Alternative Dispute Resolution

Introduction

Psychology

Principled negotiation

Mediation

Barrister Assisted Mediation

Early Neutral Evaluation

Chancery FDR

Guided Settlement

Conclusion

To arrange an initial fixed fee meeting please telephone the Clerks at 1 Essex Court on 0207 936 3030, or email your enquiry to clerks@1ec.co.uk.

Alternatively, to enquire about instructing me directly please send an email to carl@ihtbar.com.

I am a registered public access Barrister and can be instructed directly by a member of the public without the involvement of a solicitor. I belong to the South Eastern Circuit (which includes London), and am a SCMA accredited mediation advocate (www.mediationadvocates.org.uk), having acquired actual mediation advocacy experience in settling contentious probate disputes.

Introduction

‘…[Trial] is, and probably always has been, the method of resolution of only a tiny minority of chancery disputes. The settlement rate of cases issued in the Chancery Division in London during the last 5 years ranged between 92.3% and 94.4%, and that excludes settlements taking place after the start of the trial. Traditionally, most disputes have been resolved by unstructured negotiations between the parties or their lawyers, a process involving no management or intervention by the court, save acceding to the last minute request to delay the commencement of a trial while the parties frantically conclude settlement negotiations at the court door… The standard form of chancery case management directions…contains an optional provision for a one month stay for “the parties to try to settle the disputes by alternative dispute resolution or other means.” The extent to which oral encouragement is given to the parties, at CMC’s or otherwise by the Chancery judges, is left to individual preference and discretion. No national policy, guidance or training in that regard has been attempted. That said (and as has been pointed out during consultation) the very high settlement rate in the Chancery Division is by no means unsatisfactory, and may fairly be said to reflect the fact that case management by Masters and District Judges along current lines has been a substantial contributor to resolution of disputes otherwise than by trial.’ Lord Justice Briggs in the ‘Chancery Modernisation Review: Final Report’, December 2013.

Psychology

‘People often think that establishing objective facts will resolve the dispute… yet in each situation, the key to the dispute is not objective truth but what is going on in the heads of the parties. Objective reality is unlikely either to be the cause of the problem or the source of a solution. Experience suggests that the two most helpful qualities in dealing well with differences are an ability to be persuasive and an ability to revise our own thinking in the light of fresh insights. More data – more facts and figures – merely contribute to our ability to be persuasive or to see a problem in a new way. They are not ends in themselves. To be persuasive, we need to understand how others see the world, their motivations, emotions, and aspirations. To see a problem in a new light, we need to analyze it from perspectives other than our own. In each case, our power depends on our ability to put ourselves in other people’s shoes and to see the world from their point of view. We often handle conflict poorly because we are each prisoners of our own thinking. We tend to judge differences, particularly when we think we know best. Understanding differences is hard work. Frequently we do not know how to go about it…Coping with conflict means coping with the way people think and feel. In any conflict people think and feel differently from one another, and the issue is not whose perceptions are ‘true’ and whose are ‘false’…The better we understand the way people see things, the better we will be able to change them. There is no magic formula for acquiring understanding. It takes a little time and effort.’ (‘Beyond Machiavelli – Tools For Coping With Conflict’, by Roger Fisher, Elizabeth Kopelman, and Andrew Kupfer Schneider

Principled negotiation

‘The basic problem in a negotiation lies not in conflicting positions, but in the conflict between each side’s needs, desires, concerns, and fears…which are interests. Interests motivate people; they are the silent movers behind the hubbub of positions. Your position is something you have decided upon. Your interests are what caused you to so decide…for every interest there usually exist several possible positions that could satisfy it. All too often people simply adopt the most obvious position… When you do look behind opposed positions for the motivating interests, you can often find an alternative position which meets not only your interests but theirs as well. Reconciling interests rather than compromising between positions also works because behind opposed positions lie many more interests than conflicting ones…a close examination of the underlying interests will reveal the existence of many more interests that are shared or compatible than ones that are opposed…How do you go about understanding the interests involved in a negotiation, remembering that figuring out their interests will be at least as important as figuring out yours. One basic technique is to put yourself in their shoes and ask yourself ‘Why?’If you do, make clear that you are asking not for justification of this position, but for an understanding of the needs, hopes, fears, or desires that it serves… Ask ‘Why not?’ Think about their choice. One of the most useful ways to uncover interests is first to identify the basic decision that those on the other side probably see you asking them for, and then to ask yourself why they have not made that decision. What interests of theirs stand in the way? If you are trying to change their minds, the starting point is to figure out where their minds are now.’ (‘Getting To Yes’ by Roger Fisher and William Ury).

