What happens when mediation fails?

At Trust Mediation our personal injury mediation settlement rate is about 85% so in a small number of cases mediation fails to produce a settlement. What happens then?

Before I answer that it is worth noting that although a mediation fails to produce a settlement on the day it does not mean that the time and money has been wasted. Most likely the following benefits will have been gained:

  • A significant narrowing of issues between the parties;
  • Parties have a clear understanding of the other side’s case;
  • The claimant had the chance to speak directly to the opponent – an important need for many;
  • The defendant’s assumptions about the claimant will have been confirmed and/or rebutted.

Many cases which do not settle on the day settle very shortly afterwards. Sometimes the parties just need to go away, take stock and then make a decision. For this reason I encourage parties to leave offers open at the end of an “unsuccessful” mediation to allow that time for reflection.

If it fails you have to consider:

  • Costs and the mediation fee;
  • Further conduct of the litigation.

Costs and the mediation fee

The parties are jointly and severally liable for the feewhich is payable before the mediation. When the case finally concludes does the paying party have to reimburse their share of the fee and can the receiving party recover the costs of preparing for and attending the mediation? This all depends on a) what the mediation agreement said and b) what subsequent agreement or order concluded the case.

It is therefore very important to check what the mediation agreement says about costs and the fees and be aware of this when concluding settlement. For further information read the excellent article Mediation – a costs trap for the unwary by my colleague Tim Wallis.

Further conduct of the litigation

Mediation is confidential and without prejudice. This means that nothing that was said during the mediation, no offers or concessions that were made can be referred to in the subsequent litigation. It is of course possible that agreement was reached say on contributory negligence. Such agreements will be binding provided they were recorded in writing.

I always offer to stay in touch with parties after a mediation to offer further assistance that might help the parties find a solution.

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