Anthony Gold Solicitors , 22 DEC 2017

Mediation: a better route to a good settlement?

Caroline Bowden

Consultant & mediator

Mediation: a better route to a good settlement?

This article originally appeared in New Law Journal, the leading weekly legal magazine.

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The Family Mediation Council (FMC) decided at the beginning of 2017 to put out three questions for consultation:
  • Would the role of a mediator as an impartial third party in mediation be jeopardised by that mediator drafting a consent order, once a mediated agreement has been reached?
  • Is it possible to draft a consent order without giving advice on its terms?
  • Is it appropriate to draft a consent order without giving parties advice on its terms?
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At the end of the year, they reported on the rather obvious conclusion that the consultation ‘did not produce a definite answer’. So in 2018 the FMC is going to consult further and wider. This step perhaps reveals a reluctance to grasp the nettle, which is a shame, as the need for the profession to raise its game is overdue. The reason why is set out in my responses to the three questions below.

My answer to the first question is ‘no’. The mediator’s role would not be jeopardised, since they act purely as a draftsperson. This is an existing role, as they set out the final proposals anyway, in a document called the Memorandum of Understanding (MOU).

My answer to the second and third questions is ‘yes’. It is both possible and appropriate to draft consent orders without giving advice. It is the parties’ arrangements that the mediator is committing to print. It is still at the proposals stage and not a binding arrangement that the mediator is creating or endorsing. Drafting a greater level of detail (which is really only what this is) does not trigger any advisory role and does not deny the clients the opportunity to reflect upon it and seek their own legal advice.

Beyond those points, there is further work to be carried out to make sure the clients and mediators have clarity and protection:
  • A form of words is needed on the draft or elsewhere to show that the mediator is not acting for either party as such, and has not confirmed accurate disclosure and is not acting in either client’s ‘best interests’. It would have to be clear that a settlement proposal is that of the parties’ alone and the mediator is not endorsing the merit of it, or facilitating that settlement.
  • Would it make a difference if the mediator prepared the D81 financial summary and lodged the draft at court? This may make it more difficult for the mediator to distance themselves from the settlement.
  • What if the mediator has not done an adequate enough job with the disclosure and the discussion stage leading up to the drafting of the terms of settlement?
  • Do mediators need to think more deeply about whether there are red lines: the proposals that they have mediated on but seem inherently unbalanced? At what point, and how, should mediators distance themselves from unfair terms that the clients seem intent on implementing, whilst refusing to seek their own legal advice? The mediator must therefore give the clients the fullest opportunity to obtain their own legal advice.
  • If the clients placed too much reliance on the mediator, especially one who is sending the draft to court, would this meet with the approval of the mediator’s insurers, and money laundering regulations, even with all the appropriate caveats?

Robust processes

The issue of drafting consent orders cannot properly be seen in isolation from the underlying issue that it triggers: what is good practice for drafting mediated agreements? In fact since some mediators include the consent order terms in the MOU, or as an attachment to it, the issue of drafting a standalone document, which is so vexing the FMC, is actually irrelevant. It is also not a case of whether this should happen in the future. It is happening now and there is good reason for that.

Drafting a greater level of precision and detail is a response to what clients need and want. They want secure, fair and lasting financial settlements. When proposals are just not precisely worded enough, there can be a secondary battle of wills over the details that are needed for a binding arrangement, or the whole settlement can fall apart.
Solicitors frequently complain that they have to unpick the proposals or start from scratch. Clients who choose not to use lawyers may be left in limbo, or attend court with a half-baked document that the judge has to reject.

We now all have access to the Financial Remedy Omnibus (FRO) and this can be the basic drafting template used by mediators as well as lawyers.

However, to be able to put the proposals in those terms, mediators must have led their clients through a robust and sufficiently forensic process of financial disclosure. Many mediators use the Form E, as there seems no point reinventing the wheel.