‘Even if you disagree with the other person’s stance on an issue, you can acknowledge their reasons for seeing the world as they do. They might be motivated by strong feelings, a passionate belief, or a persuasive argument. Consider the situation Roger Fisher experienced whilst representing the Federal Government in front of the U.S. Supreme Court. He stood to make his arguments against the petitioner. Stepping forward he said, “The petitioner has a strong case. In fact I think it is stronger than the one made by counsel here this morning. If I had been arguing for the petitioner, I would have added the following point…”

“Mr Fisher!” Justice Frankfurter interrupted. “You are here for the Government!”

“Yes, Your Honor” Roger said. “And I want the Court to understand that we have an answer not only to the arguments that the petitioner has made but also to another good argument that I think the petitioner could make. Either way their case is not trivial or far-fetched. We believe this court was right to grant review and to consider this case on its merits as we in the government have. Despite the strength of their case, we have concluded that the law is against them for reasons that I will now present…”

Roger believed that by honestly expressing his appreciation for the merits of his opponent’s case, he was a more effective advocate for the Government than if he had squared off, contending that the petitioner’s arguments were absurd and should be dismissed out of hand. Having demonstrated a thorough understanding of the other side’s case – and directly answering it – his argument was likely to be more effective than if he simply avoided their contention and made an argument of his own. The Government won the case…Finding merit in another’s reasoning requires that you actually do see merit in it. Sincerity is crucial. It is your honest valuing of another’s perspective that makes them feel appreciated. You want to express that you understand the basis for why they feel, think, or act the way they do. While you may struggle to find value in what they say or do, look hard and imagine what their emotional experience is like, considering what concerns may be motivating their emotions. When you strongly disagree with others, try acting like a mediator. The hardest time to find merit in another’s point of view is when you are arguing about an issue that may be personally important. Listening for merit in another’s point of view can transform the way you listen… The third element of expressing appreciation is to demonstrate your understanding of the merit you have found. Once you understand their perspective and find merit, let them know…What is important is that the person’s thoughts, feelings, or actions are recognised and acknowledged…Reflect back what you hear…Others are likely to feel unheard unless you demonstrate to them that you do in fact understand what it is that they believe is important.’ (‘Building Agreement’, by Roger Fisher and Daniel Shapiro).

Mediation

The keys to success in mediation are not what lawyers argue, but identification by each party of their BATNA (best alternative to a negotiated agreement), which is a practical tool for risk management, and doing a deal measured against it. This requires preparation and planning by each party’s mediation advocate. Strategy is the outcome. ‘A collaborative strategy assumes that the parties can work together to reach an agreement that meets the needs of both and is objectively fair. The process involves exploring the parties’ underlying interests, sharing information and being creative in the options considered. The agreement will not necessarily focus on the original issues between the parties but will try to identify options for mutual gain. The strategy involves more than co-operation – it is based on mutual effort and requires advance analysis and planning.

Within the term ‘collaborative’ different strands may be identified:

  • a ‘principled’ strategy tries to achieve an outcome that is objectively fair against some external authoritative norm; and
  • a ‘problem-solving’ strategy focuses on both parties’ real needs and interests, and tries to get a practical solution without building costs.’ (‘A Practical Approach to Alternative Dispute Resolution’, by Susan Blake, Julie Browne & Stuart Sime).

The characteristic approach is:

  1. working together is stressed at the start of the negotiation, and this approach is sustained throughout. A mediation advocate may for example open by saying,Thank you for meeting with us today.I will be corrected if I am wrong, but what I think you say about the facts and the law is …It is not my job to persuade you that your arguments will not succeed at trial.As you know we say that we will succeed.I am not interested in having an argument with you about whose view is right.I suggest that litigation is not going to be a great outcome for either you or my client. The risks are…I am here because I believe that we can reach a principled and fair deal that is not only good for my client but also better for you.I hope that you will work with me to achieve this today;
  2. each issue is approached constructively, focussing on the best possible outcome for both parties;
  3. issues are likely to be approached from the point of view of needs, interests and options, rather than fault and blame;
  4. both sides work to maintain an open and reasonable atmosphere; and
  5. the mediation advocates are likely to emphasise objectivity, and a potential settlement is often judged against agreed criteria to test fairness.

