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Advocates Edinburgh 081107

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A lecture delivered to 80 advocates and judges in Edinburgh on the development of mediation in England & Wales.

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Advocates Edinburgh 081107

  1. 1. The Growth of Mediation: lessons from England <ul><li>A presentation to the Faculty of Advocates’ Mediation & Dispute Resolution Group </li></ul><ul><li>on 8 November 2007 </li></ul><ul><li>by </li></ul><ul><li>Chris Makin FCA FCMI FAE QDR MCIArb </li></ul>
  2. 2. Who am I? <ul><li>A “normal” accountant in public practice for 18 years </li></ul><ul><li>Then a forensic accountant & expert witness for 20 years </li></ul><ul><li>Of which a mediator for 8 years </li></ul><ul><li>Now doing a couple of mediations a month </li></ul><ul><li>84% settlement rate to date </li></ul>
  3. 3. Rules of Engagement <ul><li>“ Death by PowerPoint” is for your future reference – I won’t cover it all today </li></ul><ul><li>If you can’t understand my weird Yorkshire accent – shout! </li></ul><ul><li>If I speak too quickly – shout! </li></ul><ul><li>If you have a pressing issue – shout! </li></ul><ul><li>...but time is limited </li></ul><ul><li>I will address Civil & Commercial Mediation only – not Family or Neighbourhood Mediation </li></ul><ul><li>This is the English experience, so I will use English legal language – sorry! </li></ul>
  4. 4. Outline <ul><li>Why Alternative Dispute Resolution (“ADR”) is now so important in the litigation process in England </li></ul><ul><li>The CPR framework </li></ul><ul><li>Encouragement by judges </li></ul><ul><li>When to mediate </li></ul><ul><li>What really happens </li></ul><ul><li>How to get the best for your clients </li></ul><ul><li>Examples & exercises </li></ul><ul><li>Open forum </li></ul>
  5. 5. <ul><li>“ All members of the legal profession who conduct litigation should now routinely consider with their clients whether their disputes are suitable for ADR” – Dyson LJ in Halsey –v- Milton Keynes NHS Trust [2004] EWCA 3006 Civ 576 </li></ul>
  6. 6. <ul><li>Lightman J : </li></ul><ul><li>“ The loss of a good night’s sleep is a real price to pay for litigation, a price which practitioners and indeed the parties all too often forget or underplay when the decision to litigate is made. In the case of mediation everyone can be the winner </li></ul><ul><li>the costs can be small; </li></ul><ul><li>a result may be achieved in a short passage of time; </li></ul><ul><li>and personal relations may be salvaged. </li></ul><ul><li>Mediation is not a universal panacea: it has its limitations and it is not always applicable.  But where it is available in my view no sane or conscientious litigators or party will lightly reject it if he fairly weighs up the alternative namely litigation , and any adviser who does so invites a claim in negligence against him .” </li></ul><ul><li>- conclusion to speech “The Trials of Litigation” in 2003 </li></ul>
  7. 7. The changed dynamics <ul><li>Civil Procedure Rules 26 April 1999 </li></ul><ul><li>A new Code – all past custom & precedent swept away </li></ul><ul><li>Judges, not solicitors, manage cases </li></ul><ul><li>Pre-Action Protocols require early disclosure of the parties’ positions </li></ul><ul><li>Judges encourage ADR </li></ul><ul><li>Parties are encouraged to settle </li></ul><ul><li>Sanctions in the new Part 36 </li></ul>
  8. 8. The new Code <ul><li>1.1(1) These Rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly. </li></ul><ul><li>1.4(1) The court must further the overriding objective by actively managing cases. </li></ul><ul><li>1.4(2) Active case management includes- </li></ul><ul><li>(e) encouraging the parties to use an ADR procedure if the court considers that appropriate, and facilitating the use of such procedure… </li></ul>
