What is the price for peace?
It’s a question that a good mediator will explore before and during mediation. And it’s a question that legal advisors should consider, too. What is your client’s price of peace – and what is the opposing side’s price of peace?
The ‘price’ may be purely monetary, and calculations will take into account the cost of alternatives – commonly litigation and arbitration – and the risks involved, plus factors such as time and resources required to pursue legal action and potential reputational damage. But the ‘price’ may not be financial at all. Less tangible but possibly more valuable, the price might be an apology, an amendment to an existing contract or an agreement to change working practices going forward. In one multi-party competition law mediation I was involved with, the parties agreed to release a joint press statement as to how practices would be changed going forward, in return for the CMA agreeing to desist from taking regulatory enforcement action.
In another example concerning an Inheritance Act Claim the beneficiaries apologised to the claimant on a without prejudice basis for alleging the claimant was merely a tenant of the deceased and had no personal relationship with the deceased (the couple, though not married, had lived together as husband and wife). As a mediator I explored with the beneficiary siblings the fact that these allegations were made purely to advance the defence to an Inheritance Act claim but that they had caused enormous distress to the claimant, who was said to be deeply in love with the deceased and had cared for her during a long illness. The giving of the apology at an early stage of the mediation allowed settlement discussions to progress when previously they hadn’t been possible.
Fighting for legal costs
Sadly, a vindictive party may want to extract the ‘price’ of seeing the other side suffer in order to carry out the settlement terms (although of course a solicitor may not act for a client driven by malice). This may occur, for example, where one party insists on recovering their legal costs on as full a basis as possible in addition to the principal sum.
As a mediator, it’s important to sense when legal costs are an issue and to realise there may even be a split view within one room as between solicitor and their client. In this case possible approaches are to have a global sum offered, and to leave it to the client and solicitor to agree together how to apportion the payment, or for the parties to agree the substantive sum with costs to be assessed (less desirable as a complete outcome isn’t achieved at the mediation). It may be necessary for the mediator to explore in each room why there’s a significant difference between the costs of each party so a greater understanding of what a fair outcome might be can be achieved.
Lawyers and the price of peace
Of course one party’s price for peace may be quite different to what their legal advisers say their entitlement should be. And so it should be. While in most commercial matters there are legal remedies, business people are at liberty to ignore them, choosing perhaps to put the matter to bed and get on with exploring new opportunities using the time and money they’ve saved.
Lawyers shouldn’t be surprised when a client doesn’t follow their legal advice on the day of mediation. Frustrating as it may be, that advice is just one of many factors being considered by the client when deciding whether and at what point to settle. Being a sounding board can be an important role for an adviser during mediation and it may be helpful to talk about options with the client when the mediator isn’t in the room. Allow the client to work through their options with you and be ready to support them in the decision-making process.
Likewise, parties should listen to their advisers but have confidence in their ability to make their own decision. Only they can truly appreciate the dispute in the context of their commercial and personal goals so give clients freedom to be bold and brave. And never forget the importance of that simple question – ‘What is your price for peace?’