‘In addition to planning potential demands and concessions in relation to individual issues, it is vital to be able to put any personal settlement into an overall context, so that you will be in a position to judge whether a particular overall set of terms should or should not be accepted. This requires comparing whatever overall deal you are able to achieve in a negotiation with the best realistic alternative there would be if no settlement were reached. This involves identifying the best alternative to a negotiated agreement (‘BATNA’). If the deal you have negotiated is at least as good as your BATNA then it should potentially be accepted. If it is worse then you should probably walk away.’ (‘A Practical Approach to Alternative Dispute Resolution’, by Susan Blake, Julie Browne & Stuart Sime).

For a legal negotiation the alternative to settlement will be going to court, so the BATNA is what the client is realistically likely to get if he were to go to court.

Barrister Assisted Mediation

I innovated this technique in January 2014, and the following extract is from my new book the ‘Contentious Probate Handbook’. This method of mediation could also take the form of a co-mediation.

“Where a mediator does not have an adequate technical knowledge of the legal issues underpinning a contentious probate dispute, an independent barrister is jointly appointed by the parties as a consultant to help the mediator understand the facts, evidence, technical issues in dispute and applicable legal principles. Prior to the mediation day the barrister can also provide each party with a preliminary:

(i)       analysis of legal merits;

(ii)      commercial analysis;

(iii)     litigation risk analysis; and

(iv)     proposed settlement methodology (i.e. a mathematical equation).

The aim ahead of the mediation day is to create a framework for negotiations, to move the parties away from a positional to a legally principled and commercially rational mindset, leading to traction within the first two hours of the mediation day and the making and discussion of settlement proposals by each party through the mediator before lunch.

Alternatively the barrister could provide these documents to the mediator for discussion in confidence with him in a pre-meeting to assist the mediator to develop bespoke mediation strategies in advance of the mediation day.

This would of course require the disclosure by each party to the barrister and mediator of a bundle (which could be limited to one lever arch file of indexed documents) at least two weeks before the mediation day.

The barrister is instructed directly by each party, does not have a contract with the mediator, and signs the mediation agreement. Each party will be represented by their own mediation advocate throughout the mediation day. The barrister (whose duty is to assist the mediator) can with the permission of the mediator also be consulted to provide his preliminary opinion (without legal liability) about legal issues. In which case the contract with the barrister will contain an indemnity.

To help the parties develop a road-map for settlement, if the contract with the barrister and mediation agreement include a provision requiring terms of settlement to contain a clause obliging the parties to keep negotiations confidential following agreement, then a barrister is set free to think outside the box and make creative proposals (for communication through the mediator).  Instead of preparing position statements, each party with the assistance of the barrister can prepare (in modular Scott Schedule format) a side by side analysis of the facts, issues, and governing legal principles, for exchange together with a bundle of documents (also to be provided to the mediator) in advance of the mediation day.

The author’s theory is that on the mediation day each party will then (depending upon preparation and trust), be equipped to move swiftly (i.e. in the first 2 hours) from a fixed starting point, and be open to working with each other through the mediator (and his assisting barrister), to develop a practical and fair settlement using bespoke methodologies suggested by or jointly developed through the mediator with the assistance of the barrister.

Following a 5 to 10 minute open plenary and house-keeping session, in which only the mediator speaks, each party can then head off to their own respective rooms to be visited by the mediator and barrister, to discuss and explore their strategic interests positions and reasons, in privacy and confidence.

The objective of ‘Barrister assisted mediation’, is to kick-start a road mapping process in the morning, that can result in the making of proposals through the mediator, leading to an agreed formula for settlement in the afternoon.  Even if an overall settlement is not achieved before 5.30pm, because the process is likely to result in greater clarity and focus, this method is likely to reduce the issues in dispute and create a road-map leading to an agreed formula for settlement on another day.

It also sets the mediator free from the outset to make the maximum use of his skills in the time available in the morning, to explore with each party their respective underlying interests values and positions, with the aim of agreement being reached in the afternoon.”

Early Neutral Evaluation (‘ENE’)

In relation to judicial ENE, the Chancery Guide 2016 (published 17 February 2016) confirms that in appropriate cases and with the agreement of all parties the court will provide a non-binding, early neutral evaluation (ENE) of a dispute or of particular issues (see CPR rule 3.1(2)(m)).

‘18.7 ENE is a simple concept which involves an independent party, with relevant expertise, expressing an opinion about a dispute or an element of it. It is unlike mediation because a mediator acts primarily as a facilitator. Although the mediator may undertake some ‘reality testing’, there is no requirement to do so. The person undertaking ENE provides an opinion based on the information provided by the parties and may do so without receiving oral submissions if that is what they wish.

