Six Key Factors ‘In and Outside the Box’ That Can Make or Break a Mediation

Stuart Evans, Partner at Spencer West and accredited mediator, looks at some of the issues that may aid or frustrate a successful mediation  

So, the parties to your dispute have agreed to mediate, to avoid what may be challenging and costly ongoing or prospective litigation. A mediator has been appointed, the prep has been done and you are good to go. Mediation can deliver results, but what are the things to look out for on the day which may help to resolve the matter or, conversely, blow it apart? 

I set out below six issues to think about as your mediation unfolds. The subject of mediation has been well-trampled ground, so it goes without saying that these are not the six things to think about; no two people’s lists would be the same. Some may be more obvious than others, but in my view they can all be significant. 

I will endeavour to avoid the jargon that rears its head when mediation is talked about, so this will be a BATNA and WATNA free zone, with no references to red lines, dying on the barricades or salami slicing.  

1. LET IT OUT

This is a suggestion which may be as surprising as it is counterintuitive. The usual approach to a mediation will be that you listen carefully to what is being said, pick up on body language and other non-verbal hints and speak with equal care, but above all, you stay calm. Certainly, as a party representative I endeavour to take this approach, leaving displays of emotion to very specific circumstances.  

In mediation, however, there is a case for a party letting the fire emerge from within at an early stage. You may have been involved in a case that has been lengthy, expensive, and has given you sleepless nights. Moreover, you may be furious with your opponent. These are extremely strong feelings, so it will be very difficult for you to focus on the resolution of the dispute whilst this boils inside you. Although there is no “one size fits all” way to deal with this, letting the heat out may be the right way for you to dissipate and express those feelings, and give you the headspace to think more calmly about what then needs to be done. 

This approach can have a dramatic impact. I have heard a story about a party to a tense mediation allegedly standing up, ripping their shirt apart, revealing – whilst buttons were bouncing on the table – a scar on their chest from a heart operation brought on by the stress of the dispute. This let the heat out and made a very powerful point.  

For most, emotional displays are unlikely to be as dramatic as this, but letting the mediator and the other side know how angry and aggrieved you are may help you to feel calmer and concentrate on the process ahead. If you don’t do this, your emotions may block you from approaching the mediation with the clarity of thought that you need. 

2. Beware the “box tickers” 

Mediation is not generally mandatory in the UK, but the courts will take a dim view if a party unreasonably refuses to mediate, penalising them in costs. However, as mediation is confidential, it is open to a party that doesn’t want to risk such penalty to turn up and fold their arms. No engagement. We mediated. Box ticked. No costs penalty.  

Putting a tick in the box of mediation can be irksome to other parties, but the confidential nature of mediation will usually mean that it will not be assessed by a judge. 

Such behaviour can usually be identified quickly: the other side have turned up with management that have a hidden sign-off process which means – in reality, despite what may have been previously confirmed – no authority to settle. Perhaps they are sticking to the settlement figure that has previously been put forward and not a penny more (or less); or they are resistant to meetings with individual members of each party; or they will not answer core questions that may help to narrow issues, or supply information for the same purpose. Full disclosure is not a prerequisite of mediation, so cards may, regrettably, remain very close to a party’s chest. 

There are times where a party can behave like this, and then suddenly, when everyone is going to get their coats, phone calls take place and there is movement. I have seen spectacular late concessions come from nowhere, when all seemed lost. These tend to be the exceptions, though. If it’s clear that a party will be keeping their arms folded, then subject to the mediator’s views, it’s better to save your energy, end the mediation and live to fight another day. This day may come sooner than you think (see below). 

3. Think laterally about solutions a court can’t deliver 

I am back to boxes again, this time thinking outside of them. Mediation allows the parties to find a more creative outcome than any court  determination. In litigation, courts will determine who wins and loses, who pays how much money, and who has to do or not do something. Everyone knows where they stand, as parties assert what relief they are seeking from the outset. 

A mediator can help the parties explore what might work for both parties. This will usually not be who “wins” or “loses”, but it can – within a wider spectrum – cover payments and agreements as to who will do what. The exploration can, therefore, find deal drivers that may be important to a party, but which may not be obvious or within a judge’s jurisdiction.  

