When should you mediate?

A day of mediation can be organised quickly at any point in a dispute. But how do you decide on the best time to negotiate?

Mediating early

‘A stitch in time saves nine,’ goes the saying. This expression offers a good rule of thumb for determining when to organise a mediation. The parties to a dispute should consider mediation as soon as they understand the issues. In straightforward disputes, the information contained in the initial exchange of documents (the letter of claim and the defendant’s reply, for example) might suffice. For more complex disputes, it might be possible to exchange position statements and supporting documents sufficient to allow mediation to take place.

Mediating early has the following benefits:

Saving time and costs

Legal costs increase in a nonlinear way. The early stages of a dispute are less expensive than the later stages where more work is required (the preparation of witness statements, disclosure and the court hearing, for example). As such, an early mediation offers the best opportunity to save time and costs.

Agreeing on the payment of legal costs can cause deadlock during a negotiation. This is particularly true where those costs are disproportionate to the claim. By mediating early, costs can be minimised.

Conflict + time = entrenchment

As a dispute grinds on, people become increasingly entrenched in their positions. An early mediation allows the parties to negotiate before their investment of time, money and emotion can act as a barrier to reaching an agreement.

Pre-action protocol obligations

In England and Wales, there are a number of pre-action protocols. These protocols detail the expectations in relation to the conduct of disputants before commencing proceedings at court. A common theme running through the protocols is that parties are encouraged to consider resolving disputes as an alternative to taking them to court. A failure to do so can result in costs penalties.

Clarifying the issues

Mediation has an excellent success rate: 86% of disputes that go to mediation settle. In the unlikely event that there is no agreement, mediation can help the parties to gain a better understanding of the issues or to narrow them.

Mediating once proceedings issued at court

There are some instances where an early mediation might not be appropriate:

• Where a dispute is unusually complex, and the issues are not capable of being clearly understood pre-action.
• Where one or more of the parties require some form of emergency measure that only the court can grant (such an interim injunction, for example).

Even where mediation is not possible before commencing proceedings at court, it important to regularly review the possibility of reaching a negotiated settlement. There are good reasons to do so:

• The earlier the parties mediate, the greater the saving in time and costs.
• In England and Wales, the courts actively manage cases and require the parties, at various stages, to consider alternative dispute resolution (ADR).
• If the court determines that a party has not taken steps to try and settle the matter using ADR, or refused an offer to do so, it can impose costs sanctions.

Settling a dispute at the door of the court is common, but this approach misses many of the benefits of settling the matter at an earlier stage. Developing and regularly reviewing an ADR strategy, in parallel to your litigation strategy, will ensure that you do not miss a good opportunity for a timely and advantageous agreement.

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