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The Carrot Beats The Stick

Date: November 8, 2012 Posted by Comments Off on The Carrot Beats The Stick

Published in The Lawyer Magazine 16th April 2012.

The tale of two beers and a litigation-busting libation….

The Government has recently decided to introduce automatic referral to a mediator of all claims below the current small claims limit of £5,000. One could be mistaken for thinking that this is the thin end of the wedge towards compulsory mediation, but the Government has made clear that this is not the case. This is welcome clarification. Where there is compulsory mediation, numbers rise, but that is about the only positive. Settlement rates and respect for the process usually decline. People don’t like being forced down a path other than one they have chosen, particularly at the outset of a dispute when they can be more resolute than ever. Take that old lawyer joke. A new client waiting in the reception area of ‘Bastard, Bastard and Smith solicitors’. When told that Mr Smith was ready to see him, the client replies ‘Oh, I was hoping to see one of the Bastards’.

The Government has also proposed a review of the effectiveness of mediation information. This is also welcome. For there is no shortage of information itself. It’s just a bit one dimensional – ‘go mediation – it’s less bad than court’. Parties should see mediation as a business process that can avoid long, drawn out and expensive negotiation (not just litigation). More importantly, they should see mediation as a way of maximising their chances of settlement once they decide to try and resolve matters.

If the Government’s aim is to keep more cases out of court, they should think about all those that don’t mediate but go on to trial because negotiations have failed. Take the case decided last year between two breweries, Samuel Smith and Cropton Brewery. It was noted by the judge that despite two (obviously unsuccessful) without prejudice meetings, the case should have been referred to mediation. He clearly recognised that many cases will not settle in negotiation, but will at mediation. Mediation is so much more than simply turbo-charged negotiation.

Whatever might have been in the Samuel Smith case, what we do know is that negotiation is an inherently adversarial process, with many pitfalls. A smirk too far, an insult too cutting and there they go, it’s a walk out! A stroppy without prejudice letter invites a similar response, with complete polarisation the result. Negotiation can also be an open-ended, time consuming and costs-guzzling process, often lacking that intensity of focus that mediation offers. At mediation, proposals can be analysed and dealt with in half an hour, not days or weeks. Parties’ interactions can be managed so as to help not hinder, and traction built and maintained until the job is finished.

Of course, not all parties need mediation. Avery Brewing and Russian River Brewing each developed a Belgian style beer but both called it Salvation.  Did they slug it out?  No, they decided to blend the beers and called the result …. ‘Collaboration, not Litigation Ale’ of course.  Not a name that roles off the tongue, particularly after a few, but one that captures the genesis of a no doubt fine beer.

This is the kind of story that makes a mediator go weak at the knees, even though these parties didn’t need one. However, plenty of parties do, and if negotiations are likely to prove rocky, protracted, expensive or inconclusive, why not streamline the process and increase the prospects of settlement by enlisting the help of a settlement professional? It makes sense, but it must also remain the parties’ choice!

Jon Lang is a full-time independent commercial mediator and immediate past chairman of the Mediation Committee of the International Bar Association.