Many a mediation does not lead to settlement. But was the mediation a failure and if so, why; and did the mediator do a good job?
Settlement rates from mediation show that most disputes settle at or soon after the mediation, over 70%. What of those that do not settle?
The mediator, the parties or their advisers might be at fault. The mediator may have performed badly, a key person left too early, the real decision-makers were not at the mediation, something unnecessary was said to derail the process, or an unduly rosy assessment of the case was given by a lawyer. A party may have been unable to shake off the antagonism in the dispute, etc., etc.
In other cases, one side may not have had the necessary information to settle. The mediation was too early. In others, the mediation may have been too late, when the burden of legal costs prevented settlement.
Of course, no-one is necessarily at fault if the mediation does not bring about a deal. And it is generally wrong to say that a deal would have been done if these problems had not existed. You can only say that a deal would have been more likely.
In many other cases where a deal is not done, the mediation process is likely to have generated the best available settlement terms through a competent mediator with parties who have engaged constructively with the process, competently advised.
And yet, the parties decide to go to court. Settlement on the best available terms may not always make commercial sense.
The best available terms are the terms offered by each party to the other after all the available options have been explored and a full risk assessment has been done by each, appropriately facilitated by the mediator.
Where the mediation has produced those terms but not resulted in settlement, this does not necessarily make the mediation a failure. Far from it. Apart from ‘ticking the mediation box’ to head off an adverse costs order for not attempting ADR, the parties often come away with real benefits, including –
- assessing the credibility of a party as a witness;
- obtaining the confidential reaction (not advice) of an independent neutral, i.e. the mediator, as to how a judge might react to their case;
- getting a better understanding of the legal merits of the case and a more rounded commercial risk assessment;
- being able to make a robust Part 36 Offer (a form of insurance policy under the civil procedure rules) as a result of the above;
- useful groundwork laid for another attempt at settlement later on;
- vindication of the decision to pursue the case.
In view of all these considerations, did the mediator do a good job?
It is not the mediator’s role to ‘get’ a settlement. In general terms, it is to facilitate and promote settlement, using appropriate techniques. But above all, the core qualities of an effective mediator include, –
- to work with the parties to generate the best available settlement terms;
- having assisted each party appropriately (in private session) to carry out the fullest possible risk assessment by a critical examination of each party’s self-interest;
- to facilitate dialogue with a view to enabling each party to make the best commercial decision whether or not to accept those terms.
© Stephen Bate, Mediator