There is not currently an automatic requirement for any party to a dispute, or a potential dispute, to attend mediation.
However, the courts certainly favour parties attending mediation rather than asking for the court to intervene.
It is wise to give a proposal to attend mediation by one party, or whether you wish to propose mediation yourself, serious consideration.
Mediation is one form of what the court refers to as Alternative Dispute Resolution (ADR). ADR is effectively any form of attempting to settle a dispute without asking the court to intervene.
What is mediation?
Mediation is a flexible, voluntary and confidential form of alternative dispute resolution (ADR), in which a neutral third party assists parties to work towards a negotiated settlement of their dispute, with the parties retaining control of the decision on whether or not to settle and on what terms.
The mediation agreement will usually require the parties to treat all discussions and documents as confidential and without prejudice. Usually, what is said or written cannot be used in later proceedings if the mediation does not settle.
The confidentiality of the process can avoid issues being made public that the parties want to keep private, as might happen in court proceedings.
The without prejudice rule will generally prevent statements made in a genuine attempt to settle an existing dispute, whether made in writing or orally, from being put before the court as evidence of admissions against the interests of the party which made them. One reason for having the WP rule is the public policy of encouraging parties (or potential parties) to litigation to settle their disputes out of court. The rationale is that settlement discussions (and, it is hoped, settlement itself) will be facilitated if parties are able to speak freely, secure in the knowledge that what they have said and, in particular, any admissions which they might have made to try to settle the matter, may not be used against them should the settlement discussions fail.
What are the benefits of mediation?
There are numerous benefits of mediation:
(i) It takes much less time to arrange and attend a mediation than going to court
(ii) It costs much less to arrange and attend a mediation than going to court
(iii) There is much more flexibility with mediation than going to court. For example, the parties can agree to almost anything at mediation, whereas this flexibility is taken out of your control if the court becomes involved.
(iv) Mediation is confidential. If the court is involved, these are often at public trials where, for example, the press may be in attendance.
(v) Settlement between parties is much more likely to maintain, or cause less damage, to personal or business relationships compared to if the court forces an outcome on both parties.
(vi) Even is settlement is not reached, the issues or barriers between the parties can be narrowed, which will save time and costs further down the line.
Are there any downsides to mediation?
Of course, for a balanced view, mediation may not be suitable for
(i) Mediation often requires a commitment of costs up front, which some parties are not in a position to fund.
(ii) There is a fear that a party may ‘show their hand’ by attending mediation. However, everything that is said or done in mediation is
(iii) Anything proposed or agreed in mediation is not binding unless it is recorded in an enforceable agreement, such as a settlement agreement. It is important that if any terms are agreed at mediation, that they are recorded and entered into at the time.
(iv) Some disputes, by their nature, are unsuitable for mediation. For example, if the dispute is for a very limited sum of money, the cost of mediation will not be proportionate the value of the dispute.
(v) Some fear agreeing to attend or proposing attending mediation is a sign of weakness. In reality, the court heavily encourages parties to attempt to settle disputes and, therefore, a proposal to mediate is not a sign of weakness, but showing an understanding of how the court wants parties to dela with any potential disputes.
What will happen if I refuse to mediate?
Whilst there is no obligation for a party to a dispute attend mediation, the Civil Procedure Rules are clear that parties should give very careful consideration to whether to attend mediation or not.
The Civil Procedure Rules are a set of rules and principles all parties to a dispute should follow. If they do not, they face sanctions, such as being ordered to pay some or all of another party’s costs.
For example, the Civil Procedure Rules states that litigation should be a last resort and that the parties should consider whether negotiation or some other form of ADR might enable them to settle their dispute without commencing proceedings.
If you are involved in a dispute in any way, or consider you may be involved in a dispute, and want to know more about your options both in relation to court and settlement options – please contact our dispute resolution department on 0208 049 5888 for a no obligation discussion about your options.
If you want to know more or want to speak to a member of our team, please get in touch below or call us on 01702 338338.
