There's no arguing

Senior lawyers of today will no doubt recall a time when commercial mediation got little serious mention by their colleagues and adversaries. And when the whiff of it came from across the Atlantic, it was often dismissed as a creature of the Americans which was not to be taken seriously. That was not the way we did things over here.

Anyone who was at law school before the 1990s is unlikely to be able to identify much in the way of education on what mediation was and how '“ as a legal representative of a disputant '“ one was to handle it.

Today is a different story. That there has been a revolution would be a very ambitious claim. A fairer judgment, perhaps, is that commercial mediation is slowly evolving and, while there remains a proportion of the profession conducting contentious business which does not appear to use mediation very much if at all, there is, at least, a growing understanding of its basic concept.

As for law school, the standards set down by the Solicitors' Regulation Authority now require students to be able to advise on the appropriate forum for the resolution of disputes; the advantages and disadvantages of resolving a dispute through negotiation, mediation and/or arbitration; and the procedures to encourage settlement.

Mediation is now officially recognised in the Civil Procedure Rules, and the courts are at times willing to make costs orders which penalise litigants who unreasonably fail to mediate.

There has been recent extra-judicial support and encouragement of mediation. In a speech in India last year, Lord Phillips described as 'madness' the incurrence of legal costs by parties without attempting settlement; and of the need for the courts '“ as part of their case management role '“ to take a firm position on the parties mediating. In a speech at the Civil Mediation Council Conference last year, Sir Anthony Clarke contended for more education of lawyers and judges so that mediation can become part of our culture and for the courts to direct parties to take part in mediation in appropriate cases.

Understanding mediation

While there has been a growing understanding of mediation over the last 20 years, there remain misconceptions. On occasions, one can still come across members of the profession who expect the mediator to agree and confirm to the other side that their case stands no chance of succeeding, or to make findings of fact or to provide a binding decision. None of this has any place in pure

mediation, so it is as well to restate what mediation is and what it is not. Mediation is a confidential dispute resolution process which is enabled and managed by a neutral person (a mediator) who helps the parties to find a negotiated and enforceable agreement. Mediation is neither litigation nor arbitration. No resolution can be imposed on the parties. The mediator is not there to make a judgment on the merits of the arguments nor to make findings of fact or law.

For those yet to take a case to mediation there can be a mystery surrounding what happens in practice. But even for those experienced in mediation, it is not always clear how the dynamics contribute to the outcome and why some cases settle and why some do not. From the perspective of a mediator, one gets a unique (and very privileged) view of what goes on, and it is very different from the picture that the parties and their representatives see. That is unsurprising because the mediator will generally spend time with each party in separate confidential sessions, trying to tease out the key to unlock the dispute.

That is not to say that the mediator is all seeing. Far from it. He sees what '“ with probing and encouragement '“ the parties let him see. He takes account, also, of the non-verbal clues such as intonation and body language (including high emotion, even in commercial cases).

But what is it that the mediator has to see or find out when taking offers backwards and forwards between the parties? The answer requires refuting the premise in the question. Mediation is not just a negotiation. It is, of course, an essential part of the process but the tiniest minority of mediations is solely concerned with the amount of compensation to be paid. Most mediations would fail to reach settlement if the only subject for discussion allowed by the mediator was the sum to be paid and accepted.

Practical experience as a mediator teaches you very early on that the drivers of a dispute will be as varied as the people involved and that using the mediation solely to debate the legal merits and quantum of a dispute won't get anyone very far if what drives the parties lies elsewhere (as it almost always does). What drives the dispute is therefore the element which the mediator must track down and in which the mediator must, therefore, have a very keen interest. Finding out what it is presents a challenge for it is something which is hardly ever pleaded and, while mediation position statements occasionally hint at the parties' feelings, they generally concentrate on the merits of the case. The parties themselves do not always find it easy to articulate what motivates them, and sometimes they do not realise what it is. They often have to take time with the mediator to reflect on what, in their mind, has caused and perpetuated the dispute.

