This article has grown from a mock mediation organised in February 2011 for SCL at 4 Pump Court in the Temple, devised by Matthew Lavy, a barrister in those Chambers. It was repeated by popular demand in September 2011. Barristers from those Chambers took the role of counsel for the parties, Simon Henderson for the software house, and Alex Charlton QC (in February) and Duncan McCall QC (in September) for the purchaser. I was invited to play the role of the mediator on both occasions. The thoughts expressed below represent my own opinion on a number of topics in relation to IT mediations in general. It should not be assumed that they are necessarily shared by anyone else, and what follows is certainly not intended to be a primer for others to follow.
1 Preparation by the mediator
How much ought the mediator to read in advance? Experience shows that the parties are usually reluctant to pay the mediator to spend much time in advance of the mediation in reading documentary material. I tend to agree that it is rarely the case that the mediator needs to read much more than a position statement from each party (which should be short) and the essential terms of the contract (omitting irrelevant boilerplate and schedules). IT disputes are notorious for the volume of paper generated on each side, and I reckon that there is little to be gained by the parties paying the mediator to spend the necessary days (or even weeks) reading enough of the papers to undertake an early neutral evaluation of the dispute. Reading too far into the case could even inhibit the mediator exercising his proper function of facilitating the negotiation of a compromise settlement by the parties; I believe that function to be essentially incompatible with conducting an early neutral evaluation.
2 Prior discussion
Should a mediator discuss the case in advance with each side separately? A mediator is free to discuss matters with one side in the absence of the other, unlike a judge or an arbitrator. However, I have rarely if ever found it desirable to start discussing the case with one party in advance of the mediation, unless to see what each side would prefer in relation to the procedure to be adopted. I do sometimes speak to each party separately to try to dissuade them from having the mediation start with a plenary session, for the reasons discussed in section 4 below.
3 Meeting the experts alone
In an IT mediation, should the mediators meet the experts on each side in the absence of the parties and their legal representatives? I myself have not so far felt the need to do so. However, Clive Freedman, a barrister in practice at 3 Verulam Buildings and an experienced mediator, remarked following the September mock mediation that when he is mediating a complex technical dispute he is always concerned at the outset to check that there has been a sufficient exchange of information for each party to be able to understand the other party’s case, and thereby make a more informed assessment of prospects of success. He said that in one particular case his meeting the experts (without the parties or the lawyers) before the main mediation meeting made it possible to break the deadlock between the parties and to achieve a settlement. Of course, not every dispute turns on technical issues, but if the dispute does so, this course is well worth considering.
4 Plenary meeting
Is an opening plenary session a good idea? There are several reasons why I try to avoid them. At worst they encourage each side to adopt a very tough and uncompromising position, making it more difficult later for either of them to make concessions without losing face. As counsel acting in a mediation for a software house, I have more than once been opposed by a criminal silk, who has obviously been engaged on the theory that the user’s main aim in the mediation is to nail the software house with an allegation of fraud. Still less do I favour the mediator bringing the parties together at the outset of the mediation in order to deliver a condescending lecture on the need to reach a compromise. As counsel I have even heard a mediator announce that he did not represent either party, but “represented the compromise”, as if to say that the mediator was the advocate for a particular settlement that he was determined to achieve. In my view there is nothing at all that a mediator need say to both parties together at the outset. It is not the function of the mediator to achieve a compromise at whatever cost. Each party already knows why it is attending the mediation, and a number of motivations may be in play. As to introductions, the parties themselves have usually met each other many times before the mediation starts, and if their representatives wish to be introduced, I think that this is better done informally in the corridor or in one party’s room rather than in plenary session.
5 Mediator’s plan of action
That is not to say that the mediator should have no preconceived plan of how to conduct the mediation in order to facilitate the parties coming to terms. The plan will necessarily be tentative, and may have to be abandoned very quickly, but the mediator has to start somewhere. Of course, every dispute has special features, and every mediator has an individual style. One approach is for the mediator to start with an issue which would ultimately have to be ruled upon by a judge or arbitrator, but which raises ambiguity, so that the mediator can point to the risks of fighting and losing on that issue. The issue might be whether the pre-contract negotiations would be admissible in court at all; or to what extent the contractual language governing the dispute or part of it is capable of being given different meanings; or how success in performance of the software is to be judged; or whether the losses claimed might or might not arise from the breach of contract alleged; or the scope of an exclusion clause; and so on. A second approach might be for the mediator to start by concentrating on the economic advantages to each party of having arrived at the position each is now in: for example, the substituted performance by which the purchaser has acquired a better computer system from a third party than it originally contracted to acquire from the software house involved may make it easier to settle with the software house if the latter has realised too late that it cannot avoid making some loss on the contract. A third approach might involve lateral thinking of a solution which could never be imposed by a judge or an arbitrator: in one case where the dispute turned on the meaning of a poorly drafted and ambiguous contractual provision in a contract concluded many years before, I started by asking each party separately to re-draft the provision to make it unambiguously in that party’s favour, and then asked how much extra each party would have paid or demanded all those years ago to have the provision in that unambiguously favourable form.