  9. 9. So judges must encourage ADR <ul><li>1.4(1) The court must further the overriding objective by actively managing cases. </li></ul><ul><li>1.4(2) Active case management includes- </li></ul><ul><li>(e) encouraging the parties to use an ADR procedure if the court considers that appropriate, and facilitating the use of such procedure… </li></ul>
  10. 10. What “ encouragement” ? Part 1 <ul><li>Dyson & Field, exors of Lawrence Twohey dec’d –v- Leeds City Council (CofA 22 Nov 1999) Ward LJ, Laws & Woolf LLJ agreeing </li></ul><ul><li>16: Damages are substantially agreed . …this is pre-eminently the category of case in which, consistent with the overriding objective of the CPR and the court’s duty to manage cases as set out in rule 1.4(2)(e), [ that ] we should encourage the parties to use ADR… </li></ul><ul><li>18: …I would also add the reminder that the court has powers to take a strong view about the rejection of the encouraging noises we are making, if necessary by imposing eventual orders for indemnity costs or indeed ordering that a higher rate of interest be paid on any damages… </li></ul>
  11. 11. What “ encouragement” ? Part 2 <ul><li>Cowl & Plymouth City Council [2001] EWCA Civ 1935 </li></ul><ul><li>Dunnett –v- Railtrack [2002] EWCA Civ 302 </li></ul><ul><li>Shirayama Shokusan Co Ltd –v- Danovo Ltd [2003] EWCH 3006 (Ch) </li></ul><ul><li>Burchell NF –v- Bullard & Ors [2005] EWCA Civ 358 </li></ul>
  12. 12. What “ encouragement” ? Part 3 <ul><li>McMillan Williams & Range [2004] EWCA Civ 294 </li></ul><ul><li>Tuckey LJ in allowing appeal to CofApp: “The costs of further litigating this dispute will be disproportionate to the amount at stake. ADR is strongly recommended.” </li></ul><ul><li>Ward LJ: £50,000 costs to date. “My heart sinks.” </li></ul><ul><li>Parties refused mediation because: “…it appears clear beyond any doubt that the mediation will not be successful because neither side are willing to change their position.” </li></ul><ul><li>Ward LJ: “In my judgment this is a case where we should condemn the posturing and jockeying for position … and thus direct that each side pays its own costs for their frolic in the Court of Appeal.” </li></ul>
  13. 13. The Audi TT 3.2 V6 quattro <ul><li>Court of Appeal judgment, 18 October 2007 </li></ul><ul><li>New Audi pulled to the left? </li></ul><ul><li>Quantum was £6,000; costs £100,000! </li></ul><ul><li>May LJ at 53 (last paragraph): </li></ul><ul><li>“ What I have found profoundly unsatisfactory ... is the fact that the parties have between them spent in the region of £100,000 arguing over a claim which is worth about £6,000. In the florid language of the argument, I regarded them, one or other, if not both of them, as “ completely cuckoo ”... “ This case cries out for mediation ” should be the advice given [ to both parties as early as possible ]. Why? Because it is perfectly obvious what will happen. Feelings are running high, early positions are taken, positions become entrenched, the litigation bandwagon will roll on, experts are inevitably involved, and, before one knows it, there will be a two/three day trial and even, heaven help them, an appeal. And what benefit can mediation bring? </li></ul><ul><li>to be continued... </li></ul><ul><li>Egan –v- Motor Services (Bath) Ltd [2007] EWCA Civ 1002 </li></ul>
  14. 14. The Audi TT 3.2 V6 quattro <ul><li>“ It brings an air of reality to negotiations that, I accept, may well have taken place in this case, though, for obvious reasons, we have not sought to enquire into that at this stage. Mediation can do more for the parties than parties sitting at the same table but hearing it come from someone who is independent. At the time this dispute crystallised, the car was practically brand new. ...perhaps a replacement vehicle...Audi’s good name intact and probably enhanced, but perhaps with each of them a little less wealthy. The cost of such mediation would be paltry by comparison with the costs that would mount from the moment of issue of the claim. In so many cases, and this is just another example of one, the best time to mediate is before the litigation begins. It is not a sign of weakness to suggest it. It is the hallmark of commonsense. Mediation is a perfectly proper adjunct to litigation. The skills are now well developed. The results are astonishingly good. </li></ul><ul><li>“ Try it more often.” </li></ul><ul><li>And with those words, the court rose! </li></ul><ul><li>Egan –v- Motor Services (Bath) Ltd [2007] EWCA Civ 1002 </li></ul>
