Mainstream mediation

Rhys Clift, a partner at Hill Taylor Dickinson, an accredited mediator and a co-ordinator of the Marine Solicitors Mediation Service, looks at what makes a successful mediation

“THE man with the new idea is a crank until the idea works,” according to Mark Twain. New ideas are initially ignored. If they persist they may be treated with hostility or derision. Then, suddenly, they are orthodox and part of mainstream thinking. This is as true of commercial mediation as of any other radical new idea. Has it yet reached the third phase?

Of course mediation itself is not new. It has a long history, for example in the fields of international diplomacy, in family and labour relations and in civil law or Asian jurisdictions. But, though there has been very significant progress, the use of mediation is still relatively new in commercial disputes in common law jurisdictions, with the exception of the US, where it is widespread. This is perhaps particularly true of maritime disputes in England, where it is probably under-used.

Why? Certainly commercial mediation passes Mark Twain’s crank test. It works. Anecdotal evidence from lawyers and mediators, and figures published by mediation service providers, show that there is a high statistical probability of success in commercial mediation, that is in reaching a settlement. Some say that it is as high as seventy or eighty per cent, either on the day or shortly after. So why is it still not a remedy of first choice for the right case, at the right time?

There may be two main reasons. First, the absence of judicial pressure. Notwithstanding the groundbreaking work done by the Centre for Dispute Resolution (CEDR) in the early 90s, commercial mediation only took off with the introduction of the new Civil Procedure Rules in 1999. But while a number of maritime disputes go to the courts, a very high percentage are submitted to arbitration. As yet, arbitration tribunals do not push parties in the direction of mediation, in contrast to the judiciary. This could be changed by client demand. Secondly, notwithstanding the explosion of interest in commercial mediation, a thorough knowledge and understanding of the process is still not widespread. It is not yet comfortable and familiar to all.

This is in some respects not surprising. Until recently, lawyers in England were not trained in negotiation skills or dispute resolution in university or law school. The mindset was quite different from that into which many have now moved. The term ‘dispute resolution’ was not used. The training was in litigation or arbitration. Subconsciously, perhaps, the emphasis was on the process of handling disputes, rather than on the solutions. Legal proceedings required the application of rigorous rules of procedure designed to identify issues, to unearth relevant evidence such as documents, witness testimony, expert opinion, and finally putting all this before a judge for determination. Arbitration has in many respects, notwithstanding some significant differences and exceptions, grown into litigation by any other name. Lawyers have prided themselves on familiarity with the various procedural rules, always seeking the maximum advantage for their clients. The procedures are orthodox and familiar to the lawyers, and thus to their clients.

This is not of course to overlook negotiation. This has historically run hand in glove with legal proceedings. Lawyers understand that litigation or arbitration, though essential in some cases, can be slow, risky, costly and unpredictable. There are few certainties in life and this is certainly true of legal disputes. Indeed the relative uncertainty of litigation can be seen in the varying results on the same issues in the same case, at first instance, in the court of appeal and finally in the House of Lords. This seems to be by no means unique to England but rather true of litigation, and arbitration, generally, wherever it is conducted.

In any event, many lawyers are highly skilled in identifying the risks at an early stage and seeking to resolve disputes by negotiation. But it takes two to tango. To strike a deal, all parties must engage in negotiation and shrug off personal struggles or even vendettas. Even then the best efforts may be frustrated.

The more complex the case and the more parties there are involved the more difficult it is to tango. Of course, the vast majority of cases are settled, and always have been, long before commercial mediation was on the scene. But how often was settlement reached after completion of discovery (disclosure), after exchange of witness statements, after exchange of expert's reports, after delivery of the brief to counsel; in short, after most of the cost and pain had been suffered?

Compared to litigation and arbitration, the reasons to give mediation careful consideration, to understand it thoroughly and to master its use are absolutely compelling. In addition to producing results, mediation is quick. It can take two or three weeks from start to finish. It is inexpensive, certainly compared to routine litigation or arbitration. It is not adversarial, although harsh words are often said. It is without prejudice and confidential. None of the concessions or the venting of anger will ever become public.
It gives the parties themselves an opportunity to participate, to explain themselves in a way that is wholly impossible in legal proceedings. It offers the equivalent of a day in court, with the dense concentration of effort that this brings, but without the attendant risks. It can preserve business relationships by concluding deals before the parties have beaten each other into submission, and it offers solutions that can never be offered by an adjudication procedure where, generally, there must always be a winner and a loser.

Finally, it has features which even negotiation lacks. It has a structure, a timetable and moreover the involvement of an independent third party, which is its key distinguishing feature and catalyst.

Obviously, mediation is not a universal panacea, nor is it a substitute for legal proceedings. The catalogue of benefits offered by litigation that cannot be offered by mediation are well known - securing jurisdiction, the interruption of a time-bar, setting a precedent, access to draconian measures like search and seizure orders and to publicity, although only when absolutely necessary. The simplistic approach to a dispute may be "negotiate, mediate then litigate", but generally the various methods of resolving disputes need to be skilfully used in conjunction with one another.

So have lawyers done enough to embrace mediation and to offer it to their clients? Many a harsh word has been said about lawyers. According to the American journalists Clarence Darrow and John Nasebit, “The trouble with law is lawyers”, and “Lawyers are like beavers. They get in the mainstream and dam it up”. But this does not take account of the enormous cultural shift which has taken place in the legal profession.

Lawyers are now ever more focused on resolving disputes quickly, efficiently and if possible cheaply. Mediation, including mediation in the maritime field, is one of the most startling examples of this shift, whether by individual or collective effort of lawyers or firms.

The Maritime Solicitors Mediation Service (MSMS) is one example. MSMS was formally set up in late 2003 and launched on the internet in January this year. One of the main objectives of MSMS has been to encourage the use of mediation in the resolution of disputes across the whole maritime and marine insurance sector, in conjunction with careful use of formal legal proceedings where required. There are currently nineteen member firms listed on the website www.msmsg.com by various means actively promoting mediation and providing guidance in its use.

The use of mediation is a skill. To get the best out of it, first decide whether the case is right for mediation. Not all are, but it has a surprisingly wide application. Choose the right mediator. His/her role is crucial, and specialist skill and knowledge is of considerable value. Prepare your case thoroughly. Cut your written presentation and supporting documentation down to the core essentials. Understand the process thoroughly before attending on the day and, finally, be absolutely sure you have full authority to conclude any deal which might be negotiated.

To demonstrate some of these features, MSMS held its first mock mediation in September this year at the offices of Hill Taylor Dickinson in London, giving some insight into the process and how it might work in a maritime dispute.

Mediation is on the verge of mainstream practice in maritime disputes. A number of mediations have now been conducted through the MSMS procedure and indications are that it is working well.