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Is mediation a good thing?

While evidence abounds about the enviable success rate enjoyed by mediation, it tends to be anecdotal, writes Kim Franklin.

Mediation falls within the category of Alternative Dispute Resolution (ADR) and as an alternative to full-blown litigation it may seem an attractive option. But it is nonetheless a formal procedure, with some essential prerequisites for success:

desperation. All of the parties to the dispute must be desperate to settle. Mediation is a consensual process which will only work if everyone wants a negotiated settlement. If only some want to talk turkey, it won't work. One lot will do all the talking while the others sit and listen until they get fed up and walk out;

information. The dispute needs to be sufficiently defined for the parties to know what they are arguing about. Wild claims bandied about in correspondence cannot be mediated. Sizeable claims set out in structured statements of case are not prime contenders without the evidence to back them up;

the right time. The combination of these two factors usually means that litigation needs to be some way down the line before the protagonists reach the right state of intelligence and desperation for mediation to bear fruit; and the right mediator. Views vary as to what makes a good mediator. There is some force in the argument that, if the time is right, little intervention is required to bring the parties to reason. Some mediators simply leave the parties to slog it out and step in only to read over the settlement agreement.

Nevertheless, it is generally believed that an effective mediator should have a good grasp of the subject matter, inspire confidence in the parties, be able to put the wind up those who believe they are on to a sure-fire winner and otherwise 'manage the expectations' of those involved.

Contrary to popular perception, this tends to point to an experienced specialist lawyer.

Mediation is only a real alternative to litigation if it achieves its objective. Otherwise it is no more than a diverting, but expensive, detour from the road to judgment. This point is recognised in a recent report by King's College London on the use of mediation in construction disputes. A survey of all settled or concluded cases in the construction courts shows that 32 per cent of cases settle as a result of mediation. In the main these cases concerned defects, design issues and professional negligence.

Of the mediations undertaken, 81 per cent were at the parties' instigation, with the remainder ordered by the court. Half of the settlements reached were achieved either during the exchange of statements of case (33 per cent) or shortly before trial (24 per cent). The remainder occurred anywhere between issuing the claim and judgment. The estimated costs saved as a result of mediation varied from £25,000 to £300,000. While 38 per cent of the mediators were construction professionals, a larger number still, 48 per cent, were construction barristers. Like I said, experienced specialist lawyers.

Kim Franklin is a barrister and chartered arbitrator at Crown Office Chambers in London. Visit www.crownofficechambers. com

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