None of this is surprising. Lawyers are paid to conduct a forensic analysis, advise on the law and present a case; and very skilled they are at it too. Commercial lawyers are not trained to discern their clients' feelings and motives. Once a claim gets under way, these tend to become hidden. This is compounded by our adversarial system and the legal machinery of a claim, which have a habit of taking over. The legal analysis imbues the dispute, and the client's commercial drivers and other motivating factors can become subsumed.

Take, for instance, the case of a holiday home which was burned to the ground having been bought by the owner for his wife and children. The insurers claimed that there were breaches of warranty, and declined to meet the loss. There were legal arguments about whether the warranty had truly been breached. This was canvassed during the mediation but what really drove the dispute was a long history of perceived ill-treatment of the insured by insurers, the profoundly unpleasant circumstances in which the insured had suffered the loss, and a desire by the insured not to feel in any way responsible for the fire. He perceived a full settlement of the claim as absolving him of '“ as he saw it '“ a failure to provide for his wife and children. These factors were largely irrelevant to the pleaded issues and would not have played a real part in determining the issues at any trial. Nevertheless, they played a central role in the mediation because little or no progress could be made towards a compromise at the mediation until these issues had been worked through in private with the insured.

Practicalities and legal arguments

These profoundly human factors regularly come into play during mediations, and good mediators expect to come across them anywhere '“ including corporate entities which might otherwise be thought of as cool-headed and detached. Take, for example, a former longstanding senior employee of a multinational construction company who claimed a substantial bonus payment under his employment contract. The legal issue turned on whether the bonus payment was triggered by the achievements of the employee before his contract came to an end. It became apparent during the mediation that the directors of the company were furious about the employee's refusal to negotiate with them over a potential second employment contract on the termination of the first. Their view (initially) was that the employee was responsible for the breakdown of the relationship, and they were not prepared to make anything more than a nominal cash offer in settlement of the claim. The case demanded that the parties reinstate their dialogue, express previous disappointments (without getting stuck in the past) and work out a solution, and this is what the mediation offered them.

Commercial motives, of course, hold significant sway. It is very common in mediations for the lawyers to want '“ for understandable reasons '“ to air the legal arguments, leaving the clients to identify all the commercial reasons for reaching a deal and moving on. I have seen this repeatedly in landlord and tenant cases. For example, lawyers for a tenant (leisure club) and its landlord had been arguing for months over the validity of the landlord's attempt at obtaining possession for breach of covenant. At no point before the mediation had the parties discussed the commercial possibilities, but at the mediation they discovered that they had common ground and that a deal could be struck which gave neither an outright 'win' but represented an immediate compromise; satisfying the commercial motives on both sides.

When the lay clients give voice to the commercial drivers, settlements very often follow. The parties often find a mixture of solutions which might comprise the ending of the commercial relationship but a sharing of the benefits and burdens of the residue of their venture, or they might re-negotiate their ongoing commercial arrangements with the eye to mutual economic gain in the future. Very often the settlement represents a way forward which a judge would have no power to order. This is because a judge is confined to deciding who's right and who's wrong within the strict ambit of the pleaded issues. The parties themselves are not so limited.

None of this is to say that the legal arguments are irrelevant. The legal arguments inform each party's position on how far they are prepared to go in order to reach a settlement. Mediators should be prepared to explore these arguments with the parties and, if necessary, to test the assertions on which a case is founded. However, it is not mediation's role to provide 'the' answer to a legal conundrum. One of the early lessons a mediator learns is that parties need to be disabused of the belief that mediation is a venue for convincing one's opponent that they are wrong. That is almost never achieved, and the best one can hope for with the help of the mediator is that each party fully understands what their opponent is saying and why. Even with fully pleaded cases, it can take some time to get to this position.

So, what is the lesson for lawyers representing clients at mediation? Do not automatically see the dispute as one exclusively about the merits of the case. In advance of the mediation, when taking instructions from the client, encourage them to give voice to how they feel about the case and their opponent, whether there are commercial '“ or other '“ drivers. Can the client shed light on the likely motivations of the opponent? What is likely to produce the most favourable response from the opponent? What has prevented settlement to date? Is it only a difference of views on the legal merits or is it some other factor?

When approaching mediation in this way, the parties have a real chance of getting to what has caused or perpetuated the dispute and of finding the key to unlocking it.