Why mediate?

Mar 12, 2014
Despite all that can be done to prevent them, disputes happen. A high price can be paid as a consequence. From neighbours in boundary disputes to multi-million pound patent litigation, parties risk ‘immeasurable human misery’1 and record legal bills. 

‘The Times’ recently reported that Apple had paid its US lawyers, Morrison & Foerster, some $60 million (£36.5million) for its litigation against Samsung, although the total global bill could be much higher. Other statistics include the $24.3 billion (£14.8 billion) that the world’s top legal practices earned in the past year.

‘The legal framework is supposed to make our economy more efficient by providing incentives for individuals and firms not to behave badly. But we have designed a legal system that is an arms race: the two protagonists work hard to out lawyer each other, which is to say outspend each other, since good and clever lawyers are expensive.

The outcome is often less determined by the merits or issue than the depth of the pockets. In the process, there is massive distortion of resources, not just in litigation but in the action taken to affect the outcome of litigation and to prevent the litigation in the first place’2

Litigation typically commences with a client paying a visit to a solicitor seeking redress for some past event; a business relationship gone sour or perceived/real infringement of rights and entitlements. Advice is given and generally, where there is a belief that there is ‘a case’, typically a letter before action is sent. ‘Pay up, or we will sue….’ is the general drift. How does the other party respond? Presented with the unpalatable choice of give in or fight, often a letter in response is the result.

The litigation journey is underway, like it or not. Commonly, many cases are settled on the court steps. The costs to that point, however, are often already beyond clients’ means. Mediation has always given those with personal and professional conflicts the opportunity to resolve matters cost effectively and to find a more flexible solution to their disputes outside of court. It can be the most efficient way out of deadlock. 

Increasingly, courts are taking a firmer view of cases where parties have not attempted mediation, and recent case law has warned of the real risks of failing to consider mediation seriously. ‘……this case sends out an important message to civil litigants, requiring them to engage with a serious invitation to participate in Alternative Dispute Resolution (ADR), even if they have reasons which might justify a refusal…….’3

So essentially, when offered the chance of mediation, it should not be rejected and practically speaking, could well provide a golden opportunity for the best business outcome. Establishing a means to resolve the dispute, achieving parity and equality in bargaining power, protecting business interests, future relationships and saving face are absolutely possible through a mediated outcome.

These days, it is not a question of why mediate? But why not?

1 LJ Mummery; Cameron v Boggiano and Robertson
[2012] EWCA Civ 157
2 Joseph E Stiglitz ‘The Price of Inequality’ 2012
3 LJ Briggs (PGF II S.A. v. OMFS Company 1 Limited)

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