The Middle Ground – When Resolution is the Goal

The Middle Ground is a monthly reflection on disputes, mediation and resolution.

The photograph above this column was taken during Hansells Legal Partnership launch with Norfolk County FA. I have no claim to any footballing ability, but I like the image because it captures a moment of movement. In disputes, parties can often become stuck in their positions. A large part of mediation is locating movement and helping people find a way forward.

Volume 1 – Winkworth, Bonfires and the Cost of Waiting

November is the month of bonfires and fireworks when we are reminded how quickly a small spark can become something much larger.

That thought occurred to me when I read recent reports that the High Court proceedings involving Winkworth plc and its non-executive chairman and former chief executive, Simon Agace, have been stayed once again to allow the parties to attempt mediation. The dispute, which involves allegations concerning directors' duties, confidential information and a relationship agreement, remains unresolved and has not as yet been determined by the court. However, the parties have decided that now is the time to discuss whether a resolution can be achieved.

On any view, that seems sensible.  What struck me, however, was not the mediation itself but the point at which it has arrived. By the time the parties reach this stage, a great deal has usually happened. Arguments have been advanced, positions will have been set out and defended, lawyers have exchanged correspondence, Court applications have been made and, significantly, costs have been incurred.

That is not a comment or criticism directed at the parties involved in this case because it is something I see repeatedly across disputes of all types, but one of the frustrations I have developed over the years is how easily legal costs can become a barrier to settlement.

Nobody enters litigation under the illusion that it will be cheap. The likely expense is usually obvious and will have been well explained from the outset, yet time and again parties and their advisers become drawn deeper into the argument before any serious consideration is given to whether there may be another way of resolving it.  Instead, increasing amounts of time and money are spent defending positions, both publicly and privately. With that expectations form and the argument, itself starts to take on a momentum of its own - the difficulty is that the more invested people become in the dispute, the harder it can be to step back from it.  Discussions about settlement are no longer taking place against a blank sheet of paper but rather against the backdrop of everything that has already happened and everything that has already been spent.

In my experience, that does not always serve parties particularly well.

One of the reasons I value mediation is that it creates an opportunity to have a different sort of conversation before costs and entrenched positions begin to dictate the future of the dispute. That does not mean every case should settle. Some disputes need a judge. Some issues require determination. Equally, mediation is not a magic wand, and it only “works” if those involved are prepared to engage with the process honestly and realistically.

What it can do, however, is provide an opportunity to move away from the question of who can win the argument and towards the question of how the dispute might be resolved and that requires something which can occasionally be in short supply when litigation is at its most intense - a willingness from everyone to listen.

The decision to explore mediation in the Winkworth dispute may prove to be a sensible one. Whether it succeeds remains to be seen but what the story reminded me of is how often mediation is treated as something to consider after the expensive options have already been explored. Whilst a mediation taking place after significant sums have been spent may still be a very good idea, the better question is whether it would have been an even better idea before those sums were spent.

After all, we all notice fires, but the real skill is noticing the spark.

Mark Scott is a Legal Director at Hansells Solicitors and a CEDR Accredited Mediator. The Middle Ground is a monthly column reflecting on mediation, disputes and the practical realities of resolving conflict.