General Counsel: Financial Services

1. As General Counsel, what is your perception of the benefits of mediation as a form of dispute resolution for your organisation?

It is well understood that litigation is expensive and time consuming. In my experience, what is less understood by commercial clients is the way litigation unfolds over time. It is only after many months that correspondence between law firms will give way to the drafting of pleadings, and it is only at this stage that I see Directors fully focus on the strengths and weaknesses of their case. Considerable amounts of time and money have then been spent, and parties have become entrenched in both their view of the case and the outcome they must achieve to justify their investment of funds and time. The benefit of mediation is that it creates the possibility of a “mini trial” in a matter of months, and a fraction of the cost. During the preparation of a mediation statement, clients gain an insight into the work and cost involved in building their case. They will also be focused on the salient points, as the issues on which their case turns are brought to the fore. Finally, they will understand in a quick and accessible way what their opponent considers the key issues of dispute to be — and these are not always the same as the legal arguments. Parties often have an emotional investment in a case that ought to be considered as carefully as the commercial points if progress is to be made. On the day of mediation, because the parties can speak directly to each other, you can have the key stakeholders from each side in a room together, choosing whether they want to do a deal, or face the prospect of full litigation. In my experience, most commercial clients want disputes out of the way as quickly and cheaply as possible. Mediation allows that opportunity early on, before spent time and funds, and an entrenchment of views, outweigh the desire to come to a settlement.

2. Is there a lack of awareness and understanding about mediation within your sector/jurisdiction? If so, what misconceptions about mediation do you encounter?

I think that commercial clients are aware of mediation, but I don’t know many who understand it fully. I have often met resistance to it, because of the misconception that one can spend thousands of pounds arguing with the other side with nothing to show for it at the end. The objection I hear quite often is that you can walk away from a mediation at any point, and the time and money spent getting everyone round the table is wasted. Parties who are unfamiliar with mediation often believe that if there is not a guarantee of a binding decision at the end of a process, then that process is not worth investing in. In my view this is to fundamentally misunderstand the effect that mediation has on the psychology of the parties involved, the opportunity it presents for a structured early settlement, and the insight it can give into the case the other party believes that it has.

3. What are the business and legal challenges which influence your decision-making process when considering entering into mediation?

Mediation is a tool that works best with parties who have, albeit privately, accepted that litigation is too risky; either because they do not have the time and money to spend, or because the amounts at stake are not worth the expense and effort. If both parties are not of that mind, then getting an agreement to mediation is difficult. Further, mediation is often perceived by commercial clients as a less serious form of resolution. If a board of directors wants to give the impression that it is sure of its ground, and is going to pursue its opponent aggressively, they are unlikely to be persuaded to choose mediation.

4. Is mediation specifically included as a form of alternative dispute resolution in your organisation’s standard form contracts? If so, why? If not, would you support the courts being able to mandate mediation by parties to a dispute?

Mediation as a mandated first course of action in dispute resolution is in all our standard contracts with our clients. Because we provide financial services, if we are in dispute with a client, we consider it best practice to resolve that dispute in the quickest way possible, with a minimum of financial impact on the client. In my view mediation is the way to do that. I am fully supportive of courts mandating mediation.

5. At what point in a dispute would you consider initiating a mediation process and why?

I initiate a mediation process as early as possible. If you can get the parties to focus on the salient points early on, and prevent them from becoming entrenched, you can make significant steps in encouraging both sides to come to an acceptable resolution. I have seen a considerable amount of time and money wasted on arguments conducted by commercial clients “as a matter of principle”. It is a mistake to approach dispute resolution in this way, and the mistake is compounded the longer parties argue. Getting them to sit round a table and come to a compromise quickly is a far better use of time and resources.

6. What is your experience of appointing external mediators? Was this a straightforward process and what resources did you use to find the right mediator for your situation?

I have always worked through the Centre for Effective Dispute Resolution (CEDR) and find the process quick, simple, and easy. The mediators I have appointed have been sensible, practical, knowledgeable people who have been ideal for the job.

7. What steps do you think are key for GCs to take to maximise the chances of a successful mediation?

Involve key stakeholders in the detailed preparation of your mediation statement, so that two things are achieved. First, they are aware, early on, of the issues, strengths and weaknesses in their case. It is important to have an eye on these matters from the start so that you are realistic about your outcomes. Secondly, it gives your stakeholders an idea of how much work, time and therefore expense is involved if your dispute were to continue. I also encourage stakeholders to look at their case as they would any business deal. In other words, they need to leave their emotions at the door and look at the amount of time and money they have to spend, and what outcome they could accept. I have been known to explain this as identifying their “Mick Jagger” number. Accept that you can’t always get what you want, but you might get what you need.

8. Have you experienced a hybrid mediation (where some or all participants attend online) and if so, was it as effective as an in-person mediation? What would be your tips for ensuring a hybrid mediation is a successful process?

I have attended several hybrid mediations, where some participants were not there in person. They were all successful. In my view success depends on people being open to it being a useful tool, as well as having someone in the room who has made sure all of the technology is working beforehand and knows how to fix any glitches.

9. Have you seen an increase in the use of mediation in your sector since 2020? If so, what do you think are the causes at play?

I don’t have any views on this.