Continuing economic challenges are giving rise to more disputes than ever. Local authorities are commonly coming across parties from every industry anxious to get as much out of a claim as they can, or trying to get out of a claim as quickly as they can. How those disputes are resourced and managed has had to change to match the times. Endless, expensive litigations were never attractive and even less so now. Even disputes which have not reached the courts can take up significant amounts of employee and/or management time - something every local authority could do without.
No wonder then, that options such as mediation are increasingly popular. Most local authorities are familiar with the process of mediation: a facilitated negotiation with an impartial third party mediating between or among two or more parties, over 1 or 2 days. Everything is entirely confidential and no one is obliged to reach a settlement agreement; but surprisingly often parties do. So what should the public sector in particular be aware of, if considering entering into mediations?
The key advantages for local authorities are:
| the entire proceedings are carried out in private and on a confidential basis. Local authorities do not have to fear unwanted publicity over the juicy details of a dispute; | |
| the public sector has obligations of accountability and mediation is an increasingly acceptable method of dispute resolution. Mediation can be a half-way house between mere negotiations (which can give rise to questions around accountability of how sums in the public purse were handled) and more formal dispute resolution proceedings (which can cost more to the same public purse with no guarantee of the outcome); | |
| the relatively low costs and high speed of mediation can make it a very cost effective method of resolving a claim. Mediations can be arranged very quickly (although they need thorough preparation). They can be carried out with or without lawyers and can be held more than once. It is now typical for mediations to be carried out at lawyers' office, so the costs of hiring a "netural" venue are often not needed; and | |
| the role of the mediator puts a certain amount of distance between the parties, which can assist the process and facilitate the reaching of an agreement. That said, the mediator is not there to make a judgement and any decision on if / how to settle the matter will be for each party to make. |
Points for local authorities to be aware of are:
| having authority to reach a settlement in mediation is very important. A mediator will check early on that attendees have this. Local authorities will have to make sure that advance authority from the appropriate board or committee is in place. Usually this is done by giving authority for settlement within a band of figures (or authorising particular non-monetary decisions). You should also have a plan for how to seek changes to that authority if negotiations move outwith that band during the mediation; | |
| mediators' fees can be expensive. If your own lawyers are involved there will also be their costs for preparation and attendance time. Overall the costs for just one or two days the costs can seem high, however this will still be much cheaper than litigation or other dispute proceedings; and | |
| the confidential nature of the mediation should always be remembered. Those who take part in the mediation will have to sign a mediation agreement preventing them from repeating or relying on anything said or written down in the mediation. Where a settlement agreement is reached the terms of which this often be confidential as well. |
Parties often find mediation well worthwhile – whether a resolution is reached, or they simply learn more about the other side's position. Preparation and flexibility are the key to success.
