In brief - Mediators need to examine the strengths and
weaknesses of each case
A mediator who allows a plaintiff to believe that their claim
has reasonable prospects of success when it does not can be doing
that plaintiff a huge disservice.
Mediation's stated aim of helping parties to settle
Mediation is "marketed" by its proponents as a means
by which the parties may be assisted to reach their own settlement
of a dispute. Words to this effect are commonly found in mediation
The idea seems to be that the mediator will be able to assist
the parties to discuss the relative strengths and weaknesses of
their cases and in doing so, cause them to lead themselves
inexorably to a (almost always) financial settlement that fairly
reflects those factors.
Mediators increasingly ignoring relative strengths and
weaknesses of case
In my experience, the reality is usually somewhat different.
Indeed, I have noticed an increasing number of circumstances where
the mediator displays no interest in any discussion about relative
strengths and weaknesses. In such a case, a party's position
paper is soon relegated to the mediation dustbin and all one is
left with is "how much are you prepared to pay?"
This can be very irritating. It pays scant regard to the work
frequently done by the parties and their lawyers (on all sides) to
present their clients' cases in their best light. It also
ignores the idea that in a fair and reasonable system of justice,
the unmeritorious claimant ought not be rewarded with an
unjustified pot of money. Nor, for that matter, should the lawyers
who have propounded a baseless claim be rewarded with a fee.
In my opinion, in circumstances where it is plain - or should
be, on any reasoned assessment of the evidence - that there is a
very good likelihood that a defendant will win at hearing, it is
quite wrong for a mediator to seek to pressure a defendant (or the
defendant's insurer) to make a substantial contribution to a
settlement. A nominal contribution perhaps, but not anything
Mediator seeking contribution from defendant even though claim
has little merit
I had a case recently where it was quite obvious, having regard
to how the plaintiff's case had been prepared and presented,
and the evidence that had been obtained on the part of the
defendants, that the plaintiff would very likely lose.
Despite that, the mediator sought to extract $100,000 from my
client, even though the true quantum (assuming nil contributory
negligence) was only some $300,000, and my client was the least
likely of all the defendants to be found liable.
Plaintiffs should be made aware when they are unlikely to win
In my view, the errors made in that mediation were these:
The mediator allowed the plaintiff to believe that the claim
being made had reasonable prospects of success when it self
evidently did not
The mediator allowed the plaintiff to believe that the quantum
claimed was reasonable (when the amount claimed was about double
the true quantum)
The mediator displayed no interest in the merits of the various
defences and merely sought to extract sufficient dollars from the
defendants to make the plaintiff go away
In so doing, the mediator threw away any chance there was for
the mediation to resolve the matter on a basis which gave the
plaintiff something, albeit much less than was being claimed.
Mismanaged mediation has enormous costs for plaintiff
The case went to hearing. The plaintiff comprehensively lost.
Costs incurred in hearing preparation post-mediation were
substantially greater than had been incurred pre-mediation. The
plaintiff, an individual, is now facing costs orders which will
require the sale of the family home to meet.
In this instance the mediation system failed all the parties.
Regrettably, this case is not unique.
Peter Sise explores how your contractual clause for recovery of legal costs might not do what you think it does.
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