Mediation: paying lip service?

25 Jun 2014

Before 1999 court procedure was laborious, time-consuming and costly, and there was no real emphasis on trying to settle matters and keeping costs down. That all changed in 1999 with the introduction of the Civil Procedure Rules. These were supposed to be a more rational set of rules. There was particular emphasis on the work to be undertaken before the claim ever reached court. Pre-action protocols were introduced. Parties were encouraged to exchange information and settle before incurring the costs of the court process.

This led to a focus on mediation, with more mediation bodies emerging and more professionals qualifying as accredited mediators. The courts heaped on costs pressures: if a party unreasonably refused mediation a court could take this into account in deciding which party paid the other’s costs at the end of the action. It led to a situation where parties often felt obliged to mediate. Were they always serious in attempts to mediate or just paying lip service to avoid possible costs sanctions? The intention was always that it would be a genuine attempt to find common ground.

Two recent developments are bound to have an impact on mediation.

In family proceedings, it is now compulsory to consult a mediator before a party can apply to court for financial relief. The mediator can confirm that the party is in fact unwilling to mediate, but he at least has to be consulted and the court has to be informed.

In civil proceedings parties now have to prepare budgets for the cost of the future conduct of the case shortly after court proceedings are issued. This exercise can be very time-consuming and costly in itself at a time when traditionally the parties are supposed to be taking stock and deciding whether or not mediation would be worthwhile.  Parties can now find they have to go through this costs budgeting process, at significant expense, before being able to ask the court to put the proceedings on hold to allow mediation to be explored.

So there are mixed messages coming from the courts. On the one hand in some areas the pressure to mediate is greater. On the other hand there are practical costs pressures which make mediation less likely once proceedings are issued. It is an inevitable consequence of spending more money on the court procedure that both parties’ settlement parameters will be put out, because they will want to see if they can cover those costs in any settlement.

Going forward it is best to decide on mediation as early as you can, before the issue of court proceedings if possible. The normal rule that both parties have to be prepared to compromise to make mediation work is the same, but the pressure to mediate early to avoid the increased costs of the court process is greater than ever.