Mediation is a process in which a neutral third party (the mediator) is appointed by the parties to a dispute to assist them to explore possible ways of reaching a negotiated resolution. Mediators tend to be appointed to facilitate negotiations, rather than to evaluate the relative strengths or weaknesses of the parties’ respective positions.

Mediation can be a very effective method of attempting to resolve a dispute, not least because the parties themselves remain in control of whether, and if so on what terms, to settle a dispute. It is also possible for the parties to agree a negotiated outcome that might not be possible to achieve through litigation (where the scope of remedies available are limited).

However, the process is not a ‘magic wand’. Parties need to bear in mind its limitations and to prepare well to maximise their chances to achieve the best outcome. Like any negotiation, tactical considerations are important. It pays to have experienced legal assistance:

Timing is key
The level of legal costs incurred by the parties in relation to the dispute, up to and including the mediation, can sometimes de-rail the prospects of settlement. Accordingly, there can be an advantage to mediating at an early stage before legal costs become a serious impediment to settlement. Timing is key.
Knowledge = power
In order to have a meaningful settlement discussion, it is important to have a sufficient understanding of the issues in dispute. Sufficient does not mean complete, though. It is unrealistic to expect disclosure of information or documents to the same extent as would be expected by the time of a trial, but careful thought should be given to what knowledge parties need in order to make a reasonable informed assessment of their position.
The right people in the room
The vital decision-makers should be present and well-prepared, having given careful thought with their legal team to the issues in dispute, their negotiating plan, and what any settlement might look like. However, too many voices make settlement less likely, so mediation teams should only be as big as they absolutely need to be. Otherwise time can be wasted on trying to reach internal consensus rather than in negotiating with the other party. Further, those in attendance should have the requisite authority to settle the dispute at the mediation, if appropriate terms are reached.
Which room?
Mediations have traditionally been conducted in-person, with all parties attending an agreed venue with their respective representatives. The global pandemic has necessarily led to a significant increase in the number of online mediations. As restrictions ease, there remain appreciable savings to be made by conducting mediations online. However, the advantages of in-person mediation include knowing that your opponent has committed to the process of mediation and thus to settlement not only through their willingness to devote a day or so to it but also through their preparedness to travel to the venue with their legal team and to incur the cost of that; as well as the potential opportunity to look your opponent in the eye and shake their hand; and to see how they react when difficulties in their case are put to them.
Crunch the proper numbers
Settlement at mediation is not simply the result of a mathematical equation. The litigation process is lengthy, unforgiving and more often than not does not entirely compensate the winning party; there are inevitably sunken costs, financial or otherwise, that are never entirely compensated for at trial. It is imperative that mediating parties have a true understanding of what they stand to gain or lose if settlement is not achieved.
Mediation is but an instrument of negotiation
Too frequently it can be seen by participants as the ‘be all and end all’ of a claim, the modern equivalent of their day in court. It is rarely that. It is part of a process of negotiation – perhaps the most important part – but still just a part. A significant number of the cases settle not at mediation but after mediation, sometimes very shortly after. Mediation can be used by parties as an opportunity to get to understand their opponent’s position and to send a strong message to the opponent as to their own position. This can lead to a better outcome than might be achieved on the day of a mediation.