Mediation but not as we know it: Working through COVID-19

Like most mediators I’ve been deep-diving and upskilling – honing my videoconferencing skills. In the pre-pandemic age, I conducted quite a few mediations by telephone or Skype or a combination of the two, but only where sums were small and parties were willing to move straight to the money.

Now all my mediations are online, and I’ve had to master the main videoconferencing platforms. My recommended platform is Zoom. “Why Zoom?” I hear you ask. “Is it secure? I’ve read the horror stories of uninvited guests and pornographic virtual backgrounds. I’ve heard that the boast of end-to-end encryption isn’t true!” Yes, but…

Zoom is the only platform I have found that truly works for mediations. Zoom allows you to create private “break-out rooms”, which are essential to the mediation process. It is also easy to use, fast and stable. I am not a data security expert, but I am satisfied that the widespread popularity of Zoom in the commercial market has resulted in the latter holding it to account more so than any of its competitors, and considerable Zoom resources have been directed towards plugging any remaining security holes.  I can say that I, as host, have full control over who enters the mediation. I also routinely prevent participants from using the platform’s facility for recording meetings.

Remote mediations work remarkably well. I was fortunate to receive superb comprehensive training from my chambers and have so far conducted five Zoom mediations all with overwhelmingly positive feedback. It’s a little spooky how similar to F2F it actually is! One participant joined from Dubai – seamlessly.

But unsurprisingly there is a definite reluctance on the part of both disputants and lawyers to give it a go. My advice? Give it a go! Download the software (Zoom and others; see which you prefer). Play with it. Communicate with your clients and legal teams with it. Familiarise yourselves with it. Look upon it as an opportunity to learn something new and take advantage of the new resources we have available to work more efficiently and conveniently.

Because the fact is that right now there is no alternative to remote mediations. Just like remote Court hearings. You may say that it’s better to postpone. Until when? Disputants need their disputes resolved swiftly, for a multitude of reasons. Litigation lawyers need to earn a living. So do mediators! I have no doubt that pretty soon someone will devise a platform tailored specifically to the needs of mediation. But right now, there are workable solutions and we should all be embracing them.

Here is some feedback from a recent Zoom mediation:

“The virtual mediation worked brilliantly.  I would definitely propose it again and, in the future, would advocate mediation via video to avoid people having to travel from across the world to attend face-to-face.

Alistair is a very effective communicator.  I particularly liked the way that he starts the mediation – it is very useful to know what to expect from him, in terms of his approach and how he might challenge the parties.  It then doesn’t come as a surprise.  Alistair is not afraid to get tough with the parties and sometimes that is just what a dispute needs.” Law Firm Partner – Mediation with Alistair Pye – April 2020.

If you are in any doubt about whether or not to postpone or mediate now, I’d be delighted to speak with you (either the lawyers or the disputants themselves) to share my experiences. Just pick up the phone and call me on 01225 891395 or 0776 66607 7779. After all, I’ve got plenty of time on my hands!

Are you serious about settlement?

If you are, then it’s important to demonstrate it in your mediation team’s conduct both before and during the mediation.

Actions speak louder than words, especially in the intense arena of mediation. Think carefully about how your team’s behaviour might be interpreted by others. Imagine yourself in your opponent’s shoes and how you might respond to the kind of signals you are sending. Here are a few suggestions to help build a positive, collaborative environment:

  • Don’t be unnecessarily difficult in agreeing a mediator or venue. Don’t reject the other side’s suggested mediator just because they suggested it (“biased mediator” is an oxymoron – by definition they don’t exist). Be accommodating if good reasons are given for wishing to hold the mediation in a particular location.
  • Use neutral, moderate language in your position statement. Avoid emotive words like dishonest, theft, fraudulent, incompetent, hopeless, useless, bully, disreputable, disingenuous, etc. If these are aimed at individuals attending the mediation then you have significantly decreased the probability of settlement before the day starts.
  • If you are hosting the mediation, don’t put the visitors in a windowless, cramped room. Give them the best room available. And be hospitable with hot drinks and lunch.
  • Watch your body language in plenary session. No raised eyebrows, tuts, groans, sighs, feigned disinterest, phone fiddling or head shaking. Give the speaker the respect of your full attention with good eye contact, even if you profoundly disagree. You will have your chance to respond.
  • And finally, please make sure that the people that the other side would reasonably expect to be present are present. This often means both the decision maker (with proper authority) and the main protagonist. Consider this: an architect’s negligence claim brought by a householder following months of disruption resulting from a failed extension project allegedly due to defective design. Neither the architect nor his professional indemnity insurer are present at mediation; the only attendee is the lawyer appointed by the insurer. This happens all too often and seems to be a growing trend. The insurer’s absence may be due to time pressures. The architect’s absence may be the result of a (mistaken) belief that they have no role because their financial stake is limited. Or the absence of both may be a deliberate strategy. Whatever the reasons, it sends the worst possible message to the claimant: the architect doesn’t care and the insurer has more important things to do.