A change of mind-set may be required within the mediation community to address the obvious need to frame workable proposals with a greater level of detail and certainty. It is a matter of building up a skill set and adopting guidelines as to good practice, so that all mediators can undertake this work. As a mediation community, we cannot just draft vague proposals, get our costs paid, close our file and not care.

Solicitors are still vital

It is worth restating that it will always remain good practice in financial mediations for mediators to work in partnership with solicitors. I have often seen the stronger party try to shut the weaker party out of obtaining a robust independent opinion. That is precisely the invaluable role that solicitors have to play: to support a client who is too used to capitulating to the will of the other, and so tells the mediator that they fully agree with the arrangements suggested. It is also a false economy not to get advice, as parties may just drift or renew their disputes if the mediated agreement is not followed through with the aid of a solicitor.

However, advising solicitors should be more than just a safety-net at the end, for advising on and finalising the consent order. They should be available to assist their client throughout. Sometimes all that is needed is a well-timed telephone call to offer advice and reassurance between mediation meetings.

The LASPO review

The 2014 Mediation Taskforce looked at many ideas to stimulate the uptake of mediation. Only one made the final cut: a free first meeting for the privately paying second party. No-one knows if this has had any impact. I believe it is time to dust off other proposals, particularly considering their impact on family finance cases.

Help with Mediation

Help with Mediation was a good idea. It was a legally aided service that was meant to be provided by solicitors while clients were in mediation. However, the service was so unpopular with solicitors that it has all but disappeared. The passage of time has proved what a shocking false economy it was not to make it a workable offering. With some changes and better funding, it would give clients a pathway through to final settlement and stop the courts being clogged up with lengthy unnecessary disputes and unworkable consent orders.

There are three stages that have to be properly functioning: the solicitor’s support stage; the solicitor’s settlement stage; and the mediator’s settlement stage.
  • The solicitor’s support stage has to be better funded to make it happen. This service should also start before mediation rather than after, to stimulate mediation uptake and to enable solicitors to signpost clients into mediation and possibly elsewhere. If mediation fails due to the non-engagement of the other party or its unsuitability, clients may be encouraged to go back to seek modest additional legal advice on a private basis to prevent them from getting stuck. It should therefore be explicitly stated that there are no restrictions on privately paid follow-up work, which was a key reason for its unpopularity with solicitors.
  • The solicitor’s settlement fee stage has to be adequately funded. Solicitors have the liability for a consent order they submit and can be sued upon it. The fee has to recognise the work and the responsibilities behind the solicitor signing off on the suitability of the consent order terms.
  • The settlement fee to mediators is outside of Help with Mediation, but works alongside it. An adequate increase in the fee could run alongside the greater level of detail that mediators should be drafting, now in or the near future, to enable a binding agreement to follow.

Drop the home as ‘available’ capital

Clients with low or even no income are ineligible for legal aid if they own or co-own even a modest home (especially in London and the south east). They cannot fund advice or mediation from this, especially when they are a co-owner, or the property is the home of their dependent children. The impact of this falls particularly harshly on women with caring responsibilities. The home should be removed completely from the calculations.

Conclusion

We see the aftermath of clients who are unable to find a proper and timely pathway through to financial certainty and finality in their family situations. When clients do nothing or turn to DIY and internet solutions, they easily lose their way. Conflicts get exacerbated and prolonged, children suffer, the courts are overwhelmed and justice is not served.

Mediation is a cost effective and good solution that can step in with some couples, but only if it is robust enough to provide the follow-through that clients need to reach a genuinely settled, binding agreement. So this offering must be at the highest possible standard: now may be the time for a national protocol or guidance to light the way.

Change can also be effected from the top down. With modest changes in the way public funding is resourced, timed and operated, there could be a significant increase in the take-up and success of this route to settlement. As a result there could be a culture change for clients of all means. Change from within by mediators should also ensure that it will be viewed as a trusted and effective pathway, supported by solicitors, for clients to navigate their way out of destructive and intractable financial disputes.

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