The benefits of keeping disputes out of court
Litigation can be a lengthy and costly way to tackle intellectual property disputes, but it is not the only way for opposing parties to resolve their differences.
Attendees at our Autumn Conference had the opportunity to hear from three experts in alternative dispute resolution (ADR) to find out why mediation can result in more satisfactory long-term outcomes for both parties.
With disputant parties and their legal teams increasingly directed to engage in mediation before their case reaches court, this was a timely session exploring the concept, process and its advantages for all parties.
Panel Chair Bill Lister, of Appleyard Lees, introduced Tom Cadman, who is Deputy Director General of the Chartered Institute of Arbiters. Tom outlined the key features and benefits of mediation:
Control: mediation offers both parties full control over the method in which their dispute will be submitted, and the outcome of the process. It is non-binding and parties can decide to withdraw at any point. This means that a decision cannot be imposed on parties; they must both agree. This contrasts with a court decision handed down by the judge.
Confidentiality - mediation’s confidential nature encourages openness, as parties can be assured there will be no consequences outside the mediation process.
Speed - a mediation process can accelerate the process of reaching agreement by avoiding lengthy litigation.
Cost - mediation can be considerably lower cost than the full court process.
An interest-based settlement - as the alternative to arbitration, mediation can incorporate a wider set of interests beyond the strict legal rights-based scope of litigation. This allows for creative approaches to settlements that can take into account preserving the future relationship between the parties.
Tom explained that, before mediation takes place, the parties agree to the rules under which it will be conducted. These include establishing its non-binding nature; agreeing on the appointment of a mediator and their fees; and assurance of confidentiality.
On how to select the right mediator, Tom advised parties to consider the mediator’s role and determine whether they should be a subject matter expert in the area under dispute, or skilled in the process of mediation. He also noted that there can be more than one mediator in complex cases where there are specialised issues or significant language or cultural issues in play.
On preparing clients for engaging in mediation
Denise MacFarland, of Three New Square, is a highly experienced mediator and Evaluative Neutral specialising in commercial disputes in the UK and internationally. She shared her ‘UGANDA’ approach to preparing clients for effective mediation:
Understanding – understand your client’s feelings and desires around the case, as these may be much broader than the facts of the case itself.
Goals – discover what the client really wants to achieve. Some goals are outside the scope of litigation, such as an apology or the return of a particular item, but the team won’t know the power of this as a negotiating tool unless the client shares it.
Achievability – it is important to manage expectations from the start and guide the client and team.
Need – discover what the client’s priorities are and what they need to happen, whether that is an injunction, money, a good public relations outcome, for example.
Dig deep – get as much information as early as possible from both sides so you can identify weaknesses.
Act early – early engagement in the mediation process is encouraged to maximise the chances of success. Once action starts parties can be very blinkered and restricted within the tramlines of litigation.
Denise also highlighted the value of early neutral evaluation (ENE) which involves an independent party, such as a judge, expressing a merits-based opinion on the case. This does not require the consent of the parties involved and is a judgemental approach, rather than the facilitative approach of mediation.
ENE can help to distil the key points at issue, identify weaknesses that may influence parties to settle, and potentially find areas of common ground. Denise recommended ENE as a useful approach, as it can often facilitate reaching a starting point for mediation, even if it doesn’t immediately resolve the case.
Even if parties don’t believe mediation will be successful, refusal to engage, or the act of ignoring an invitation to participate, can be deemed unreasonable behaviour and this may be taken into account when court costs are allocated.
How does a mediation session play out?
Guy Tritton, a highly experienced IP barrister in Hogarth Chambers, revealed how a mediation typically plays out.
Generally, it will start with a plenary session when both parties present their view of the case. Guy noted that this tends to be slightly posturing as parties lay out why they believe their case will succeed in court, their agreement to take part in mediation notwithstanding.
This is followed by break out sessions with the mediator moving back and forth between the two. The mediator will test both sides’ apparent beliefs about their case and correct them if they believe those beliefs are not accurate.
Throughout, the mediator will emphasis the negative aspects of continuing the route of litigation, with the aim of refocusing parties towards their best interests, rather than their ‘day in court’.
Guy also explained the tactics that can used to break apparent deadlocks, such as conducting a risk-based analysis of the likely outcomes of the case in order to give parties a reality check on what they might realistically achieve so they can make decisions on that basis.
He also agreed with Tom and Denise that mediation offers opportunities to focus on the interests of the parties, rather than the litigation itself. By being creative and thinking outside the box, parties can agree a settlement that incorporates multiple aspects satisfactory to both.
As a result, mediation is very often successful. Guy explained that he has settled several disputes where parties openly stated that they were only going through the motions to avoid an adverse costs order. He concluded saying: “A judge cannot craft an optimal solution. Litigation is very binary – you win, or you lose […] But settlements can be as creative as people want them to be and go far beyond what a court can or cannot order.
"The most powerful aspect of mediation is that you can reach a deal that meets the interests of both parties rather than going through the narrow hoops available to the courts.”