Confidential

The fundamental principle of mediation, and also its primary advantage, is that it is a confidential process. Confidential that it is taking place, confidential in what is said and done in the mediation and confidential in its outcome. Unless the parties (and the mediator) agree otherwise.

This should give the parties the confidence that whatever is said and done, whatever unsuccessful offers are made to settle, none of it can be shared outside the mediation group unless agreed. Of course, when a deal is done, others may need to be informed so that the necessary payments and/or actions can be taken, but the overriding principle is that it is a confidential process; and without prejudice, so if the mediation does not settle, whatever is said and done in the mediation cannot be repeated in court.

Voluntary

Mediation is said to be a voluntary process and there is no doubt that if a party does not want to come, the mediation cannot take place. All parties need to be present. However, the courts now expect a party to try to resolve matters before going to court, and the court may well impose cost sanctions if a party refuses mediation, so there is a strong nudge towards mediation even if it is not mandatory.

Similarly, many contracts now have a mediation clause, so, unless all parties agree to waive it, mediation must be tried. But most parties choose to mediate in the knowledge that it must be tried at some stage, so the real decision is not if but when, where and with whom?

Many parties, when asked what they really need to be able to settle at the mediation, will say that they want to end the misery of the dispute, not least the misery of it dominating their business and home lives as well as ‘wasting’ precious management time that could be better used in wealth-generation.

Mediation provides an opportunity to put the litigation to one side and, for a day, allow commercial considerations rather than legal arguments and rights, to prevail. There is little to lose and much to gain in taking a case to mediation.

Requires those who have authority to make decisions to be involved

Each party needs to attend with a decision-maker who has authority to settle in the mediation. Ideally, this will be full authority. It can be difficult, and sometimes embarrassing, if the agreed limit of authority needs to be exceeded resulting in several phone calls having to be made to a person who has not experienced first hand what has been said and done in the mediation, and not seen the body language and heard the expressions of the other party.

Putting the team together for a mediation can be challenging. After the decision-maker there needs to be careful consideration of who else attends. Is the support of a lawyer preferred? Experts have usually done their reports, and met to agree common ground, so their presence is rarely justified. Often others are included in the team for comfort, but the bigger the team the more people who need to be kept engaged and committed, otherwise they may become a blockage to settlement.

Enables participants to determine the outcome

Mediation gives the parties the freedom to put litigation aside and to enter into a commercial negotiation in an effort to find a settlement. Anything can be tried in an effort to structure a deal, and can be abandoned if it is not acceptable without it endangering a party’s position. Parties are not committed until the deal is put into writing and signed. Then it becomes a contract. Up to that moment anything goes. A deal in the mediation is whatever the parties say ‘Yes’ to. Often it is a deal that could not be made in court – eg stage or deferred payments, future business, payment in kind such as services, even take-overs and joint ventures have been known.

Can lead to a binding settlement if the agreement is written down and signed

It is quite usual in the UK for settlement agreements to be made into a Consent Order, which may also be a Tomlin Order (where the terms of the settlement are kept private on an attached Schedule), for sealing by the court.

If proceedings have not commenced then a simple Heads of Terms is not uncommon. It is very rare for a mediated deal to fail because the deal is negotiated by the parties and so they own it, and have an investment in it working.

Offers access to justice

The benefits of mediation over the court system are tried and tested.

• Mediation can be quicker, less stressful and cheaper than going to court
• Once a settlement has been reached a mediation agreement can be drawn up. Parties tend to keep to the mediation agreement because they have prepared the terms themselves.
• Mediations are completely confidential and the information discussed within them cannot be used in court or any other legal action issued at a later date.

On those occasions where mediation doesn’t resolve the dispute, court proceedings can follow. Mediation therefore offers participants better access to justice than a court process alone: it provides a chance to settle the dispute without recourse to the court, bringing all the advantages listed above, and yet until a final settlement is reached, the back-stop of the court process is preserved.