Needless to say, the above suggestions apply equally to disputants and lawyers alike.

Feel free to leave a comment!

Alistair Pye

Litigation, Mediation, Wisdom and Skill

I’ve been mediating for 10 years (4 of those full-time) and it’s been my privilege to have mediated well over 400 civil disputes of all shapes and sizes. I love the job; it’s a far cry from sitting at my desk or appearing in court fighting my clients’ corner – something I’ve done for over 25 years. Or indeed attending mediations with my clients. That said, you will never hear me decry the litigation process or the people who operate within it. I have the greatest of respect for the legions of really excellent lawyers who are dedicated to their work and their clients, often for far less remuneration than is popularly imagined. What does bother is the constant assault on access to justice pursued by successive governments: the slashing of legal aid, the crazy hike in court fees, the imposition of employment tribunal fees (now abolished following a Supreme Court ruling last year). Unfettered access to justice for all – regardless of means – should be an essential element of civilised society.

But I digress from my subject. Mediating is an exhausting job requiring energy, tenacity, positivity and guile. There is no down time. I leave the building drained. This is exactly as it should be, because we are all there together trying to condense into (usually) a single day a process that the disputants may have lived with for years, and may have to live with for years more if they don’t settle. The day is a journey.

For those participants and their representatives who come with an open mind and a collaborative spirit, it’s a journey which often ends at a place they were not expecting. That can initially be seen as a negative: “I’ve compromised more than I should have”. Indeed, I often hear lawyers say that if both sides are less than ecstatic about the deal then the mediation has been a success. I get that, but in my experience most disputants will come to feel great relief that a burden has been removed – either from their lives or their desks, or both. That burden usually takes three forms: money, time and emotional harm.

Litigation is almost always about the past – something happened which shouldn’t have, or something didn’t happen which should have. It’s human nature to want to put “right” a “wrong” and to defend yourself if you didn’t do anything “wrong”. But it’s also human nature to become so fixated on that past “right” or “wrong” that we lose sight of a simple fact: we live our lives in the present. We have each day ahead of us: families and friends to support, businesses to run, new projects to pursue, income to earn, debts to pay, vicissitudes of all shapes and sizes to face.

Litigation is an essential piece in the jigsaw of democracy – private citizens need it to enforce the law and achieve justice. Few disputants will be incentivised to mediate unless litigation has been initiated or is threatened. But litigation is a complex tool. It needs wise and skilful handling. Without wisdom and skill, litigation can damage or destroy lives, livelihoods and relationships. It can steal wealth, time and future opportunity. We can lose a lot by taking our eye off the present and focussing on the past.

There have been and are many causes that are worth risking everything for – that’s how we built our society. But let’s face it, the overwhelming majority of disputes that find their way into the civil justice system are not of that order. As a mediator I try to encourage the disputants to reframe the dispute in the context of everything else that is important to them. I try to do this by exploring their real interests (as distinct from their legal positions) and what they are putting at risk by continuing down the litigation path. I try to encourage them to tune into their own wisdom and skill so that they can make good decisions. What is the opportunity cost of pursing this dispute beyond today?

I have no problem whatsoever if those good decisions do not lead to settlement – I am not attached to any outcome (other than perhaps my wish that the disputants should leave the mediation having gained something of value). But it can be difficult to even start those conversations unless the disputants’ legal advisors have already imparted their own wisdom and skills in laying the foundations for a successful mediation day.

In my next post I will be looking at some techniques lawyers can use to prepare their clients to make the most of the opportunity that a mediation presents.

Alistair Pye

 

Framing Costs-Inclusive Offers – Are you up to date?

For years it has been accepted wisdom for litigation lawyers to advise their clients that they will not recover all their costs if they win at trial. Clients are told that the irrecoverable costs – those that are disallowed by the costs judge upon detailed assessment – are typically pitched in a range between 25% to 33% of the actual costs paid by the client. To put it the other way round, the maximum costs that the losing party will be ordered to pay to the winning party will be somewhere between three quarters and two thirds of the winning party’s actual costs.

This unwritten rule is frequently deployed in mediations: paying parties routinely apply such discounts to receiving parties’ costs when formulating costs-inclusive offers. Equally, mediators may deploy it in an attempt to demonstrate that the additional financial benefit in proceeding to trial and winning, as opposed to settling at less than 100%, will be wiped out by the irrecoverable element.

