In the past couple of decades, we have seen a rise in the number of mediated cases as an alternative to the traditional court led process.
Mediation is a form of ‘Alternative Dispute Resolution’ (ADR) whereby an independent third-party mediator is instructed to assist the disputing parties in reaching a mutually acceptable, negotiated settlement. The process is particularly popular due to both the practical and commercial advantages.
Cost and time efficiency
If mediation is entered into early or before proceedings have started, considerable cost savings can be achieved. The cost of private mediation can start at around £3000 plus VAT. This should be compared to the costs of litigation, which are rarely less than £100,000.
Litigation often spans across several months and years resulting in increased solicitors and court fees. A mediation can typically be concluded within a few hours or days.
It is also important to note that, legally, parties are under a strict duty to deal with cases justly and at proportionate costs, in line with the Civil Procedure Rules. Accordingly, courts are entitled to penalise parties who have not, at the very least, attempted to consider ADR. The court has the power to impose sanctions, interest and cost penalties, or even order a stay on proceedings, should a party unreasonably refuse to mediate.
Many parties, particularly businesses, are eager to conclude disputes as soon as possible to limit any reputational damage within the business itself, the industry and also the customers. Mediation aims to preserve the relationship between the parties by introducing a platform whereby parties are encouraged to negotiate an agreement outside the confines of court and legal procedures. Parties involved in mediation tend to have a more satisfactory outcome and may continue their relationship after the dispute has been resolved – particularly important for businesses who operate within niche or competitive markets.
A court led process means that parties are bound by court deadlines, complex legal principles and the decision is ultimately dependant on the judge or jury’s interpretation of the facts presented to them. Mediation therefore offers parties greater control over both the outcome and resolution process.
However, above all, mediation is a private and entirely confidential process, the information is by no means a matter of public record.
Aside from the positive judicial attitudes towards mediation, it is a highly efficient and effective alternative to traditional litigation and an avenue that all parties are encouraged to explore.
This is reinforced in the recent case of Richards & Anor v Speechly Bircham LLP & Anor (Consequential Matters)  EWHC 1512 where the court ruled that the Defendant’s refusal to mediate was unreasonable, and therefore imposed a more onerous costs order against the Defendant than usual. HHJ Russen QC asserted that ‘where neither side made a cost-effective Part 36 offer, the defendants’ unreasonable conduct in relation to mediation is in my judgement sufficiently marked by an order that they pay the claimants’ costs down to and including trial on the standard basis. That is an appropriate “sanction” for them not engaging in a process of ADR’.
Whilst the court emphasised that the failure to mediate was just one aspect of the conduct to be considered, it no doubt amounted to ‘unreasonable litigation behaviour’.
For further information on our mediation services, please contact Jovita Vassallo, Partner in our Litigation team.
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