Posted on 6th May 2021 by Chris Makin

There really is an alternative

Blood is thicker than water, and a happy family is a wonderful power for good.  Those contemplating legacies to their loved ones will still have rosy memories of the baby twins, the nephews and nieces when young, of dangling a new-born on the knee…wonderful!

But when the family falls out, blood curdles and that power for good is just as strong in tearing families apart.

A recent headline in the Daily Telegraph reads: “Rags-to-riches royals at war over £1bn inheritance.”  The story is about the paternity of two children born of a surrogate mother, and one goes on to say: “At first I tried to work something out together with my brother but it didn’t work out so I took it to the courts and now they will have to decide.”

It seems to me that a hugely important step in the proceedings has been overlooked.  A discussion with a brother breaks down, so now the courts will have to decide?  Is there no alternative?  Of course there is: Alternative Dispute Resolution, ADR, most commonly mediation.

It is hardly for me, a chartered accountant and mediator, to preach to probate lawyers the importance of mediation in civil proceedings.  All litigation lawyers now know only too well the risk of costs sanctions for unreasonably refusing to mediate, from Dyson LJ’s checklist in Halsey –v- Milton Keynes General NHS Trust [2004] EWCA Civ 576, yet there is still a reticence to mediate, especially in the lower courts.

But now it’s getting serious.

Some real life examples

I could talk all day about the fascinating cases I have helped to settle by mediation; in private, cheaply, and amicably.  With identifying features removed, these two will suffice:

  • A brother and sister were arguing over mother’s will.  Sister had married at 18, never to return home.  Brother had nursed his mother during her last illness, but had then gone off the rails, gone to live in Thailand, became a junky and cavorted with young girls (this wasn’t Gary Glitter, since you ask!).  So the siblings despised each other. 

It emerged in private discussion that sister had put all their mother’s furniture in storage and didn’t care about it, whereas brother yearned to own the family grandfather clock: he had wound it every night when going to bed after making his mother’s supper. 

Sister was persuaded to give up any claim to the clock, the brother was delighted, all the bile in the relationship melted away, and a settlement was quickly reached.  Amazing!

  • The second wife of the deceased had been in property development with him.  When the marriage ended, the property was divided; but because the wife took a home worth well over a million pounds, to equalise the division she had to give a charge on it to her ex-husband.  That charge led to a dispute which rumbled on for 22 years.

In the meantime, the deceased had married a third and then a fourth time (do keep up!).  His ultimate widow now had the benefit of the charge, and wished to execute it by forcing the second wife out of her home.  She couldn’t afford to live there anyway; she was trying to arrange an equity release scheme, but that wasn’t possible because this charge forbade any inferior charges.  So both parties were stuck.

The matter in dispute was that the deceased had executed a codicil to his will, a few days before death, excusing wife number two from the charge.  Not only did this make a mess of some highly effective IHT planning, but of course wife 2 contested it on non compos mentis and undue influence grounds.  The case was a mess; if it had gone to court, the outcome was quite unpredictable, except for costs, which would have been huge.

At the mediation we were able to arrange for wife 2 to pay a modest sum to wife 4 to release the charge, and wife 2 was able to have her equity release.  Thus both parties’ true needs were met, at a cost of perhaps £3,000 compared with £300,000 (each side!) for a High Court action.

These brief examples show that mediation can achieve much more than court action: speed, certainty, modest cost, and a meeting of the true needs of the parties.

So why should we mediate?

  • Because the era of clients with high principles and deep pockets is over.
  • Because judges will urge you to: CPR 1.4(2) requires the Court to actively manage cases, including (e) encouraging and facilitating ADR.
  • Because it is a relatively quick, relatively cheap way of resolving disputes, totally confidential, where the parties are in charge, and where their legal rights are unaffected should mediation fail.
  • Because per Halsey, the onus is on the party refusing to mediate to justify to the costs judge why that refusal was reasonable.  Adverse costs orders can be very expensive!
  • Because it achieves finality; a bird in the hand is worth…
  • Because litigation destroys family relationships, whereas mediation could rebuild them.

When should mediation be proposed?

 “The trick in many cases is to identify the happy medium: the point when the detail of the claim and the response are known to both sides, but before the costs that have been incurred in reaching that state are so great that a settlement is no longer possible.” Nigel Witham Ltd –v- Smith & Isaacs [2008] EWHC 12 (TCC).

But why should I be the one to invite mediation?

  • Because it is not a sign of weakness.
  • Because it is a useful tactic to prevent an adverse costs order.
  • Because in 70%+ of cases it results in settlement, even between unwilling parties.
  • Because the parties can agree solutions which a court could never impose.

So where do I find a good mediator?

  • Your own past experience.
  • Recommendations of colleagues.
  • My website at www.chrismakin.co.uk.

It is clear that I am an enthusiast for mediation, but perhaps the response of clients who have experienced it may be a more valid test.  So let me quote from the evaluation form completed by a party at the end of one of my recent mediations:

“All disputes should if possible be settled this way – Great Mediator!”

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