Under the Civil Procedure Rules (CPR) the court has an obligation to encourage parties to use alternative dispute resolution (ADR) procedure if it considers it appropriate and to facilitate the use of such a procedure. Although the CPR defines ADR as any method of resolving disputes otherwise than through the normal process of the courts, in practice ADR usually involves mediation.

Advantages of mediation

Mediation is a procedure which enables the parties to proceedings, acting by agreement, to resolve their differences before an independent, neutral and impartial third party, the mediator. Mediators’ fees vary according to the value of the claim and the time spent mediating and the length of time involved depends largely on the complexity of the case and the parties’ willingness to compromise. It is generally accepted, however, that mediation is a shorter and cheaper process than litigation. A further advantage of mediation lies in the fact that resolution is reached by agreement; there is therefore less potential for animosity between parties thus helping to preserve personal and commercial relationships.

Disadvantages of mediation

A mediator is not a judge and mediation is not designed to determine parties’ legal rights and obligations. The point of mediation is to enable parties to reach a mutually acceptable resolution and parties do not have their “day in court”. There is no guarantee that an agreement will be reached and the mediator does not have the power to impose a solution; there is therefore the risk that parties will incur the costs of mediation in addition to the costs of litigation thereafter.

The court can penalise in costs any party which unreasonably refuses to use mediation. If one party wants mediation but the other refuses, the party that wants mediation may inform the court of its wishes and its opponent’s refusal. This may be taken into account when the court considers who should pay costs. Similarly, the party that refuses mediation should set out clearly its reasons for refusal in order to avoid or lessen such costs penalties.

Procedure

Parties wishing to use mediation can use court based mediation, if available, or a private mediator. Fees vary and publicly funded parties may receive assistance for payment of their share of the fee. If the court in which a claim has been issued does not operate its own scheme and the parties wish to use mediation, the case will need to be transferred to another court.

Once the mediation session has been booked parties are required to provide a position statement, copies of the main documents in the case and a completed form specifying who will attend the mediation session; parties should ensure that those attending mediation have the authority to make decisions and settle the matter. The mediation comprises an introductory joint session during which the mediator sets out the purpose of mediation and parties set out their relative positions, separate sessions during which the mediator moves between the parties to discuss settlement and a final meeting during which, if the mediation has been successful, a settlement document will be drawn up.

The parties should notify the court if the matter has settled or, if it has not settled, request directions for trial. Parties cannot use at trial information given for the purposes of mediation and all the discussions are privileged so that they cannot be disclosed to the court or any third party save by agreement.

For more information please contact Jatinder Sandhu on 020 7700 0265 or on  jatinder@percyshort.co.uk.

(updated 12.05.23)