In an era of costs budgeting and costs management orders (CMOs), is this still sound advice? The answer is no.

In June of this year the Court of Appeal gave guidance on the relationship between approved budgets and standard basis detailed assessment in Harrison v University Hospitals Coventry & Warwickshire Hospital NHS Trust [2017] EWCA Civ 792, which can be summarised as follows:

  • A distinction is to be drawn in an approved budget between future costs and incurred costs.
  • The future costs of the receiving party (that is to say, the estimated costs yet to be incurred at the date of the CMO approving the parties’ budgets) will not be departed from on detailed assessment – upwards or downwards – unless there is “good reason to do so” (CPR 3.18(b) clarified).
  • The existence of “good reason” is a matter for the individual appraisal and evaluation of costs judges by reference to the circumstances of each individual case. But they should not adopt a lax or over-indulgent approach to the need to find “good reason” because to do so would tend to subvert one of the principal purposes of costs budgeting and thence the overriding objective.
  • The incurred costs of the receiving party (that is to say, the costs already spent at the time the CMO was made) are to be the subject of detailed assessment in the traditional way, without any added requirement of “good reason” for departure from the approved budget. Incurred costs do not fall within the ambit of CPR 3.18(b).

In mediation it is almost always sensible for the paying party to provide a reasoned build-up of an offer, at least in the initial stages of the negotiation. If the offer is to include a contribution to the receiving party’s costs then it will no longer do to simply apply the traditional discount. Reference should be made to the receiving party’s approved budget (these should always be included in the mediation bundle), and a more sophisticated calculation of the offer for costs should be made. For the costs incurred up to the time the budget was approved it makes sense to apply the traditional discounting. But for budgeted future costs (which in practice means the budgeted future costs from the date of the CMO to the date of the mediation) it will be difficult to justify any discount for an irrecoverable element.

Of course, that does not preclude the application of discount for other reasons, such as litigation risk.

If the paying party is serious about settlement then the objective should be to frame a credible offer. Reliance on obsolete rules of thumb undermines that objective.

Anyone for Plenary?

In my pre-mediation discussions with the parties’ lawyers I often hear the opinion that the plenary session is a waste of time. Each party knows its case, there is no point in verbally repeating the position statements and “warm words” are unnecessary. In other words, it’s private rooms and shuttle diplomacy – “let’s get on with the negotiation”. Really?

One of my key jobs as a mediator is to try to prevent anything happening that makes matters worse. Bringing together people who have been in bitter opposition for months, sometimes years, is a risky business and it could all go horribly wrong: personal abuse, raised voices, tears, walking out. Lawyers can contribute to a downward spiral by treating the session as though they are in court.

On the other hand, another of my key jobs is to break the status quo and shift the dynamic. To do that, it is sometimes necessary to take (calculated) risks. Some mediators start every mediation with a plenary session. That is an approach I simply do not understand. Why take the risk? I always see each side in private session first, and I use those sessions to sound out the parties on their attitude to a plenary session, and then to form my own view. Is there a real risk – given the personalities involved (including the lawyers) – that the plenary session could degenerate into a slanging match? If there is that risk, is it – in the particular circumstances – necessarily a bad thing?

I am a strong advocate of plenary sessions. I start from two basic propositions. Firstly, the “warm words” of good faith and intention to engage are important: the parties have taken the trouble to come together under one roof to try to settle their differences, and it is only right and proper – as part of a principled negotiation – that they should acknowledge each other’s presence. Secondly, communication is the essence of dispute resolution. Non-communication leads to depersonalisation: the opponent becomes “the enemy” – a caricature. It’s not easy to see someone as anything less than human when you are speaking with them around a table. It’s good to talk.

There are other very good reasons for having a plenary session, many of which I explore with the parties in private session:

1. If your client is also the main witness and their account is credible and sincere, why not let them tell their story, in their own words? Lawyers are naturally cautious about exposing their clients to the other side’s legal team, but you would be well advised to look at each situation on its merits. A powerful, measured and sincere performance from your witness will be noted by the opposition as an indication of how they will perform in the witness box.

2. As a general rule, the longer everyone spends in mediation discussing the issues in dispute, the less chance there is of reaching a settlement. Most parties and lawyers expect there to be at least some engagement on the issues. My approach is to encourage everyone to try to restrict these discussions to the initial plenary session, and then to move back to private rooms and start negotiations. If experts are present (and whether or not they should be is a separate debate!) then why not have them discuss the issues (with suitable prompting) for everyone to listen?

