Monday, 28 October 2019

Mediation isn't always the answer

A Shropshire solicitor says mediation is not always the right way for businesses to resolve commercial disputes.

Andrew Oranjuik, from Martin-Kaye Solicitors in Telford, said currently anyone involved in a dispute was expected to consider mediation to try to resolve the issue.

“For a long time, it has rightly been recognised that mediation was usually preferable to taking a case through the courts.

“The process has a high success rate as both sides are brought together to reach a settlement with the aid of a skilled and neutral third party – and if a settlement is reached, it will certainly be less expensive than a court case. But mediation is not right in every case and sometimes it can cynically be used as a tactic by one of the parties involved.”

Mr Oranjuik’s advice follows a case where he and his team acted for a defendant in a commercial dispute over the ownership of industrial equipment.

“The other side’s case appeared to be weak, and despite offers and counter-offers being made, it was clear they were not interested in anything other than total victory, and they were pressing for us to take it to mediation.

“But we advised our client not to agree to mediation as it’s not an inexpensive process and we believed the chances of achieving a settlement were very slim given the other party’s approach.”

The case resulted in a two-day trial in the county court where the claim against Mr Oranjuik’s client was dismissed.

“There was then an argument over costs – the claimant said our client should not recover costs because we had refused to mediate. But after reviewing the offers that had been made, the court ruled our client had acted reasonably and so costs were awarded.

“Refusing to mediate will often be unreasonable, and if that’s the case, the refusing party can expect to be criticised by the court and face the consequences. But it’s not a universal rule and clients involved in a dispute should be wary of the other side trying to bounce them into mediation to get a settlement.

“Each proposal for mediation should be considered on its own merits, and depending on the case, allowing the courts to decide may turn out to be a better approach.”