28 law south east


Why mediation is the best solution for commercial disputes


When commercial agreements turn sour, one option is to choose mediation as a way of resolving the dispute. As Frankie Tierney, head of dispute resolution at law firm Herrington & Carmichael LLP explains, mediation can not only provide a solution, it can also be much lighter on the pocket


Tierney, who leads the Thames Valley and the Blackwater Valley practice as chief executive, says that increasingly the courts are taking a dim view of anyone refusing to try mediation and will often penalise them by not awarding costs – even if they subsequently win.


“There have been a number of cases recently where the courts have made it quite clear that if the parties have refused, without good reason, to engage in a serious invitation to meet and discuss the dispute, then they are at risk of not recovering their costs, even if they are subsequently successful in winning the case,” she said.


“You might want to take a hard-line approach, but bear in mind when you go to court, you have to look reasonable, and demonstrate that you have either taken up an opportunity to try and settle, or you have made an offer to meet the other side. If they have rejected that offer, then it is likely to stand you in good stead down the line.”


Tierney says issuing litigation proceedings should be the “point of last resort” and that it makes good commercial sense to try and resolve a case earlier in the process, not least because at some stage the parties may need to do business together again in the future.


Although many people are aware of mediation, she believes very few understand its true value.


While an informal “roundtable” approach can work, very often a more formal process is required and Tierney explains that this usually means appointing a professional mediator who works with both parties.


Choosing the mediation professional is important, especially where business disputes feature more complex technical issues, and the Herrington & Carmichael team works with professional services consultancy CEDR to find the right individual for each case. The opposing side will then be given a shortlist of


www.businessmag.co.uk Frankie Tierney


mediators to choose from, ensuring an independent approach.


“Negotiations can be easier if the opposing individuals aren’t eyeball to eyeball with each other,” continued Tierney. “Having a joint meeting, where the different groups are in different rooms with a mediator going back and forth between them can be beneficial.


It allows


them to express their angst about what is going on in the privacy of their own room and work through their responses.


“Mediation is also without prejudice, so it allows the parties to be very frank in the knowledge that if agreement can’t be reached and the case does go to litigation, then information disclosed during mediation cannot be referred to in court.”


Although lawyers don’t have to be involved in mediation, Tierney says having a lawyer present can help facilitate the process and, presuming an agreement is reached, can draw up a binding agreement for both parties to sign on the day.


“If a case has been well prepared, if you pick a good mediator and the client takes a pragmatic view and is willing to work to resolve the dispute, then at least 75% of cases can be settled at mediation,” she said.


THE BUSINESS MAGAZINE – THAMES VALLEY – MARCH 2014


“The cost of the mediator will be shared between both parties, who each pay their own legal fees, and that’s considerably cheaper and quicker than going to court. You will also have reached an agreement which you have been in control of, whereas in court the Judge makes the decision and it may well be something which neither party likes, but which you are then bound by.


“My view is that if both parties settle at mediation and both feel slightly aggrieved, then that is probably the right result.”


Tierney says the fact that business clients are used to negotiating and making commercial decisions on a daily basis means once they understand the process, they are more likely to see the benefits of mediation, but she warns: “It’s important to come prepared, it is no good arriving at a mediation session and not being prepared to compromise.


If you


do have a ‘bottom line’ then you have to decide if you are going to stick to it or if there is room for manoeuvre.”


Most mediation sessions last no longer than a day, with the added advantage that the process is likely to be quicker than a court case, ensuring the business owner is able to get on with running his or her company, as opposed to being sidetracked by the judicial process.


So, as the courts increasingly take a harsher line on those who refuse to consider any form of mediation, Tierney says she urges anyone with a potential dispute to put their prejudices aside and start talking.


Details: Frankie Tierney 0118-9774045 frankie.tierney@herrington-carmichael.com www.herrington-carmichael.com


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