p-usebuy-infringe/p-usebuy-infringe-dispute/p-usebuy-infringe-dispute-mediation.htm).


Pre-Action Protocols


Litigation now takes place only after compliance with Pre-Action Protocols and with close management by the courts.   Parties have to set out their case in detail in a letter of claim and provide supporting evidence before issuing proceedings.  Parties are also asked at an early stage in any proceedings whether they have considered or attempted mediation.   


Under the Civil Procedure Rules that govern all civil litigation in the English Courts it is clear that Pre-Action Protocols require the parties to potential litigation to consider alternative dispute resolution procedures.  The parties may be required by the Court to provide evidence that alternative means of resolving their dispute were considered. 


However, mediation is not the only option available; the Civil Procedure Rules make specific reference to the fact that options for resolving disputes include discussion and negotiation and early neutral evaluation, as well mediation.


Grounds for refusing mediation


If a party refuses to mediate without good grounds for doing so the judge may penalise it in costs once the case comes to trial. 


In Halsey v Milton Keynes NHS Trust [2004] the court held that the following factors should be taken into account when deciding whether any penalty should be imposed on a party for failing to mediate:


1.             whether the claimant needed to set a legal precedent such as questions of infringement of an intellectual property right;

2.             whether the claimant had a reasonable belief that it had an unassailable case;

3.             whether the parties have taken part in other forms of ADR such as direct negotiation;

4.             whether a delay in the proceedings would have an adverse effect on the claimant, such as where the claimant is seeking an injunction to restrain ongoing infringement;

5.             whether there was a reasonable chance of settlement; and

6.             whether the parties had received and ignored encouragement from the Court to mediate.  




Mediation is not compulsory and not all disputes can be mediated.   Parties should think carefully about if and when mediation should take place.  It is important that sufficient information has been exchanged between the parties for them to assess their strengths in a negotiation.  In technical cases expert evidence may be required to resolve issues before mediation can take place. 


The more you know about your opponent's case and precisely which issues are in dispute the better you will be able to value the strength of the arguments.   


Mediation may take place before proceedings are issued, but often mediation takes place within weeks of a trial date.




Mediation can be a useful forum to convince your opponent that the value that you place on a dispute is the value at which they should settle rather than take the risk of going to Court. 


The strength of your position in a mediation will depend on the strength of your legal argument and on the strength of your evidence, just as in Court proceedings. 


Mediation is a more informal process than Court proceedings and the mediator's role is not to reach any decision in relation to the dispute.   Consequently, parties often go into mediation with a more relaxed attitude to the preparation and the presentation of their case. 


You should focus on convincing your opponent that you would be successful before a judge were you to go to court and that you have not accepted the arguments they have put forward.




Mediation may be a cheaper way of resolving a dispute than litigation, but it is not always that cheap.  In a dispute valued at £350,000 the mediator's fee is likely to be around £5,000 to be split between the two sides.  Once lawyers have prepared mediation summaries and attended  a twelve hour mediation, neither party may see much change out of £10,000. 




Even if mediation does not produce a settlement it may still be a useful exercise in terms of progressing litigation.  A party will often be more candid in a mediation about which arguments it is running seriously.     It is often the case that members of the opponent's mediation team include individuals who would be principal witnesses in court. You can sometimes use mediation to probe the strength of your opponent's case and judge the strength of the potential witnesses.


The mediator will judge his success against whether or not he achieves a settlement; he will not be too concerned about the nature or level of that settlement.  As a result, you should be careful about the information you give to a mediator in confidence.  Although the mediator may not tell your opponent what your bottom line is, once the mediator knows your bottom line it may affect the arguments he puts to your opponents. 


You should decide what your bottom line is before going into the mediation and not be persuaded to move from that position.  Mediation is a tiring and often boring experience waiting for the mediator to return from discussions with your opponents.  As the day turns to evening it can be difficult to remain focused on your bottom line.  


It is always a fine commercial decision to weigh any reduction in recovery or additional compensation against the obvious costs of litigation and the associated disruption to your business. 


If you do reach a settlement at mediation it will be recorded in a binding settlement agreement.  There may be issues that you want the agreement to cover, such as confidentiality, and it will be helpful to have thought these through before the mediation starts and to raise the issues before the agreement is drafted.




There is no doubt that mediation is sometimes a useful process for resolving disputes, but achieving what you want out of mediation requires careful preparation, a strong presentation of your case and a good understanding of how the process works.


In some cases mediation may be used as a delaying tactic to put off proceedings and as a threat to stop an opponent rushing off to court.  In the end no one can be forced to reach agreement or settlement through mediation and it will be a waste of time and money unless both parties are really prepared to co-operate. 


Contact Details

If you would like further advice about any of the issues considered above please contact Paul Northwood on 01869 331753 or email him at paul.northwood@northwoodreid.com.  


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This article is not intended to be, and should not be taken as being, legal advice. The law often changes and it varies from jurisdiction to jurisdiction; the information in this article is generic in nature and specific legal advice should be taken before acting on any of it.


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