Commercial disputes can cause a great deal of disruption to a business and can waste a great deal of valuable time.  The effort and cost resulting from a legal disagreement is often underestimated and commercial mediation offers an effective solution to companies involved in these legal difficulties.

The hiring of a third party neutral commercial mediator provides the necessary structure for practical negotiation. A third party mediator enables the company to foster a constructive dialogue between M&A participants, or those involved in corporate conflicts. 

Acquisition International speaks to Tim Hardy, Head of Commercial Litigation at CMS Cameron McKenna LLP.

“I have been an accredited mediator since 1998 and I have been appointed mediator in over 70 disputes.  Typically I also appoint mediators in two or three disputes every year and I regularly advise members of my firm on all aspects of mediation, including negotiation strategy.”

How are you able to assist business professions with any corporate disputes they may face? What methods do you use?

“Familiarity with corporate transactions and representing corporate parties in over thirty  years of litigation enables me to quickly get to grip with the issues in dispute and deal with the characters, lawyers and clients, who are often very passionately involved in securing what they see as the right outcome. 

Handling these difficult situations is a key skill set that any mediator has to have. Of the methods I use to achieve a successful outcome, some of the most important are:

Empathy – Early in any mediation being able to empathise with the individuals, not agree, but show that you understand their situation, is incredibly helpful to winning their confidence that you will later need when you inevitably get to challenging their belief that they are in the right.       

Negotiation – Understanding the mechanics of negotiation is essential to help interpret the parties’ positions.  It also helps identify when the parties are seeking to manipulate you.  Finally, it is critical to ensure that all parties are taking account of all factors in determining whether to settle and, if so, on what terms.

Celebrate impasse – I never allow the parties to walk out when there is an apparent impasse and instead insist that they celebrate this as a significant step which most mediations have to go through before settlement can be achieved.

In fact, experience has taught me that a settlement without an impasse is not a good settlement.  The significance is that all parties want to go home satisfied that they negotiated well and could not have squeezed more out of the other party/ies.  Impasse signals to both that both have negotiated well so far and have driven each other to their bottom line.  

Once that is appreciated, resistance to pay a little more or take a little less often falls away and settlement can follow surprisingly quickly and easily.

Robust reality testing - Typically experienced litigators will chose a mediator with the skill set to test their opponent’s case.  They will not want their own case tested but recognise that the right mediator will test theirs as well.

Guillotine – Agreeing a notional cut off in the early evening enables me to bring effective pressure     on the parties to start negotiating numbers far earlier, reducing the scope for bluffing and stonewalling.”

Have there been any notable changes in regulations over the last 12 months?

“The European parliament approved a directive on mediation (Directive 2008/52/EC, the “Directive”) on civil and commercial disputes which came into force in June 2008 and applies on a mandatory basis to mediations of cross-boarder disputes in the EU.

The Ministry of Justice confirmed that the Directive was only to apply to cross‑border disputes and not purely domestic mediations and that the existing arrangements in England and Wales were compliant with the requirements of Articles 4 (encouragement for the development of/adherence to codes of conduct and training for mediation), 5 (ability of the courts to invite parties to mediate) and 9 (provision of readily available information on mediators/mediation).  However, amendments to the English legal system were required to implement Articles 6 (enforceability of agreements reached through mediation), 7 (confidentiality of mediation) and 8 (ensuring that if a limitation period expires while mediation is ongoing, the parties will not be prevented from seeking a remedy through the courts or arbitration.) 

New provisions were introduced into the Civil Procedure Rules in April 2011 to comply with these requirements.  CPR 78.24 now sets out a procedure for applying for a mediation settlement enforcement order and CPR 78.26 sets out the requirements for the disclosure or inspection of documents in a mediation.Changes were also made to the Limitation Act 1980, which now provides for the limitation period to be extended where there is a time limit under the Act and where mediation of the dispute started before the time limit expired (section 332A). 

In these circumstances, the parties have the limitation period extended to eight weeks after the date on which the mediation ends.

”How has the global downturn impacted both the type and the volume of your work in your jurisdiction?

“Despite the wishful thinking and public pronouncements by some practitioners and legal journals, the threatened “tsunami” of litigation has not materialised and is unlikely to do so until the recession really bites. Based on the experience of living through two previous recessions, this one is not real as incredibly low interests rates and the palpable reluctance of the banks to put businesses that are paying anything into liquidation is keeping prices artificially high. 

Only when these conditions change will the recession really begin to bite and litigation will necessarily increase and with it so will the number of mediations.”

What are your predictions for the next 12 months regarding using mediation in your jurisdiction?

“England is still the preferred foreign law and jurisdiction chosen for the resolution of disputes by parties who do not trust the local courts of either party.  This is reflected by a huge increase in the number of cases with Russian parties being tried in the London courts or through arbitration under the LCIA rules.  This trend is likely to continue and will result in an increase in mediations in England between foreign parties.The launch by JAMS, the premier provider of mediation services in the US, of JAMS International in Europe earlier this month reflects the significant growth in ADR that is likely to occur in Europe in the foreseeable future.”

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