  15. 15. The Halsey checklist <ul><li>The general rule is still that the winning party will be awarded their costs. But in assessing whether a party’s refusal to use ADR is reasonable, these tests will be applied: </li></ul><ul><li>Whether it is important to establish a principle or set a precedent </li></ul><ul><li>The merits of the case, since a party who reasonably believes they have an unassailable case may reasonably refuse, but a party who holds that view unreasonably may not </li></ul><ul><li>Whether other forms of ADR have been attempted, even though the Court recognises mediation as by far the most successful method </li></ul><ul><li>The cost of ADR; normally modest but may be disproportionate for a small case </li></ul><ul><li>Any damaging effects of delay, where for instance a trial is looming </li></ul><ul><li>Whether ADR has a reasonable chance of reaching a settlement </li></ul><ul><li>How strongly ADR may have been encouraged by the Court </li></ul><ul><li>Overall, the risk on costs rests with the party who refuses ADR </li></ul><ul><li>Halsey –v Milton Keynes General NHS Trust [2004] EWCA Civ 576 </li></ul>
  16. 16. What is mediation? <ul><li>“ Facilitated negotiation” </li></ul><ul><li>The mediator assists the parties to reach a solution they can both/all live with </li></ul><ul><li>The parties are in charge throughout the process; the mediator merely assists them to negotiate </li></ul>
  17. 17. An example <ul><li>The business neighbours… </li></ul><ul><li>… had not spoken for TEN YEARS! </li></ul><ul><li>Refused to join in first joint session </li></ul><ul><li>“ Gentrification” of a run-down area </li></ul><ul><li>Tarmac yard </li></ul><ul><li>Water ingress </li></ul><ul><li>£100,000 loss of profits per expert “report” </li></ul><ul><li>Rights of Way </li></ul><ul><li>Access to premises </li></ul><ul><li>The mediator works on the true aims of the parties </li></ul>
  18. 18. More examples <ul><li>Mother & Son … </li></ul><ul><li>… had not spoken for SIX YEARS! </li></ul><ul><li>£253,000 cash diversion claim </li></ul><ul><li>“ Lost a granddaughter” </li></ul><ul><li>“ Take cash off mother” </li></ul><ul><li>Defective vehicle </li></ul><ul><li>Four parties </li></ul><ul><li>Audi R8 or Lamborghini? </li></ul>
  19. 19. Statistics <ul><li>There are no national statistics for reduction in number of claims issued, number of mediations done, settlement rates etc. </li></ul><ul><li>Probably about 4,000 mediations a year, and rising </li></ul><ul><li>65% of the mediations are done by 65 mediators! </li></ul><ul><li>Many qualified mediators have never done a mediation </li></ul><ul><li>General impression that number of claims issued has reduced </li></ul><ul><li>Senior judges encourage mediation, but encouragement is very patchy in the lower courts </li></ul><ul><li>National Mediation Helpline 2006: </li></ul><ul><ul><li>16,432 calls to the helpline </li></ul></ul><ul><ul><li>Referred by Court 979; direct call 11,626; online 627; others/unclear 3,142 </li></ul></ul><ul><ul><li>Resulted in 2,686 mediations referred to providers </li></ul></ul><ul><ul><li>Settled before mediation 8.54%; at mediation 60.59%; within next 14 days 2.42%; mediation cancelled 3.06%; not settled 30.35%; others 12.02% (total 113.94%!!#@~?!!) </li></ul></ul>
