Case Study: The Unpredictability Of Mediation Outcomes

A skilled mediator facilitated early mediation in a professional negligence case, leading to a surprising £300,000 settlement, despite initial staunch opposition and insurers' denials, highlighting mediation's strategic negotiation benefits over traditional litigation.
UK Litigation, Mediation & Arbitration
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In this case, the presence of a skilled mediator was crucial but the success hinged on strategic negotiations and persuasion.

The case also highlighted the value of attempting mediation early in the litigation process. It provides a platform for both sides to explore settlement options, which might not be apparent through traditional litigation. The case exemplifies how mediation, facilitated by effective negotiation strategies, can result in favourable outcomes even when initial prospects seem bleak.

Background

After resolving the principal claim, we were tasked with pursuing a professional negligence case against the original solicitors who had represented our client. Our calculations revealed that the client had incurred losses exceeding £500,000 due to the original solicitors' negligence.

Initial Response and Proceedings

As expected, the original solicitors' insurers denied liability, a standard response in such cases. Legal proceedings were initiated, and the insurers filed a robust defence. Despite the staunch opposition, we proposed mediation as a potential resolution pathway.

Mediation Process

The mediation day unfolded with four representatives from the insurers and their leading counsel present. Notably, no one from the original solicitors attended. The session was predictably filled with repeated denials from the insurers, with neither side willing to compromise on their formal positions initially.

Our clients, fatigued by litigation, were primarily seeking acknowledgment of wrongdoing by the original solicitors. For them, the principle was more significant than the financial compensation. They were even willing to settle for a nominal amount plus costs. However, despite their readiness to make significant concessions, the insurers continued to deny any liability.

Turning Point

As the mediation progressed with no offers on the table, we set a deadline of 3:30 PM to leave if no progress was made. At 3 PM, unexpectedly, the insurers made an offer of £200,000 plus costs. This offer was surprising as our clients were prepared to settle for around £50,000 plus costs.

Feigning dissatisfaction, we rejected the initial offer as "derisory." After about 30 minutes of further negotiations, a settlement was reached at approximately £300,000 inclusive of costs. This outcome exceeded our clients' expectations, who were delighted with the resolution.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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