As an example, in a mediation, parties to a dispute over the interpretation of an agreement may work together and agree to terminate that agreement and replace it with a freshly negotiated one, free of the ambiguities of its predecessor. If there are sums outstanding, they could be set off against new business under the fresh contract. All without any admissions on either side. This would mine the “hidden value” and help to save face and preserve relationships, which can be key deal drivers.  

If this were to go to court instead, a judge could only decide, no doubt with great erudition, what the agreement said and who owes what. The likelihood of the parties then negotiating a solution along the lines of the mediation would be remote, as the “winner” would now have power and control. 

4. Be cautious about the mediator’s “informal view”   

In the event of no deal, the parties can opt for the mediator to give an informal, non-binding view of what they think the settlement terms should be, based upon what they have observed. Whilst this may seem attractive and assist in future negotiations, parties should think twice before going down this route.  

Why so? Well, when you have reached this point, the mediation is effectively coming to an end. The primary objective of the mediation, namely a negotiated settlement, has not been met. Although a view ensures that you do not go home empty-handed, it isn’t what you came for. 

A view would also be confidential and non-binding. If one party were happy with it, they could not do anything with it, other than to harness it to their settlement push. If the other party was not happy, they may simply disregard it, saying that this did not match their view of the merits and resisting attempts to make it stick. Of course, if both parties are unhappy (which is a very possible outcome), then there is mutual disregard; nothing is achieved. 

Further, whilst a mediator may have a strong grasp of the dispute and the applicable facts, law and merits, this may not always be the case. In addition, if there is litigation in tandem, the parties may still be some way off trial (the ultimate crucible), and may not have gone through disclosure, witness or expert evidence. The picture on mediation day may look very different months, or possibly years down the line, when all the cards are on the table, face up. 

None of this is intended to be a blanket “no” to an informal view. There may of course be a place for it, and it could be persuasive in negotiations once the mediator has stepped away. One variation is for the parties to agree to go to expert determination instead. This is another type of alternative dispute resolution (ADR), which will usually be final and binding in terms of the merits of the case (rather than settlement parameters). However, this also needs to be carefully considered, as there are pros and cons with this form of ADR as well. 

5. Be persistent in getting a deal signed off on the day 

If you have reached agreed terms, then strike whilst the iron is hot. Ensure that the written terms accurately reflect what has been agreed and that they will “stick”; the mediator can be a useful resource in this part of the process.    

The agreement of the settlement documentation can become drawn out, so be prepared with an “oven ready” draft that reflects your best expectations. If it is just a number, that will likely be quicker than where there may be lots of moving parts or, possibly, preconditions that will need to be met.  

If you are close, then unless there are good reasons why you should hold over (e.g. trains to catch, fatigue, loss of key persons, complexities that need time to think about), then persist and get the agreement signed off. If you can’t manage that, then at least get heads of terms/action plans agreed. 

If you hold over, there is always the chance that one or more mediation attendees could feel differently about the deal once they have been released from the pressure, slept on it and, potentially, woken up with a slightly rosier view of their case. 

They say that mediations often end up with both parties feeling equally dissatisfied. With that in mind, a few sleeps on an unsigned agreement may result in things coming undone. Whilst that is a party’s prerogative, it does not mean that a future deal (if available) will necessarily be better for them. 

There is a school of thought that advocates a two-day mediation, to give parties more time to get to sign off. Whilst this has attractions, leaving aside diary logistics, it can lead to day one going slowly, with the pressure of a one-day mediation pushed into day two. 

6. Keep up the pressure – things change 

If you haven’t managed to get to yes, don’t give up. All may not be lost, even with the box tickers (they may just have been testing your patience and resolve).  

Sometimes, if the parties are close, then with the mediator’s help if needed, you could still reach a deal. Keep pressing; a mediation may succeed a short number of days or weeks after mediation day. 

And for those mediation days that feel like 8 hours of your life you will never get back; things change. There may be moments of opportunity at any stage before trial (and even during a trial), as business results wax and wane, documents are progressively disclosed, witnesses finalise their evidence, expert reports reveal independent positions and decision makers go through swings in assessments and confidence. A failed mediation day may not, therefore, mean a failed settlement process overall. 

If you would like to know more about mediation, alternative dispute resolution (ADR) or litigation avoidance, or have a query about your commercial dispute, please contact Stuart Evans of Spencer West at [email protected].