  20. 20. Why does mediation work? <ul><li>The parties are in charge of their own dispute </li></ul><ul><li>All proceedings are in private, with no publicity </li></ul><ul><li>The mediator listens, but does not give any advice or make any judgement </li></ul><ul><li>In private sessions, the mediator gently discovers the true nature of the problem, and the compromise which would be acceptable to both </li></ul><ul><li>Many solutions involve an agreement which a court could never order </li></ul><ul><li>Everything is without prejudice, and anything told to the mediator will never be repeated in subsequent hearings </li></ul>
  21. 21. Advantages of mediation <ul><li>No winners or losers </li></ul><ul><li>No precedents set </li></ul><ul><li>Absolutely no publicity </li></ul><ul><li>Parties remain in control </li></ul><ul><li>Can take place at any time </li></ul><ul><li>Quick to arrange </li></ul><ul><li>Costs are modest </li></ul><ul><li>Maybe you won’t get a hearing until you’ve attempted mediation! </li></ul>
  22. 22. When to mediate <ul><li>Constantly review throughout each case </li></ul><ul><li>It’s never too late, but early is better </li></ul><ul><li>Ideally, when the main issues in the case are known but before heavy legal fees are incurred </li></ul><ul><li>“ Dancing with a gorilla” </li></ul><ul><li>Costs can quickly become more important than the original claim </li></ul><ul><li>Remember Egan –v- Motor Services (Bath) Ltd </li></ul><ul><li>Don’t regard an offer to mediate as a sign of weakness </li></ul>
  23. 23. How to prepare (1) <ul><li>Choose and agree the mediator </li></ul><ul><ul><li>Many are lawyers, but that’s not essential </li></ul></ul><ul><ul><li>Not necessary to choose a mediator with technical or detailed legal knowledge; the mediator must rise above the detail </li></ul></ul><ul><ul><li>Look at CVs carefully, and don’t reject just because the other side recommend </li></ul></ul><ul><ul><li>Go for the proven track record, and the personal and listening skills – most parties really need a social worker! </li></ul></ul><ul><li>Prepare a brief bundle, ideally agreed with other side. Not a trial bundle, but should contain key documents and your 1-4 page summary of the issues </li></ul><ul><li>Calculate costs, and make a realistic estimate of costs to end of trial; the mediator will need these </li></ul>
  24. 24. How to prepare (2) <ul><li>With your client: </li></ul><ul><ul><li>carefully consider the litigation risk of each element of the claim </li></ul></ul><ul><ul><li>assess carefully the best and worst outcome they can live with </li></ul></ul><ul><ul><li>constantly consider the conclusions the other side will be reaching during the same process </li></ul></ul><ul><ul><li>if each side thinks they have a 70% chance of success at trial, they can’t both be right!! </li></ul></ul><ul><ul><li>consider the loss of management time if the case proceeds to a full trial </li></ul></ul><ul><ul><li>consider the advantage of achieving certainty of outcome on the day of the mediation </li></ul></ul><ul><ul><li>calculate the cost if it all goes wrong at trial </li></ul></ul><ul><ul><li>consider if they wish to achieve privacy, maintained reputation, restoring of relationship, etc </li></ul></ul><ul><ul><li>Consider whether you wish to send a confidential letter to the mediator </li></ul></ul>
  25. 25. On the day <ul><li>Introductions </li></ul><ul><li>Opening statements </li></ul><ul><li>Private meetings – be fully frank with the mediator </li></ul><ul><li>Let him help you find the “gold dust” </li></ul><ul><li>You will spend a long time waiting </li></ul><ul><li>Don’t have any evening commitments </li></ul><ul><li>Keep faith in the mediator and the process, even when you feel you are getting nowhere; there is always a low point, usually leading to sunny uplands </li></ul><ul><li>Remember that 65-85% of mediations settle </li></ul><ul><li>And even if yours doesn’t, and even though everything is without prejudice, you will have learned an awful lot about your opponent! </li></ul>
  26. 26. <ul><li>Now it’s your turn to work! </li></ul><ul><li>Chris Makin FCA FCMI FAE QDR MCIArb </li></ul>

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