legalwatch How to "win" in mediation David Gwillim explains why mediation is becoming such a popular form of alternative dispute resolution LARGE projects in the process and pharmaceutical sectors carry big risks. Despite the best-laid plans, things can go wrong. This is when the parties are likely to end up in dispute. Court proceedings and arbitration are notoriously expensive and adversarial. Mediation is becoming an increasingly attractive option to resolve large disputes without ending up at loggerheads. what is mediation? Mediation is a dispute resolution process in which an independent third party helps two or more parties negotiate more effectively because the third party holds information from each side that the others do not have. Through the trust that is reposed in mediators, parties can find extra value that conventional negotiation misses. is mediation a good thing – the myths and the reality Above: Mediation is becoming an increasingly attractive (and less costly!) method of dispute resolution 20 Interest in and demand for mediation is growing in many industries, spearheaded by multi-national companies. They are interested in meditation because it offers an alternative to the other common forms of alternative dispute resolution including expert determination, adjudication and arbitration. However, lawyers tend to be creatures of habit and these are not always good ones. It is generally perceived that lawyers are looking to score points; they want to grandstand, play hard-ball and win, whatever the cost. The onlooker tce june 2006 could be forgiven for thinking that a lawyer believes that better fees are to be made when a case does not settle and proceeds to litigation. The process of mediation requires a lawyer to give greater control to his client and that, of course, means that the lawyer risks losing control of his case. This again could be seen to sit at odds with the usual manner in which a lawyer would wish to conduct matters. The reality, of course, is different. The case is the client’s case and successful mediation means a satisfied client. the business case The simple truth is that businessmen want to get on with their business. In a construction or engineering project, engineers want to pour concrete, solve technical problems, complete the project and move onto the next one. There are many reasons why no business wants to tie up their resources in long drawn-out dispute resolution proceedings and damage the relationships on which their trade thrives, courting unwanted publicity in the process. Traditional dispute resolution procedures result not only in the direct expense of legal costs, but also the tying up of senior, productive personnel who have to devote time away from running their business to concentrate on the conduct of and participation in the legal proceedings. The process of litigation involves procedures that invariably are well- known to the lawyers involved, but which are not necessarily readily understood by the untrained businessman. This can be contrasted with the more open, straightforward form of negotiating employed in mediation which will be something with which the client will be much more familiar. Another reason is that the outcome of litigation and arbitration is always uncertain. Litigation frequently produces damaging publicity and hurts the reputation of the companies in the market place. Litigation, once commenced, cannot be controlled and this lack of control is even more marked under the new procedural regime bound up in the new Civil Procedure Rules. Furthermore, litigation is seldom final. Appeals can bring another year or two of uncertainty. In foreign arbitrations, enforceability in jurisdictions where the assets actually are always poses considerable difficulties. In under-developed foreign jurisdictions, alternative dispute resolution in a neutral country is almost always the best option. To get a better understanding and appreciation of its strengths, let's consider the advantages and share some tips on how to get the best out of it. preparation is the key Against the background of agreed or exchanged issues in the mediation, both parties make a significant investment in preparing a position statement with supporting documents. The first task is to explain the issues to a mediator in legalwatch a way that is attractive, digestible and persuasive. The mediator is not actually interested in imposing the ‘right’ solution on the parties or establishing precisely where the merits lie. Nevertheless, against the background of a principled mediation, a mediator will need to be shown where the middle ground is. That is the most important aim of a position statement and this should be backed up with primary material and cross-referenced. A good position statement will have been drafted with the mediator in mind. Often there is a short meeting between the parties and the mediator individually where the mediator introduces himself, outlines the procedure that the mediator wishes to adopt and explains the rules of the mediation. The aim of this first meeting with the mediator is to convince him that your side wants to settle, will be amicable and responsive to any reasonable proposals and that your side will conduct themselves in a principled and cooperative way. Often the day starts