3. Very often the main protagonists were friends or colleagues who had a good relationship for years but who have fallen out over some commercial matter. Putting them together, and encouraging them to speak to one another, might just remind them of what they stand to lose in the dispute other than money. It might also clear up the misunderstandings and false assumptions that arise when people stop speaking to each other. I always encourage the parties to speak where possible, as well as the lawyers..

4. One should not underestimate the power of venting and “having your day in court”. The most challenging and risky plenary sessions tend to occur in highly personal disputes, often between family members or neighbours. But these can also lead to the most transformative outcomes. Sometimes it is appropriate to allow the parties to shout at each other, because that is what they need to do before they can move forward. There is a limit to how long people can hurl abuse, before they calm down and find a better way to communicate.

A lot of the above may seem entirely irrelevant to the insurer or the commercial director seeking to resolve a financial claim. But even in these cases, personalities do get in the way of progress (a common example is where the relationship between the lawyers is difficult). Ask yourself this: if the plenary is unlikely to damage the process, why not give it a go?

Draft First, Mediate Later!

Drafting a complex settlement agreement or consent order at the end of a long mediation day is a pain in the neck! I know; I’ve been there after midnight scribbling away. Now, as a full-time mediator, I’m delighted to leave the tricky stuff to the parties’ lawyers. But, boy, is it frustrating for everyone to be waiting one, two, three (my record is six) hours for the lawyers to agree a draft and then take their clients through it line by line. One can easily lose the will to live. Not to mention the obvious: that complex drafting after an exhausting day is not a great idea. Mistakes creep in.

In my pre-mediation communications I always encourage the lawyers, as part of their preparation, to think about how a settlement might be framed in a written agreement, and to bring to the mediation an advanced draft which addresses matters they consider to be important. This has all sorts of benefits:

Firstly, it helps to flick your psychological switch from “adversarial” to “collaborative” mode. Focusing on settlement, rather than on how best to beat up the opposition, is enormously beneficial to the process. After all, that’s why we’re all there!

Secondly, it encourages you to look closely (often for the first time) at complex issues that might impact both negotiation and drafting. Are there any tax consequences? Tax issues are common, and you may benefit from a chat with your tax team or the client’s accountant. Will the settlement include the transfer of real property and the release of an existing charge? Will the lender agree? Will the settlement include a new charge to secure a debt? Is the first mortgagee’s consent needed? What form will the charge take? It’s no good simply stating that X agrees to give Y a charge in a form to be agreed: that’s an unenforceable agreement to agree. What is the extent of what is being settled? What about confidentiality? All potentially tricky stuff – especially with a blank computer screen after 6.00 pm.

Thirdly, having just spent ten hours of hard negotiation to reach a deal, the last thing you need is for it to evaporate overnight because the lawyers were too exhausted to tackle the drafting (other than non-binding heads) and somebody has had a change of heart. It is always best – if possible and prudent – to get a binding agreement on the day. By drafting first and mediating later you can make that happen.

So, when verbal agreement is reached, be the hero who plucks out a draft settlement agreement from your briefcase! Everybody (me included) will love you. Just don’t forget the laptop and printing facilities (believe me it happens)!

Alistair Pye

Legal Directories 2015

I’d like to thank all those who gave feedback on my Mediation practice to the Legal 500 and Chambers UK researchers. I’m really pleased with my write ups in the latest editions:

Legal 500: Alistair Pye at In Place of Strife uses his ‘calm and balanced approach to inspire confidence from the outset’. Clients praise his ‘professionalism and commitment to finding solutions’, ‘meticulous preparation’, ‘objectivity’ and ‘ability to see the big picture’.

Chambers UK: Alistair Pye attracts praise from market sources for being “extremely thorough in preparation, coming to mediations knowing the issues and understanding them.” Sources also appreciate his flexible approach to mediation, noting that he is “pretty tough and resilient when needed, but also friendly, which clients appreciate.” He undertakes a range of mediation work, ably handling commercial, employment and property disputes.

And thank you so much to all who have agreed to provide feedback to the researchers for this year – it never ends!

Alistair Pye

‘Adjudication or Mediation?’

On Tuesday 20 October at UWE, I collaborated with Trevor Drury, an accredited mediator,
lawyer, chartered surveyor, chartered construction manager, project manager and expert witness specialising in construction and energy sector disputes.

The presentation was given to 20 professionals in the construction industry hosted by the Brunel Centre of the Chartered Institute of Building.

The lively presentation explained the features, merits, problems, and when to use both forms of alternative dispute resolution from a practitioners perspective, with an update on recent developments.