Mediation of Probate & Trust Disputes.

Why negotiate?

Mediation involves facilitated negotiation and is about doing a deal’.  That means you have to decide the ‘price of doing a deal’. Each participant’s decision will be influenced by their analysis of litigation risks and irrecoverable costs.

There is always an unquantifiable element of risk in litigation. This may include an unpredictable judge who is not interested in the merits of legally robust argument, and instead adopts a pragmatic and subjective approach. It is also rare, even during or at the end of a trial, to have evidential certainty and all the information you wanted available. Parties develop their cases as they fight them in court, and so the goal posts can move. As the Court of Appeal recently held in Ali v. Dinc [2022], a judge can decide a case on grounds that have not even been pleaded. Contentious Probate and Trust cases are particularly high risk because they are notoriously fact-sensitive. It is not uncommon for litigation costs to exceed the value of an estate, and following a Trial, the winner will not usually recover all of their costs, and the loser may end up being in negative equity. If the dispute includes a claim for financial provision, there is also a risk that a judge will make an award under the Inheritance Act that includes an element of a CFA success fee. Therefore, the sooner parties enter into Mediation, the lower the potential success fee is likely to be, see:

The cut and thrust world of Contentious Probate and Trust litigation has very little to do with abstract notions of justice, and is actually more about perceptions and calculation. So, unless you need a court determination to move forward, e.g. as to whether a trust is valid or void, or the court must be involved, i.e. because the case involves children or other vulnerable beneficiaries, then why not do a deal instead?

In my experience, there is nearly always a deal to be done.

Paradoxically, while a claimant may have gone to court or threatened to issue proceedings because they are being ignored or stonewalled, the voices in the court room are not those of the parties, but of lawyers and judges who have no actual skin in the game. Consequently, how participants speak to each other in Mediation, either directly, or through their legal representatives or the Mediator, is an opportunity to show respect by allowing the other to be heard. That can move the parties along from deadlock about their respective positions to doing a deal in their mutual interests. The skill of allowing a participant in mediation their voice, i.e., the right to be heard, is linked to both ‘how you talk’, and to ’empathetic listening’, because to switch the dynamic from confrontation to collaboration, you must first show that person that:

(a)     they have been heard; and

(b)     you understand their position and the underlying reasons.

The unifying factor in all probate and trust disputes is the composition of the estate/ trust asset pool, and its value. It is not uncommon for litigation costs to exceed the value of an estate. Therefore, the earlier parties in dispute become participants in a process of negotiation, the more likely it is, that each will receive a slice of a larger pie (i.e., of the estate/trust fund), if the dispute settles at or shortly after Mediation.

The overwhelming majority of Contentious Probate and Trust disputes never reach Trial, because parties agree the structure and terms of a legally robust compromise. Between 92.3 – 94.4% settle, see paragraph 1.3 of my Book, the ‘Contentious Probate Handbook’.

Mediation may also be an opportunity to transform an acrimonious probate/trust dispute into a joint-problem solving exercise, by applying estate planning principles to discover and unlock tax-efficiency post-death, resulting in the enlargement of the estate/trust fund pie for settlement. See: Mediation and tax-efficient settlement of probate disputes | Taxation (and to request a PDF copy of my article please send an email to carl@ihtbar.com).

See also:

Expert Mediation 

As a Mediator, I am developing a new model of Co-Mediation for Probate, Trust (including International Trust and Breach of Fiduciary Duty), Tax, Islamic Finance, and Art disputes, which I call ‘Expert Mediation’.

This form of Mediation is appropriate where one or more of the parties has taken an entrenched view of an issue in dispute, or of the case as a whole, and would benefit from an assessment of the particular issue, or case, by an independent expert/specialist practitioner, e.g. a,

  • Barrister TEP (in a Probate/Trust dispute);
  • NHS Consultant in old age psychiatry (in a Testamentary Capacity claim);
  • Chartered Tax Advisor (in a Tax dispute);
  • Sharia Scholar (in an Islamic Finance dispute); or
  • an Art Historian (in an Art authentication and valuation dispute).

The Co-Mediation process involves:

(i) Adjudicative evaluation by one Co-Mediator (‘A’) with the conclusion about merits being communicated before the start of the Mediation day to: (i) the other Co-Mediator (‘B’), and to each Participant separately (i.e., about the legal and procedural merits of their own case but not that of their opponent).

(ii) Facilitative Mediation on the Mediation day being led by Co-Mediator B, with Co-Mediator A being available for consultation by Co-Mediator B and each participant in private sessions.

Therefore, the legal and procedural evaluation of each Participant’s case (including litigation and costs risks), is not communicated to their opponent.

Mediation Advocacy mindset

Mediation is likely to fail unless both sides are sufficiently prepared about the expectations of the other.

An effective Mediation Advocate needs to put the client’s interest first and to match the negotiating strategy to the objective by:

  • keeping an open mind;
  • forming an understanding of the process;
  • learning about the procedure;
  • being prepared in all aspects of his/her client’s case;
  • understanding that the legal framework of the dispute may be only one aspect of the parties’ interests;
  • being receptive to solutions which are outside the legal framework of the dispute;
  • thinking outside the box (i.e. using contrarian logic and by counterintuitive behaviour); and
  • using the Mediator as a tool with which to obtain a benefit for his/her client, rather than seeing him/her as an obstacle.

‘A lawyer who concentrates on legal questions may miss entirely the important commercial interest, not only of his client, but those of the other side that might prompt an advantageous settlement. Equally dangerous is the lawyer who is too sure of himself. He neglects relevant information. He ridicules good suggestions because they have been made by the other side or by the Mediator. He may consider that his client has already invested too much time and money in the conflict to settle in mediation; or he may have given bullish advice before and be fearful of challenging his own client in a private session to re-adjust the unrealistic expectations held by the client which are likely to be exposed in the process as it continues.’
(Professor Andrew Goodman, Bar Council ADR Committee Mediation Advocacy Training Day, 25 May 2013).

To settle at mediation parties in dispute must compromise. To maximise the opportunity for settlement on mutually satisfactory terms, instead of preparing to go to war (i.e. Trial), each party and their Mediation Advocate (i.e. legal representative) must prepare to do a deal. As I explain in paragraph 12.2 of my book the ‘Contentious Trusts Handbook’ published by the Law Society in 2020, ‘The acme of preparation is development of a “settlement range” based upon:

(a)             a realistic legal risk analysis; and

(b)             an accurate commercial analysis,

so that a concrete opening proposal can be made either to your opponent directly, or through the mediator. This requires a white-board/flip-chart for sketching out the parties respective expectations in order to plot and discover your Client’s potential “settlement range” between:

(a)    the maximum net capital value of his claim; and

(b)    his BATNA (‘best alternative to a negotiated agreement’ – which in litigation is proceeding to trial, i.e. the amount below which he will walk away from the table).’

This methodology rests on the observation that it is always better psychologically to be prepared to advance to a known position than to retreat into the unknown.

A good deal has to provide benefits that satisfy each party’s needs. Without that aspiration, why would any party negotiate. Without assurance of benefit why would anyone sign up to a deal?