Mediation - Everything in moderation

Mediating personal injury claims, both for lower and higher value cases, can achieve great success but only if both parties are committed to the process. Stephen Cantle and Tony Allen discuss why mediation only works on a 'without prejudice' level if the parties go into it with an open mind


Recently, I was involved in mediation where the only benefit was to increase the costs. During the course of a frustrating day, it became clear that our opponents would only settle at maximum value. Although this was not a novel experience, I started thinking about the usefulness of judicial warnings of the consequences of a refusal to mediate.

Why do people agree to mediate if they have no intention of reaching a compromise? The short answer is they know that a refusal to mediate may well result in their being penalised in costs, even if they are subsequently successful at trial.

There have been many instances where judges have emphasised this point. Perhaps the best-known example is the Court of Appeal decision in Dunnett v Railtrack 2002.

In this case, the court dismissed the claimant's appeal, which in the form it was argued, was bound to fail. However, the court refused to award the successful defendants their costs, even though the unsuccessful claimant had declined to accept a £2500 settlement offer from the defendants.

This was because Railtrack had weighed up the chances of resolving the case through mediation and then rejected the process on the grounds that it was unlikely to achieve anything other than extra expense. If Railtrack had simply attended mediation and made its £2500 offer - or indeed made no offer at all - it would have escaped criticism.

However, when you look at what cases such as Dunnett - and the later Court of Appeal decision in the Fatal Accidents Act case of Halsey v Milton Keynes NHS Trust 2004 - have actually achieved in practice, the answer is depressing. One may well encounter a readiness to mediate solely in order to avoid costs penalties, backed by a steely determination to abuse the process from the outset.

It has been suggested that one way out of this impasse is for the courts to have the power to look behind the mediation curtain and become involved, which might include a costs sanction, only if one of the parties is abusing the process. However, it is doubtful whether things would work much better if the parties felt that they might be reported to a managing judge if they rubbed the mediator up the wrong way.

Perhaps the better answer is to try and educate lawyers into seeing the full benefits of mediation, particularly early mediation. That way there is a greater chance that the parties will make a positive choice to go down the route of peaceful resolution - rather than open conflict.

- Stephen Cantle is a consultant at Kennedys


I recently mediated an employers' liability claim involving catastrophic injuries where, after five years of litigation failing to deliver what the parties wanted, a swift resolution was achieved enabling them to resume their employment relationship. At mediation, the claimant had a guaranteed 'day in court' to express his strong feelings, and his employer could respond directly, uninhibited by the litigation process. Each party expressed genuine satisfaction with the process, which ultimately produced resolution.

What lessons emerged? Firstly, earlier mediation can save major costs and significantly increase the chances of resolving a dispute successfully.

Secondly, mediators can help parties to close enormous 'on-the-record' gaps through separate private consultations. Without a neutral's intervention to focus thinking, cases can drift on expensively.

And, finally, mediation restores control to the parties, which they appreciate. The litigation is in their name, and involving them directly influences the outcome significantly to their mutual benefit. In my recent case, the claimant impressed the defence team as a witness. Yet he also listened to the defendants' arguments and moderated his risk assessment. A compromise was then possible. As a result, a badly disabled man can now return to work for the company that injured him.

Why has personal injury mediation grown so slowly in the UK? Well, it could be too early to mediate. A recent mediation pilot of pre-issue fast-track cases carried out by Allianz using the Centre for Effective Dispute Resolution mediators suggests early interventions will settle an appreciable number of cases, by discussing risk and cost and softening the win-lose mentality. Over half the cases settled.

Another reason is the belief mediation is not affordable. However, it is, as mediation does not require armies of lawyers. There are also now many affordable PI resolution schemes available from providers. In addition, parties can agree that mediation costs and fees follow the litigation event, rather than being shared.

Some parties also think courts cannot order them to mediate, so they refuse. However, the courts can - and do - make ADR orders. The Halsey v Milton Keynes NHS Trust case makes it clear that ignoring such a recommendation may incur costs penalties. And sanctions can also be imposed on successful parties that decline an opponent's offer.

Roundtable conferences and direct negotiations often work. But roundtables frequently take place very late in the life of a case, after substantial costs have been occurred. Lay parties rarely join the table to present their case or hear the opposition direct, whereas a mediator makes this possible. The occasion is usually firmly adversarial. Mediators often unlock apparent deadlock. Why not use the better process earlier, minimising wasted time, costs and stress?

- Tony Allen is a director of Centre for Effective Dispute Resolution.

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