No practising litigator should be unaware of the benefits of ADR: nor indeed the enlarged Protocol and CPR requirements that plainly oblige litigants to consider those benefits with their opponents before court proceedings are issued. Additions made to the Protocol Practice Directions with effect from 1st April 2003 highlight mediation as being an integral part of today's civil procedure landscape and in nearly every case one's advice to parties in dispute should be they would be unwise to ignore the benefits and availability of mediation, or some other form of ADR, before embarking upon litigation.

Few experienced mediators would disagree with the proposition that the only case which is unsuitable for mediation is one where one or both parties patently refuse to consider dialogue aimed at achieving a settlement and instead eagerly awaits his or her 'day in court'. When advising clients, disputed factual, legal or causation issues should not persuade one to rule out mediation irrespective of what stage the dispute is at. Nor should advisors adhere to the view that the larger the claim in monetary terms the less suitable it is for mediation. In fact the practice of ADR teaches one that very often the greater the quantum of a claim the more likely it is that a settlement can be achieved through mediation.

Some commentators coin the phrase 'a win win process' when summarising the benefits of mediation. The first and most obvious of these flow from the early resolution of a dispute: the saving of significant costs and management time, assured confidentiality, reputations protected (indeed often in a commercial dispute senior managers relish the fact that they come out of the mediation process with enhanced rather than sullied reputations thanks to their perceived successful hands on involvement during it) and of course the huge relief that it is all over! That makes for happier clients and very often enhanced professional relationships as between solicitor and client. In commercial cases, the success that the parties achieve for themselves in settling a dispute at mediation frequently leads to re-enforced and thus better trading relationships thanks to lessons learned by managers, greater goodwill and a belief that if those same parties can resolve one dispute in a commercial and cost effective fashion, there is no reason to believe that they cannot do so when the next set of potentially litigious circumstances visit them in the course of their ongoing trading relationship. As for the private client, the same considerations apply and particularly so in cases where land ownership is in dispute between neighbours. Win or lose at trial, the likelihood is that they will still be living beside each other for some time to come and a dispute resolved through mediation rather than at trial is bound to give those individuals a better chance of enjoying some peace and quiet in the years ahead.

What if on the mediation day there is no settlement of the dispute despite the strenuous efforts of the parties and their professional advisors? All is not lost: indeed statistics maintained by CEDR Solve clearly demonstrate that in the majority of these cases the parties go on to achieve a settlement before trial and in a very significant number, often within days rather than weeks of the mediation. This is because invariably the mediator will have had the opportunity to help the parties understand their opponent's position, their aspirations for a settlement and perhaps most importantly of all, and through the mediator's reality testing, an awareness by each party of their strengths and weaknesses in the context of the dispute. All of these factors are likely to provide a fertile seed bed for successful negotiations in the weeks immediately following the mediation.

Litigators who have experienced mediation will tell you that there are benefits to be had even when no settlement is achieved prior to trial. Often there is a narrowing of issues which in turn helps to reduce preparation time as well as the duration and cost of a trial.

Not surprisingly these are all benefits that the Legal Services Commission will have in mind when applying the Funding Code Criteria in its determination of applications for public funding. To an increasing extent case managers and Funding Review Committees expect assisted persons to demonstrate with greater clarity why mediation is not an appropriate route to take in the furtherance of attempts to avoid litigation or bring an end to it. This is particularly so in clinical negligence and other high cost publicly funded cases which end up being monitored by the Commission's Special Cases Unit.

Despite all the obvious benefits that flow from mediation, parties to a dispute are often not persuaded by these alone. Likewise their lawyers. In such instances I would suggest that you should draw the attention of one or both to the fact that the majority of cases mediated by a trained mediator settle in one day. Statistics published by CEDR Solve in respect of commercial mediations set up by it over a 12 month period during 2002/2003 show that: -

• There was a 28% increase in cases mediated compared with the same period during 2001/2002.
• The settlement rate remained steady at 78%.
• 95% of the mediations were conducted in one day.
• The rate of voluntary mediation (as opposed to judicially directed) increased by 50%.

To a greater rather than lessor extent these are all matters that clients locked into dispute should be alerted to. Moreover it must not be thought by them that the only time to mediate is before proceedings are issued. Often the necessary consensual desire to settle does not materialise until 'pistols have been drawn' and the litigation progressed to the stage when witness statements are exchanged. Often that is when self doubt begins to come to the fore and not surprisingly perhaps, it is then that parties to a dispute become more amenable to the possibility of mediation. I like many mediators have experience of being asked to mediate in very high value cases only weeks before a lengthy trial. In others the mediation often takes place shortly after the Case Management Conference stage following a Part 26.4 stay of the proceedings.

The benefits of mediation are not the only factor which a litigator should be bringing to the attention of his or her client before proceedings are issued. Equally important to bear in mind are the CPR and Protocol requirements which oblige potential litigants both to consider mediation and offer it to their opponent. Cost penalties may well flow if they do not comply. Moreover there is a need now to alert clients to the higher risk of having visited upon them an adverse costs order at the conclusion of the trial if the judge is satisfied that he or she has unreasonably refused to mediate at an earlier stage of the dispute.

