Mediation has long been a feature of civil litigation in the UK. As a structured form of negotiation with the aim of resolving legal disputes, it offers an alternative to more formal processes such as litigation and arbitration, and is often highly effective at achieving an outcome. In this article, dispute resolution lawyer Robert Kenyon discusses how mediation works and why it is encouraged as an alternative to litigation.

How does mediation work?

The term “mediation”, as a form of “alternative dispute resolution” (or “ADR”), has come to mean slightly different things in different contexts, but there is a broad consensus among those involved in substantial business disputes as to what it means.

Typically, the parties to a dispute will come together, with their legal advisers and the mediator, and through a series of meetings, over the course of a day, work towards reaching agreement on how to resolve their dispute.

The mediator does not make a decision (or, usually, even express any views), but is there to facilitate the discussion between the parties with a view to encouraging a settlement. A good mediator will be effective at getting the parties to assess the relative strengths and weaknesses of their positions, and to consider the legal costs, time and effort involved in the event that they do not reach an agreement at the mediation and instead continue with their dispute.

Usually, it is accepted that everything discussed in the mediation process remains confidential. This encourages the parties to speak more freely and to make concessions without fear that they are prejudicing their case if they do not reach agreement at the mediation, and they go on to fight the case in court.

If the parties do reach an agreement to resolve their dispute, then the terms of that agreement will be recorded in a binding contract. Mediation therefore provides an opportunity for the parties to agree to resolve their dispute on terms which a judge would not be able to order if they went to court. For example, the parties may agree to continue to do business with each other but on revised terms. A good mediator will often prompt the parties to have ideas about terms of settlement which would not be available if a judge were to decide the case. Mediation can therefore be a highly effective method for resolving disputes.

Tips for making the mediation process effective

Mediation is most effective if, of course, all the parties go into the mediation process with a desire to reach an agreement and a willingness to compromise. There is no point in a party agreeing to take part in a mediation if they are simply going to go through the motions and if they have no real intention of making any concessions with a view to reaching a compromise solution.

Mediation is most likely to be successful at achieving an agreed outcome if it takes place at the right stage in the dispute. It is a good way of closing a gap, when the parties already know each other’s positions and when there has already been some discussion towards reaching a settlement; it is not usually an effective way to find out about the other side’s case or for starting settlement discussions from scratch. That said, even where a party simply refuses to entertain the idea of a settlement, progress can sometimes be made by bringing the parties together, with an experienced mediator, to face each other and to confront the issues between them.

Can the courts require parties to take part in mediation?

A key feature of mediation is that it is entirely consensual. It is up to the parties to decide whether they wish to take part in a mediation at all, how the mediation itself is to be conducted, and whether they reach any agreement. A party to a dispute cannot be forced to take part in a mediation and, if they do agree to take part in a mediation, they cannot be forced to reach an agreed outcome. It is entirely open to the parties not to reach any agreement at a mediation and to go on to run their dispute through other processes, such as litigation or arbitration.

The court rules of practice and procedure do put some considerable pressure on parties to take part in mediation and make it clear that litigation should be a last resort. If court proceedings are commenced, the parties are strongly encouraged at an early stage in the process to consider whether to suspend the case, allowing mediation to take place. Ultimately the court is able to make a party bear a greater share of the overall costs of the case if they have “unreasonably” refused to take part in a mediation.

Could mediation become compulsory?

The view that the court rules should go further, however, and that mediation should be compulsory, has been gaining traction. Some parts of the civil justice system do require parties to take part in something close to compulsory ADR. The Civil Justice Council published a report in July 2021 which concluded that introducing compulsory ADR would be legal (the issue, essentially, being whether it was incompatible with the right to a fair trial), and that it would be “potentially an extremely positive development”.

More consideration needs to be given to the types of claims and the situations in which compulsory ADR would be appropriate. Requiring parties to take part in a mediation when it is unlikely to be successful in resolving the dispute (or narrowing the ambit of the dispute) could be a waste of time, legal costs, and court resources. In August 2021 the Ministry of Justice launched a Call for Evidence seeking feedback on how disputes may be resolved outside the court room, stating that its ambition was “to mainstream non-adversarial dispute resolution mechanisms, so that resolving disagreements, proactively and constructively, becomes the norm”. A response is expected in due course.

There is still some way to go before mediation becomes compulsory, but it appears that it is very much the direction of travel. The situation is evolving, and we can surely expect mediation to continue to take an increasingly prominent role in the resolution of disputes.

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This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.