18.8 An essential feature of ENE, apart from being consensual, is that unless the parties agree otherwise, the opinion is non-binding and the process is without prejudice (it being treated as part of a negotiation between the parties).

18.9 ENE is offered in the Chancery Division by all judges. The judge providing the ENE may be a full time Chancery judge, a section 9 judge, Chancery Master or Registrar. The ENE may be conducted by a judge of the same level as would be allocated to hear the trial, but need not be if the parties agree otherwise.

18.10 There is no one case type which is suitable for ENE. In many cases mediation will remain the preferred form of ADR. Although ENE may be unsuitable for multi-faceted complex claims, if a particular issue lies at the heart of the claim an opinion could help unlock the dispute in a way which a mediator cannot. It is particularly suitable where the claim turns on an issue of construction, an issue of law where there are conflicting authorities or where the case involves the court forming an impression about infringement of intellectual property (“IP”) rights.

18.11 The Chancery Division does not have set procedures for ENE. The judge who is to conduct the ENE will give such directions for its preparation and conduct as he considers appropriate. The parties may consider that the judge will be in a position to provide an opinion about the claim or an issue based solely upon written position papers provided by the parties and a bundle of core documents. In many cases, however, it will be preferable for there to be, in addition, a short hearing of up to half a day. The opinion of the judge will be delivered informally.

18.12 Two important points which need to be addressed are as follows:
(a) The norm is that the ENE procedure and the documents, submissions or evidence produced in relation to the ENE are to be without prejudice. However the parties can agree that the whole or part of those items are not without prejudice and can be referred to at any subsequent trial or hearing.
(b) The norm is that the judge’s evaluation after the ENE process will not be binding on the parties. However the parties can agree that it will be binding in certain circumstances (e.g. if not disputed within a period) or temporarily binding subject to a final decision in arbitration, litigation or final agreement.
18.13 Assuming the ENE is without prejudice and not binding, the court will not retain on the court file any of the papers lodged for the ENE or a record of the judge’s opinion.

18.14 In any event the judge will have no further involvement with the claim, either for the purpose of the hearing of applications or as the judge at trial, unless both parties agree otherwise.’

A specimen draft order directing ENE is set out in paragraph 18.15.

Chancery FDR

Paragraphs 18.16-18.18 of the Chancery Guide 2016 outline ‘Chancery FDR’ which is, ‘a form of ADR in which the judge facilitates negotiations and may provide the parties with an opinion about the claim or elements of it.’

Paragraph 18.17 states that the key elements of Chancery FDR are:

• It is consensual. The court will not direct Ch FDR unless all the parties agree to it.
• There will be a Ch FDR ‘hearing’, although it is quite unlike any other type of hearing. It is better described as a meeting in which the judge plays the role of both facilitator and evaluator.
• Ch FDR is non-binding and without-prejudice. The court will try to lead the parties to agree terms but cannot make a determination.
• It is essential for the parties, or senior representatives in the case of corporate parties, to be present.
• The court will carefully set up the Ch FDR meeting by giving directions which will help it be a success. This may include directing the parties to exchange and file without prejudice position papers (and direct what is to be addressed) and to lodge a bundle. If there is an issue which can only be resolved with expert evidence a way may be found to obtain that evidence without commissioning CPR compliant reports.
• When the meeting takes place the parties are directed to attend before the meeting starts so they may hold initial discussions. The parties are then called in before the judge. The Ch FDR meeting is a dynamic process which has some similarities with an initial mediation meeting. If the parties request it the judge may express an opinion about the issue or the claim as a whole.
• The court will not retain any papers produced for the meeting or any notes of it.
• The judge who conducts the Ch FDR meeting has no further involvement with the case if an agreement is not reached.

There is no one type of case which is suitable for Ch FDR. The origins of FDR lie in money claims in Family cases. It has been widely used in claims under the Trusts of Land and Appointment of Trustees Act 1996, inheritance and partnership claims. It is likely to have most application to claims in which there is strong animosity and/or a breakdown of personal or business relationships and trust disputes. In principle Chancery FDR is now available in any contentious probate claim. It can also be bolted on to the method of ‘Guided Settlement’ I innovated last year (published in my article ‘The Advocate and the Expert in a Testamentary Capacity Claim’) to which there is a link at the top of this page.

As current room hire rates in the Rolls Building are:

£100 for a small room (i.e. to accommodate 6 people);
£150 for a medium sized room (i.e. to accommodate 12 people); and
£200 for a large room (i.e. for a plenary session),

depending upon the court fee (which at the time of writing is not known) this may become a cost-effective alternative to conventional mediation, which enables a hybrid form of ADR to take place involving a judge, at the Rolls Building, or outside London in a Chancery District Registry.

