If your mediation was unsuccessful, what are your options?

If the parties have not resolved the dispute after a mediation, there is a range of options, including other methods of Alternative Dispute Resolution (ADR). It is always worth considering, though, whether there is any merit in convening a further mediation, either shortly after the first mediation, or later during the course of the proceedings, perhaps, for instance, after material key documents have been exchanged or expert reports obtained.

Negotiation

Mediation can serve to bring the parties closer together, and provide a platform for future discussion, particularly if it has helped to narrow the issues in dispute. This can greatly assist and help to facilitate direct negotiations between the parties, which can continue at any stage. Experience shows that even if a settlement is not achieved on the day of the mediation, many cases are settled shortly thereafter.

Notifying the court

If proceedings have been issued prior to commencing the mediation the court may have issued an ADR Order, or a stay may have been granted in order for the mediation to take place. In these instances the court will usually need to be informed that the mediation has been unsuccessful. Ensure the terms of the ADR Order, or the order imposing the stay, have been adhered to when informing the court of the outcome.

It may be appropriate in certain cases to seek a further stay if the parties wish to continue to discuss settlement or undertake alternative ADR steps. It is important to ensure that court directions and the overall trial timetable are carefully considered and that the parties attempts to resolve matters commercially do not prejudice any key court dates without the court’s permission.

Other ADR options

Early Neutral Evaluation (ENE)

In this process, an independent and impartial evaluator is appointed to give parties an assessment of the merits of their case. The aim of this is to provide parties with a realistic assessment on the strengths and weaknesses of their case.

ENE can be useful to help parties to understand their position as a basis for negotiation and can be used to consider the facts, evidence, technical issues or legal merits, or a combination of these elements. If you have made progress through your mediation but there is a certain element of the dispute that you are unable to come to an agreement on, ENE might help the parties dispose of or further narrow any residual issues left at lower cost than proceeding to a trial.

As with mediation, both parties need to engage in the process and the decision is usually non-binding, which means either party may continue with formal court proceedings if not satisfied with the view provided.

Expert determination

Unlike mediation or ENE, an expert determination is a binding process. Despite the name, this process can be used for disputes of any type and is not reserved for disputes with only technical issues.

An independent expert, who typically possesses specialised knowledge in the relevant field, is appointed to resolve the dispute by evaluating the evidence, applying their expertise and providing a determination. As expert determination is a binding process it might be considered when negotiations come to a stalemate, as an alternative to issuing a claim in court.

The benefit of expert determination over litigation is the cheaper costs and the speed at which a dispute can be dealt with. It is potentially less adversarial than court based litigation, which may allow the parties to preserve a commercial relationship. The process is also confidential. However, there will be limited recourse if the expert finds against you.

Arbitration

If the parties are reluctant to escalate matters through the courts then they may consider arbitration as an alternative. Arbitration is based on contract and accordingly will require the parties to enter into an express written arbitration agreement. It is a consensual process so it would not be possible to compel a counterparty to agree to arbitrate if they refused to do so (unless there is a pre-existing contractual clause to that effect). If a dispute has arisen but the parties nevertheless believe arbitration will be a more suitable forum for their dispute an arbitration agreement can be drawn up and an arbitration tribunal appointed (this usually consists of one or three arbitrators) who will determine the dispute.

Arbitration is confidential, the procedure can be as flexible and tailored to the parties’ requirements as needed (or it is possible to select pre-existing sets of rules issued by institutional arbitral bodies, such as the London Court of International Arbitration). Arbitration Awards are directly enforceable (pursuant to the New York Convention) in most jurisdictions around the world much more readily than English court judgments. It is particularly suited to disputes where there is a cross border element. Rights of appeal to the court are usually more restrictive in arbitration than in standard court based litigation which can bring finality.

Issuing a claim

If mediation or negotiation has not been successful and other ADR options are not thought to be suitable it will be necessary, unless a commercial view is taken to walk away from the dispute, to litigate the dispute through the courts.

Our Dispute Resolution team has experience of advising clients on all aspects of the commercial mediation process, ADR, arbitration and litigation options. Please contact us if you would like to discuss any of the issues raised.