6 The opening
My initial approach is to try to spend a short time with each party, mostly to prevent the other party thinking that it has the upper hand because I am spending a long time with the other! With each party I start by repeating the assurance that everything said to me is confidential, and will not be passed on without permission. I then proceed with caution, trying hard not to make statements, but only to ask questions. At this stage I am concerned to gather information that may be useful for the purpose of facilitating a settlement. I will only pursue my preconceived plan of action for as long as it seems helpful for that purpose. Not unusually, one party considers that it has a ‘killer point’ on which it is bound to succeed, and is keen to have that point explored first. That is often very useful, since it is very rarely the case that there is no arguable response to the supposed ‘killer point’.
7 The middle game
The realisation that there is more than one way of looking at a point may often be a surprise to a party. Naturally, it is vital at this point that the mediator is careful not to embarrass or belittle either the party’s staff or the party’s legal adviser. Yet quite often it turns out that the mediator’s question, whether there might not perhaps be more than one way of looking at a point, tends to reflect legal advice that has already been given to the party, who had tended to reject that advice. It is also my invariable experience that each party welcomes me expressing the view that the other party is not dishonest but is putting forward an arguable point of view, and that each party wants to know whether in my view the other party is sincere in hoping to reach an acceptable compromise agreement. I am glad to say that so far I have never yet been embarrassed in answering these questions, in that I have always been able to answer to this effect: ‘I do not believe that your opponents are crooks. I do believe that their appreciation of the dispute differs from yours, and that any compromise will necessarily involve concessions on each side. I do believe that your opponents are negotiating in good faith in the hope of reaching a settlement if possible, but not at any cost.’
8 The end game
I pursue the chess analogy by treating serious negotiation as the end game. Initial offers are not infrequently of far less than the party making the offer is in fact ready to concede, this being the nature of negotiation, and it is a generally held view that it is a tactical error to disclose one’s hand too soon. Of course, it may also be a mistake to start too low. My firm view is that a mediator has no obligation to pass an offer on to the other side if the mediator believes that this will inhibit rather than promote a compromise agreement. I have certainly told a party that I decline to pass on its offer or counter-offer, if I think that it would be harmful to do so, usually reporting to the other side that I think that the parties are still too far apart to make it worthwhile to do so. The end game starts when each party is making offers that could be taken seriously, and there is therefore a realistic range within which settlement might be achieved. At this stage I believe it is a mistake for a mediator to formulate his or her own idea of what an acceptable settlement might be, and still more dangerous for the mediator to express any such view. The parties know more than the mediator will ever know, and the mediator’s role should continue to be one of facilitating a settlement. That is done by removing obstacles to settlement that may be capable of being removed, but not to ordain a settlement, or seek to persuade the parties to settle. If they both want to do so, they usually will. If not, they should not and indeed cannot be forced to do so.
9 Is mediation desirable?
I have never regarded mediation as a necessary step in any dispute, and I never start my involvement as mediator with a positive desire for a settlement. I do not believe that every dispute is capable of being settled. In an IT dispute, the parties are usually comparatively equally matched in terms of resources but, even so, there remains a danger in mediation that the party which is richer, or able to hold out longer, will win a more favourable result than might objectively be regarded as just. So I must conclude by emphasising the point I have already made more than once, that I do not see the role of mediator as devising a settlement for the parties. It must only be the role of facilitating the parties reaching the parties’ own settlement.
Peter Susman QC practises from Henderson Chambers, and has 20 years’ experience of advising and representing the provider or the user of IT or other high tech services and products, and he also sits as a recorder with a TCC ticket, and acts as an arbitrator, early neutral evaluator, and mediator of IT disputes.
