"The number of sports related disputes has increased exponentially in recent years and, while some sports regulations and contract provide for early mediation prior to commencing arbitration or litigation, mediation is generally under-utilised in sport. I predict a surge in mediation cases in the coming years as clients realise the full potential of being empowered to frame the terms of resolution of their disputes (not to mention the cost and time benefits as well as the potential to preserve relationships and protect reputations)".
On the basis of the above, given the under-utilisation of mediation in the context of disputes within the sports sector, we have produced a short guide which explains the process, and benefits, of mediations.
What is mediation?
Mediation is a popular and effective way in which to resolve a dispute. The alternatives of litigation or arbitration are sometimes not an appropriate mechanism to reach a resolution because, more often than not, the process ensures that one party walks away as the "loser", with significant legal cost of their own lawyers and those of the winning party. Decisions may often be published (and proceedings may be open to the public and press depending on the forum) with the risk of associated reputational damage.
What is a typical and general mediation process?
First of all, the parties will need to agree to mediate and appoint a mediator and sign a mediation agreement.
A useful starting point to appoint a mediator is through an independent body such as Sport Resolutions (a dispute resolution service for sport operating globally, offering arbitration, mediation, tribunal and expert opinions). An alternative is the Court of Arbitrator for Sport website (www.tas-cas.org) which maintains a list of mediators.
Subsequently, on the day of the mediation, each party would be welcomed by the mediator and taken to their own room for the mediator to explain to them:
- Who the mediator is, namely an independent third party who has been chosen by the parties. It is not the role of the mediator to determine the merits of either party's case, but to help the parties to facilitate agreement.
- The purpose of mediation and that the primary objective is to see whether a mutually acceptable commercial resolution can be found to bring the dispute to the end.
- The process on the day and that it would be
split as follows:
- An initial short joint meeting with the mediator and the parties to allow each party to introduce and develop points from their respective position papers or simply to convey how each party perceives its case and how they would like to resolve this.
- The parties then go back to their private rooms, with the mediator "shuttling" between those rooms, in order to facilitate the negotiations. It is usual for a mediator to encourage each party to think beyond the legal arguments and challenge whether a remedy ordered by the court would be in the interests of either party. Crucially the parties do not need to convince the mediator or the other side of their own case, but should address how they want to redress the situation.
- As the mediator shuttles between the parties, all being well, key issues can be addressed and agreed upon by the parties. The mediator is only able to share information with another party if the disclosing party agrees to this. It is crucial that both parties have trust in the mediator to discuss matters openly in their private sessions.
- If all goes well, the parties will then prepare and sign a settlement agreement.
What are the advantages of mediation?
These are summarised below:
- Maintaining a commercial relationship: One of the primary benefits of engaging in a mediation exercise is where the parties have a mutual interest in resolving the dispute and/or if the parties are open to working together in the future.
- Confidentiality: A mediation is confidential and nothing discussed at the mediation can be revealed to the court (if proceedings subsequently commenced) or any other third party (eg the press).
- Creative solutions: Mediation offers the parties the chance to broker their own settlement with the assistance of an independent mediator; not one imposed by an arbitrator, mediator or judge. Parties can be creative with commercial solutions which, if left to the court, would not be a possibility.
- The Civil Procedure Rules: These rules govern the conduct of litigation in England and Wales. The CPR encourages parties to attempt mediation in the context of litigation and, as such, cost sanctions may follow if a party unreasonably refuses to engage with a mediation proposal.
- Contractual/regulatory compliance: contracts (and/or relevant sporting regulations) increasingly provide for the obligation of the parties to enter into mediation prior to commencing litigation/arbitration.
- Cost effectiveness: Mediation is far cheaper than court proceedings, if it is successful. There is, of course, a cost associated with preparing for and attending a mediation.
- Control: The parties are in control of the mediation and will agree upon a mediator and venue and timing for the mediation.
- Speed: Mediations are far quicker than court proceedings. While a mediation can be held in a matter of weeks from a dispute arising, in all likelihood, this case would not be fully determined by the High Court for 12 – 24 months.
Interesting facts about mediation
- The civil/commercial mediation industry in England and Wales has been growing at a rate of 15% year on year since 2010.
- The commercial mediation profession saved businesses around £3 billion a year in wasted management time, damaged relationships, lost productivity and legal fees.
- 75-80% of cases settled on the day of mediation, with another 10-15% settling shortly after.
- Provided a country is a signatory of the Singapore Convention, a mediation agreement can be enforced in that country just as an arbitration award can be enforced worldwide (under the New York convention).
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.