Mediation – has it come of age?
Firstly, unlike formal legal proceedings, it is a quick and cost effective way to resolve disputes. Second, it has a high success rate and its use is increasingly encouraged by the Courts as the County Court system cannot cope with the current volume of civil cases. Finally, the entire process is private and confidential.
Statistics vary but range from 65% to 85% of mediations being concluded with an agreed outcome. Also, the Court may award costs against a party where it can be shown that it acted unreasonably in refusing to mediate.
Trained Mediators use various techniques to open or improve dialogue between parties with the aim of helping them to reach agreement. A Mediator will not take sides or give advice and he or she will try to focus the parties on the future and how they would like to see things change so that both parties can move on.
In short, the Mediator plays a number of different roles but all those roles are designed to help the parties to overcome deadlock and to find a way of working co-operatively towards a mutually acceptable settlement. Importantly, a Mediator will help the parties to take a realistic view of the dispute and to consider the risks in the light of the alternatives to not reaching settlement. The Mediator will then oversee the drafting of the settlement agreement, checking with parties that all issues are covered and that the settlement is workable.
The Mediator can work with the parties and their advisers to ensure they have done a full appraisal of the implications of time, cost, management input, publicity and all the other factors that will flow from continuing with the dispute. Moreover, the Mediator can help the parties in their analysis of the best and worst alternative to a negotiated settlement and the most likely alternative to a negotiated settlement. By examining each case against these tests, it is possible for the parties to be more realistic about the future course of any litigation.
Mediation can be applied across a whole variety of disputes including disputes arising in the field of ABL. Those disputes range from arguments arising between a factor and his client to disputes with debtors and guarantors. We believe that mediation has a real place in ABL and its benefits should be considered well before legal proceedings are issued. Factors and discounters should bear in mind that:
Many agreements now contain an alternative dispute resolution clause. Whilst not binding on the parties it may still help the parties to channel their disagreement away from more formal legal proceedings. An example of such a clause is as follows:
“If any dispute arises in connection with this agreement, the parties will attempt to settle it by mediation. Unless otherwise agreed between the parties, within 14 days of notice of the dispute, the Mediator will be nominated by [ABFA]. To initiate the mediation a party must give notice in writing (“ADR Notice”) to the other party(ies) to the dispute, requesting mediation. A copy of the request should be sent to [ABFA]. Unless otherwise agreed, the mediation will start not later than  days after the date of the ADR Notice.”
As the vast majority of cases are settled without court determination we expect to see a continued rise in the use of mediation as a method of ADR. If you would like more information on mediation or other methods of ADR then please contact Nigel Davidson who is a CEDR accredited Mediator, or Noel Ruddy.
The content of this webpage is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. PDT Solicitors LLP accepts no responsibility for the content of any third party website to which this webpage refers.