In brief - Mediators need to examine the strengths and weaknesses of each case
A mediator who allows a plaintiff to believe that their claim has reasonable prospects of success when it does not can be doing that plaintiff a huge disservice.
Mediation's stated aim of helping parties to settle disputes
Mediation is "marketed" by its proponents as a means by which the parties may be assisted to reach their own settlement of a dispute. Words to this effect are commonly found in mediation agreements.
The idea seems to be that the mediator will be able to assist the parties to discuss the relative strengths and weaknesses of their cases and in doing so, cause them to lead themselves inexorably to a (almost always) financial settlement that fairly reflects those factors.
Mediators increasingly ignoring relative strengths and weaknesses of case
In my experience, the reality is usually somewhat different. Indeed, I have noticed an increasing number of circumstances where the mediator displays no interest in any discussion about relative strengths and weaknesses. In such a case, a party's position paper is soon relegated to the mediation dustbin and all one is left with is "how much are you prepared to pay?"
This can be very irritating. It pays scant regard to the work frequently done by the parties and their lawyers (on all sides) to present their clients' cases in their best light. It also ignores the idea that in a fair and reasonable system of justice, the unmeritorious claimant ought not be rewarded with an unjustified pot of money. Nor, for that matter, should the lawyers who have propounded a baseless claim be rewarded with a fee.
In my opinion, in circumstances where it is plain - or should be, on any reasoned assessment of the evidence - that there is a very good likelihood that a defendant will win at hearing, it is quite wrong for a mediator to seek to pressure a defendant (or the defendant's insurer) to make a substantial contribution to a settlement. A nominal contribution perhaps, but not anything substantial.
Mediator seeking contribution from defendant even though claim has little merit
I had a case recently where it was quite obvious, having regard to how the plaintiff's case had been prepared and presented, and the evidence that had been obtained on the part of the defendants, that the plaintiff would very likely lose.
Despite that, the mediator sought to extract $100,000 from my client, even though the true quantum (assuming nil contributory negligence) was only some $300,000, and my client was the least likely of all the defendants to be found liable.
Plaintiffs should be made aware when they are unlikely to win their case
In my view, the errors made in that mediation were these:
- The mediator allowed the plaintiff to believe that the claim being made had reasonable prospects of success when it self evidently did not
- The mediator allowed the plaintiff to believe that the quantum claimed was reasonable (when the amount claimed was about double the true quantum)
- The mediator displayed no interest in the merits of the various defences and merely sought to extract sufficient dollars from the defendants to make the plaintiff go away
In so doing, the mediator threw away any chance there was for the mediation to resolve the matter on a basis which gave the plaintiff something, albeit much less than was being claimed.
Mismanaged mediation has enormous costs for plaintiff
The case went to hearing. The plaintiff comprehensively lost. Costs incurred in hearing preparation post-mediation were substantially greater than had been incurred pre-mediation. The plaintiff, an individual, is now facing costs orders which will require the sale of the family home to meet.
In this instance the mediation system failed all the parties. Regrettably, this case is not unique.
This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2020.