Mediation Update

We report on two aspects of mediation: selecting a mediator and the perils of not responding to a mediation proposal.

Selecting a mediator

The selection of a mediator involves the parties agreeing on a choice of mediator. Given that the parties are in dispute, this can become a difficult and long drawn out process. If one party puts forward a mediator, or list of mediators, the other party’s instinctive reaction will often be to reject the proposal, unless that party, or that party’s lawyer, has had a good experience with a nominated mediator in the past.

If the rejection is accompanied by a counter proposal for choice of mediator, more often not there will be a retaliatory rejection of that choice. The effect is that the process of choosing a mediator can cause delay and drive the parties further apart: exactly what mediation is intended to avoid.

The problem even arises where parties have agreed to mediate under the auspices of a recognised provider of mediation services. The provider will usually offer a short list of three mediators, from which the parties are invited to select one. But the party which first communicates a choice may well find that the opposing party rejects that choice and so on.

I have found that two approaches work well in practice:

  1. Where a shortlist of three mediators is received from a mediation provider, the parties can agree that one party shall delete one name and the other shall then delete a second name, thereby selecting the mediator. When I have suggested this to opposing lawyers, it has been well received. I allow them the choice of whether to make the first or second deletion. I include a proviso that if either party has a reasoned, deep seated objection to all three mediators, such as mediators having a conflict of interest, the whole list can be rejected and the mediation provider be asked to issue a fresh shortlist. However, the proviso has never been activated.
  2. Where no mediation provider is involved, the parties can agree to exchange simultaneously a list of, say, four potential mediators in numbered order of preference. If one name appears on both lists, that person becomes the mediator. If there are two or more names in common between the lists, the rankings are added together for each name and the one with the lowest total becomes the mediator (e.g. if mediator A is first on one list and third on other and mediator C is fourth on one list and second on the other, A becomes the mediator).

The more names listed, the greater is the chance of the parties making a common choice. But four names is a good “default” number, as it casts the net reasonably wide, but without burdening the parties with too much research into appropriate mediators. If the first exchange of lists does not result in the selection of a mediator, a further exchange of lists can be attempted. This approach is most likely to succeed where a dispute is within a specific field of expertise or where the size of the dispute merits a top level (and therefore expensive) mediator, as the pool of potential mediators will be smaller than in other disputes.

The perils of not responding to a mediation proposal

The Court of Appeal has extended the guidelines previously set out in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 as to whether and when a refusal to engage in Alternative Dispute Resolution (“ADR”, of which mediation is the most common form) amounts to unreasonable conduct deserving of a costs penalty. Specifically, it was held in the case of PGF II SA v OMFS Co 1 Ltd [2013] EWCA Civ 1288 that silence in the face of an invitation to participate in ADR is, as a general rule, itself unreasonable – regardless of whether an express refusal of ADR might have been justified. The costs penalty in the case was to deprive the winning party of the usual right to have its costs paid by the losing party.

The Court of Appeal’s reasoning was that parties should be encouraged to be open about their reasons for refusing ADR, so that difficulties can be ironed out or narrowed before the stage of trial is reached. The Court held that silence was even more worthy of punishment where the ADR proposal was detailed and serious (and not just offered as a tactical ruse).

The Court made it clear that this was only a general rule and one which could be departed from in rare and exceptional circumstances (for example where ADR is obviously inappropriate or if the lack of a reply was due to a mistake).

This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 020 7404 0606 and ask for your usual Goodman Derrick contact.