With these considerations in mind the starting point for the lawyer is to ask himself or herself whether one of the six Pre-Action Protocols applies in the sense that there is either a requirement or directive for a party to potential litigation to consider mediation with their opponent. In this regard I set out below what is stated in three of the Protocols: -

The Personal Injury Protocol

'The parties and their legal representatives are encouraged to enter into discussions and/or negotiations prior to starting proceedings. The Protocol does not specify when or how this might be done but parties should bear in mind that the courts increasingly take the view that litigation should be the last resort, and that claims should not be issued prematurely when a settlement is in reasonable prospect'.

The Construction and Engineering Disputes Protocol

'In respect of each agreed issue or the dispute as a whole, the parties should consider whether some form of alternative dispute resolution procedure would be more suitable than litigation, and if so, endeavour to agree which form to adopt'.

The Professional Negligence Protocol

'The parties can agree at any stage to take the dispute (or any part of the dispute) to mediation or some other form of alternative dispute resolution (ADR). In addition, any party at any stage can refer the dispute (or any part of the dispute) to an ADR agency for mediation or some other form of ADR. When approached by a party or an ADR agency with a proposal that ADR be used, the other party or parties should respond within 14 days stating that: -

(a) they agree to the proposal; or

(b) they agree that ADR will be or may be appropriate, but they believe that it has been suggested prematurely. They should state when they anticipate when it would or may become appropriate; or

(c) they agree that ADR is appropriate, but not the form of ADR proposed (if any). They should state the form of ADR which they believe to be appropriate; or

(d) they do not accept that any form of ADR is appropriate. They should state their reasons.

This letter should be copied to the other party or parties and can be disclosed to the court on the issue of costs...'

I turn now to those cases where no Protocol applies. As from 1st April 2003 and the coming into force of the 30th Update to the CPR, new requirements were introduced in respect of these. One was for the unreasonable refusal to mediate to be a consideration in the context of 'Pre-Action Behaviour'. Parties to a potential dispute are now required 'to follow a reasonable procedure intended to avoid litigation, and not to be predicated on the assumption that litigation is inevitable'. Added to the list of requirements set out in paragraph 4.3 of the Practice Direction are: -

(f) state (if this is so) that the claimant wishes to enter into mediation or another alternative method of dispute resolution; and

(g) draw attention to the court's powers to impose sanctions for failure to comply with this practice and, if the recipient is likely to be un-represented, enclose a copy of the Practice Direction'.

As for the defendant, paragraph 4.6 contains reciprocal provisions relative to its response including the requirement to: -

(e) state whether the defendant is prepared to enter into mediation or another alternative method of dispute resolution'.

It should be borne in mind that prior to April 2003 judges were already being proactive in the area of imposing cost sanctions. The first 'shot across the bows' was back in November 1999 when in the case of Dyson and Field v- Leeds City Council (unreported), the Court of Appeal warned the Defendant who was reluctant to mediate of the risk of additional cost sanctions in the event of there being a re-trial. In Cowl v- Plymouth City Council (The Times 8.1.02) Lord Woolf said 'Today sufficient should be known about ADR to make the failure to adopt it, in particular when public money is involved, indefensible.'. Then came Dunnett v- Railtrack Plc [2002] EWCA civ. 302 when the successful Respondent to an appeal failed in its claim for costs consequent upon a refusal to mediate. Brooke LJ stated in what was a unanimous Judgment of the Court of Appeal: -

'[Counsel for Railtrack], when asked by the Court why his clients were not willing to contemplate ADR, said that this would necessarily involve the payment of money which his clients were not willing to contemplate, over and above what they had already. This appears to be a misunderstanding of the purpose of ADR. Skilled mediators are now able to achieve results satisfactory to both parties in many cases which are quite beyond the power of lawyers and courts to achieve…it is to be hoped that…the judgement of the Court will draw the attention of lawyers to….the possibility that, if they turn down out of hand the chance of ADR, when suggested by the Court, as happened on this occasion, they may have to face uncomfortable costs consequences'.

Since then there have been other cases where warnings of cost sanctions have been given or adverse costs orders made notably in Hurst v- Leeming LTL 9.6.02 when Mr Justice Lightman said 'Refusal to mediate is a high risk course to take' and in Leicester Circuits Limited v- Coates Brothers Plc [2002] EWHC civ. 812 the Court of Appeal again considered it right to impose a costs sanction against a party who refused to mediate. It should be emphasised though that this will not always be the case and readers of this article who act for clients who may find themselves having to face the prospect of an adverse costs order because of a disclinclination to mediate will be assisted if they have regard to two recent decisions one being in the case of Corenso (UK) Ltd v- The Burnden Group Plc [2003] EWHC 1805 (QB) a first instance decision and the other a Court of Appeal decision in the case of Valentine v- Allen, Nash and Nash I[2003] EWCA civ. 1274.

The message now and for the future is clear. Whether it be the private client locked into an acrimonious dispute, the commercial institution seeking far ranging monetary and other redress, or a Government Department or indeed a local authority each involved with potential litigation, all will be ill advised to ignore the benefits of mediation and the potential for adverse costs orders to be made.

Kevin Smyth is a Partner of and Head of Litigation with Burt Brill & Cardens, Solicitors, Brighton. He is a CEDR Accredited and Registered Mediator, a Practitioner Member of the Law Society's Civil/Commercial Mediation Panel, a Member of the Court of Appeal's Mediation Scheme Panel and a panel member of Specialist Mediators LLP.

[This article appeared in The Legal Executive Journal in November 2003]