Guided Settlement

I innovated this technique in April 2015, and the following extract is from my new book the ‘Contentious Probate Handbook’. I am currently researching and writing a new article for publication later this year entitled, ‘Mediation of Trade Disputes’, which will discuss the use of this method in the settlement of a trade dispute, and the corresponding dispute resolution provisions to include in a trade agreement.

“Another ADR method, recently innovated by the author, is ‘Guided Settlement’. This process has its roots in both ENE and mediation, but is neither because the settlement ‘Guide’ (e.g. a neutral Barrister TEP jointly appointed by the parties in a contentious probate, trust, or Inheritance Act claim) neither:

(i)       determines any issues; nor

(ii)      acts as an evaluative mediator.

The role of the Guide (as a technically proficient specialist practitioner and creative commercial problem solver) is to:

(i)       analyse the legal merits of the claim and inherent litigation risks;

(ii)      design a commercial settlement methodology; and

(iii)      help the parties to communicate, so that they can use the methodology (with crunched figures based upon independent asset valuations) as a framework to explore and construct overall terms of settlement.

Throughout the process the Guide thinks freely (including outside the box) and generates creative solutions, i.e. acts as a neutral creative problem solver who has no partisan loyalties or personal stake in the dispute.

In e.g. a probate dispute, the basic procedural steps are as follows:

(i)       the parties (through their solicitors) obtain and jointly pay for an inventory and valuation of the estate assets, i.e. to determine the size of the estate pie (Valuations’);

(ii)      the solicitors acting for each party take instructions from their respective clients about their own commercial needs preferences and priorities (a ‘Commercial analysis’);

(iii)      instead of appointing a mediator the parties jointly appoint a Barrister TEP to act as a settlement ‘Guide’, who:

(a)      undertakes a fixed fee preliminary evaluation of the legal merits of the claim, litigation risks, and costs, and sets out his conclusions in the form of a grid/schedule, i.e. a legal risk analysis (‘LRA’); and

(b)      develops a commercial / arithmetical (i.e. number crunched) methodology for settling the dispute based upon the:

–         Valuations;

–         Commercial Analysis provided by each party’s solicitor; and

–         LRA,

(the ‘Settlement Framework’), which is circulated by e-mail amongst the parties before they meet to settle the claim.

(iv)     In a fixed-fee meeting (e.g. of up to one day), the parties’ solicitors, with or without their clients in attendance, and with full authority to settle or access to instructions over the telephone, meet with the Guide to explore and construct overall terms of settlement. The meetings take place in separate rooms in a neutral venue, e.g. at the Barrister’s Chambers.

(v)      Using the Settlement Framework, the Guide works with each party to jointly generate settlement proposals to:

(a)      reduce the issues in dispute (i.e. remove them from the claim equation); and

(b)      create momentum, leading to an overall deal.

Like mediation this may require more than one meeting.

(vi)     Unlike a mediator, the Guide uses his technical knowledge of the legal issues in dispute and problem-solving skills to create inventive settlement proposals for which neither side will lose face if rejected, i.e. because they are the Barrister’s ideas, and if agreed, can be claimed and owned as the product of a joint commercial collaboration between the parties.

Where Guided Settlement is entered into following the instruction of experts, the steps would need to be modified to enable the Guide to receive expert reports before developing a Methodology. If experts have not been appointed, the parties could agree upon the appointment of a single joint-expert to assist the Guide.”

Conclusion

I had the great privilege of meeting with the late Professor Roger Fisher for two hours in his study at Harvard Law School during an academic visit from King’s College London in 2002, and his parting advice was,

‘Appreciate their point of view:

  • understand it – it’s very important to appreciate the way they see it,
  • even if you don’t agree, say that it merits serious consideration, don’t say that they are wrong.

Appreciate their self-esteem.

Acknowledge that the other person has been heard.

Be prepared to argue their case better than they can before you answer it.’

These remarks by the late Professor Fisher serve to demonstrate that the recipe for success in resolving a dispute is a mixture of:

  1. technical mastery of the facts, law, and procedure obtained through granular forensic analysis and case preparation; and
  2. human psychology, in order to persuade.

The art of persuasion is the metier of the advocate, who throughout the litigation process must keep one eye on a diplomatic solution achieved through negotiation. In the end most cases settle, and the ability of a practitioner to develop and patiently achieve a practical consensus upon terms of settlement is only limited by his imagination, instructions, and authority.