with the mediator obtaining a comprehensive note of the attendees and a signed mediation agreement which will address the following key issues: • the parties can’t sue the mediator; • anything that takes place in the mediation is without prejudice. The mediator’s notes are not available for production in any subsequent proceedings and the mediator cannot be the subject of a witness summons; • anything said by the parties to one another or to the mediator cannot be raised in subsequent proceedings; • the mediator will want assurances that those present are the individuals with full authority to settle. the first set piece A plenary session will follow this first meeting in which both parties set out their respective cases. This is the first opportunity for your side to outline the following key elements to the mediator: • Settlement: that the party seeks a bona fide principled negotiated settlement; that the settlement ought to take into account the party’s case against the background of the agreed or identified issues and then to explain the issues in more or less detail against the backdrop of the documents. • The issues: the legal team can step back from the dispute and enable the client and the technical team to explain the issues directly to its peers in the opposing party and to the mediator. This will often be the first occasion on which the decision-makers in the opposing party will have had to assimilate the dispute from your side’s point of view. Until that moment often the only knowledge that it will have had of a significant dispute will have been filtered by its junior staff, by its technical advisers and by its lawyers. This means therefore that this is the opportunity for the parties to tell it like it is directly to someone of equivalent status. This requires some practice and rehearsal but it is useful if this is done in an informal, relaxed and direct manner. After the break-up of a plenary session the parties will go back to their own rooms and the mediation process proper then begins. The process itself throws up a number of practical challenges. Some factors can easily be dismissed as trivial but can in fact influence a successful mediation. It is important to scout out the accommodation beforehand. The windowless room can be an advantage in mediation but on the other hand can also result in complete failure. The participants in mediation should be comfortable as the process, although conducted in a relatively short period of time, is intensive. Another consideration is refreshment. The mediation process could last well into the evening and the participants need to keep an eye on blood sugar levels and hydration. Something as simple as a lack PSL ChemFlux Intelligent Reactors a new way to develop drugs Total Reliability of forward planning to supply enough food and drink has been known to cause the failure of an otherwise promising mediation process. The mediator is bound to spend long periods of time with the other parties to the mediation. That means relative inactivity in the party not being attended by the mediator and to overcome the cabin fever that results it is suggested that you bring reading material to fill the time. This will also help avoid the trap of trying to second-guess what is happening in the other mediation rooms. It is helpful during a long mediation to request that the mediator hold a second or even third plenary session in order to see whether areas of the dispute or key issues can be advanced or modified or simply discussed. David Gwillim is a partner in Speechly Bircham’s construction & engineering group (www. speechlys.com/ construction_ engineering) the agreement It is important to remember that an oral agreement is not worth the paper it is written on. The typical mediation day ends at 20:00 hours or later. The participants will be tired and may not be able to devote sufficient care and thought to the terms of a concluded settlement. It is vital to have a laptop and a skeletal settlement agreement available so that the agreement itself can be typed up, circulated and signed there and then before anyone leaves. The lawyer, in mediation, is no longer an advocate, he is a faithful and trusted guide. The lawyer is not there to foul up the mediation by discussing strategy behind the mediator’s back, by posturing, by threatening to leave the mediation or generally by throwing his weight around. The lawyer’s role is to work with the client and the mediator by exercising perseverance and patience to achieve a settlement. If this is understood, and the considerations discussed here are understood, the mediation should be a success, the client achieves a favourable outcome, without having to go down the costly route of litigation. tce • Non intrusive real-time monitoring of reaction & crystalization conditions • Increased process understanding and optimization • Calorimetry & temperature control maximize process efficiency • Reduced batch to batch variability & failures • Reaction fingerprinting & endpoint detection • Improved yield and product purity • Reduced development costs and times, getting drugs to market faster • Fully scalable • Incorporates COFLUX™ technology US: +1 (208) 376-7008 Europe: +44 151 448 7700 Email: [email protected] Japan: +81 3 3790-8011 www.powdersystems.com june 2006 tce 21