Success in Mediation at any Cost

Speak to any bunch of Mediators at length and at some point the discussions will inevitably turn to a series of war stories of the successes and failures in past mediations.  Mediators’ raison d’être is to get disputes settled.  That’s why many of us got involved in mediation in the first place and why so many people train to become Mediators every year.

There is no feeling quite so bad as a failed mediation.  I am brave enough to admit that every year I will have one or two “train wrecks” and it is interesting how I can still remember all my failures in minute detail but can hardly remember anything about the scores of cases I have managed to mediate successfully over the years.

 

Human beings are not keen on failure.  Mediators are no different.  We don’t like to see cases break down and good Mediators go through a period of reflection following a failed mediation wondering what went wrong and how we might have done things differently, not only to torture ourselves but to learn from the experience so that we get it right next time!

 

So, with this background in mind, it is perhaps not surprising that there can be a temptation on a Mediator’s part to look for and drive through a settlement in a mediation that the parties may not actually want or, even more worryingly, might at some point in the future try to overturn.

 

Now you would be forgiven for thinking that a written settlement agreement is binding on the parties and there is nothing that a party who has signed up to a settlement agreement can do to get out of it.  But this is not actually correct.  There are limited circumstances that may lead a Court to set aside a mediated settlement agreement. Examples of such circumstances include the obvious cases of fraud and misrepresentation, but what about economic duress?

 

Now you might say what has economic duress to do with Mediators?  Why is it relevant?  The parties have signed a mediation agreement which makes clear that the entire process of mediation is privileged and confidential. High pressure negotiations are all part of the “cut and thrust” of mediation so how and why would a Court ever wish to intervene in a mediated settlement?

 

The case of Farm Assist Limited (in liquidation) -v- The Secretary of State for Environment, Food and Rural Affairs (No 2) 2009 EWHC 1102 (TCC) demonstrates how a Court may well be willing to ignore a confidentiality agreement in a mediation and/or settlement agreement, particularly if it is convinced that there is an arguable case of economic duress. 

 

In Farm Assist a very experienced Mediator found herself summoned to appear in Court to give evidence on the conduct of the mediation and the background to the negotiations in order to test the assertion made that Farm Assist had been subjected to economic duress in reaching settlement with The Secretary of State.   It is worth noting at the outset that both parties were represented in this mediation so you would be forgiven for wondering how a Mediator found herself in such a position, but the fact is that she did.

 

Not surprisingly, the Mediator argued to have the witness summons set aside on the basis that she had little or no memory of the mediation which had taken place some years previously, that her evidence would be of little assistance to the parties and the Court and that, in any event, she was entitled to rely on the confidentiality provision of the mediation agreement.

 

The Mediator’s application to set aside the witness summons was refused by the Court for five reasons that all Mediators ought to have regard for when conducting mediations.

 

"1. The allegations that the settlement agreement was entered into under economic duress concern what was said and done in the mediation and this necessarily involves evidence of what Farm Assist says was said and done by the Mediator.  This evidence forms a central part of FAL’s case and the Mediator’s evidence is necessary for the Court properly to determine what was said and done.

 

2. Although the Mediator has said clearly that she has no recollection of the mediation, this does not prevent her from giving evidence, frequently memories are jogged and recollections come to mind when documents are shown to witnesses and they are cross examined.  Further provided that the summons is issued bona fide to obtain such evidence, as a general rule, it will not be set aside because the witness say they cannot recall matters: See R v Baines [1909] 1 KB 258 at 262 per Walton J.

 

3. Calling the Mediator to give this evidence would not be contrary to the express terms of the mediation which limited her appearance to being a witness in proceedings concerning the underlying dispute, because the Court in the instant case was dealing with a different dispute.

 

4. The parties have waived any without prejudice privilege in the mediation which, being their privilege, they are entitled to do.

 

5 Finally, whilst the Mediator has a right to rely on the confidentiality provision in the Mediation Agreement, this is a case where, as an exception, the interests of justice lie strongly in favour of evidence being given of what was said and done.”

 

So what does all this mean for Mediators working in practice?

 

It would be very wrong to suggest that an agreement reached in a mediation is not binding.

 

There may, however, be limited and unusual circumstances where one party might be successful in seeking to overturn an agreement reached in a mediation that he, she or it entered into voluntarily.

 

Fortunately these incidents are rare but, if this was to happen, it is not open to a Mediator to refuse to give evidence on how the mediated settlement was achieved. If the Court insists that the Mediator is required to give evidence, the Mediator has no choice in the matter.

 

Now I am not saying that we all need to change our mediation style and practice but what I would suggest is that, in light of the Court’s findings in Farm Assist, Mediators might be wise to check with both parties that they are content to conclude the agreement on offer and are not being pressured into doing a deal that one of them does not want to do.

 

So if you hear words similar to “I am feeling pressure to do a deal that I don’t like”, encourage the party concerned to take a break from the negotiations and re-group. There is no need to rush. This is probably even more important when the parties are not legally represented.

 

I know that many Mediators return or destroy the client’s papers at the conclusion of the mediation as well as their own notes. I wonder if this is really such a good idea?
I confess to keeping the parties’ papers and my notes for 6 years and you can rest assured that I will be more diligent than ever in recording the various offers and counter offers in future mediations, as well as continually checking that the parties are negotiating in good faith and without pressure or duress.

 

Finally, whilst I know all good Mediators are keen to assist the parties in “getting to Yes”, getting a settlement at any cost may not be such a good idea and could lead to rather unpleasant consequences in the future should one of the parties decide to renege on the deal.

 

It is perhaps worth reminding yourself that it is the parties’ dispute, not yours.  Settlement at any cost is simply not a good idea.

 

Peter Vinden is a practising commercial, workplace and employment mediator.  He is Managing Director of Vinden and can be contacted by email at pvinden@vinden.co.uk

Peter Vinden

Peter is an experienced professional in the construction industry with particular expertise in quantity surveying and the commercial management of contracting organisations. 

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