What is Mediation and How Does it Work

After agreeing to mediate, the parties then need to decide who the mediator should be and where it should take place, unless it is to be held virtually. The parties usually split the cost of the mediator, but the process is completely flexible, the parties can reach another agreement if they so wish.

Beforehand, the parties are usually required to sign a mediation agreement. This usually states that the process is confidential. That means that anything discussed on the day, or any documents shared, cannot be referred to afterwards if any agreement is not reached. 

The mediator will usually require a bundle of the key documents to help them understand the relevant issues. The documents will then also be available on the day if they need to be referred to.

A few days before, the parties will usually exchange position statements. This briefly sets out each party’s position and what they want to achieve on the day. 

Sometimes there is a joint session in which everyone comes together to discuss what they would like to achieve. However, there is not always a joint session as sometimes the parties do not wish to see each other.

The parties then go to their respective rooms with their legal advisors. The mediator will pass back and forth between the parties with offers to settle and will only share information between the rooms which they are authorised to disclose.

The main benefit is that it often results in settlement, which brings the dispute to an end. The process is also far more informal and cheaper than going to court.

Another advantage, particularly with disputes regarding estates, is that the settlement can be flexible. If the matter goes to court, the outcome is often quite rigid but the deal which can be reached at mediation can be more flexible.

For example, if the dispute is about the validity of a will of a mother who has two children and have excluded one from her will, if the court decides the will is not valid (and there is no other will) the estate will be distributed under the rules of intestacy. However, at mediation, the siblings could agree to split the estate 60/40 or 70/30.

If you refuse it can have cost consequences. If the matter goes to court, after deciding who should win, the court will then decide whether the loser has to pay the winner's legal costs. 

When deciding this, the court will consider whether there was an unreasonable refusal to mediate. For example, if you win your case but refuse mediation, the losing party may not have to pay as much of your legal costs had you agreed. 

In the case of Halsey v Milton Keynes General Trust [2004] EWCA Civ 576 the court noted it is for the unsuccessful party to show that the successful party acted unreasonably in refusing to mediate and should therefore be sanctioned with costs. The court identified the following non-exhaustive list of considerations when determining whether a party ‘s refusal was unreasonable:

• The nature of the dispute
• The merits of the case
• Other settlement options
• Cost of mediation
• Delay
• Prospects of success

It is recommended that if you are going to refuse to mediate, you should fully set out the reason for doing so.

No - there are other forms of Alternative Dispute Resolution, such as negotiations, adjudication, arbitration or Early Neutral Evaluation.