10 Warning Signs That It May Be Time to Mediate

Litigation sometimes has to go to trial. But there are cases where, somewhere along the road, the dispute takes on a life of its own. Here are ten warning signs that it may be time to stop and consider mediation.

There is a danger, when writing about mediation, of suggesting that every case ought to settle and that anybody who proceeds to trial has somehow failed.

That plainly isn’t right. I am a litigator as well as a mediator and there are plenty of cases which need a judge. Sometimes the parties need an authoritative determination. Sometimes one side’s position really is unreasonable. Sometimes a claimant needs an injunction or a defendant needs a claim dismissed. And sometimes perfectly sensible attempts at settlement simply don’t work.

But there are also cases where, somewhere along the road to trial, you begin to wonder whether the litigation has taken on a life of its own.

Most experienced litigators will recognise the signs. Here are ten of them.

1. The costs are starting to bear an uncomfortable resemblance to the amount in dispute

This is the obvious one, although surprisingly it doesn’t always stop people.

There is nothing inherently irrational about spending £20,000 pursuing £50,000. Much depends upon the prospects of success, costs recovery and the importance of the dispute.

But there comes a point at which the arithmetic starts looking uncomfortable.

Suppose £50,000 is in dispute. Both parties have already incurred substantial costs and another £30,000 each may be required to reach the end of a trial. Even the winner is unlikely to recover every pound spent. There is also the possibility of losing, together with the time and aggravation involved in another year of litigation.

At that stage it is worth looking at the case as an investment decision rather than simply a legal argument.

If somebody offered you the opportunity to invest another £30,000 in return for a judge deciding whether you were entitled to £50,000, would you regard it as an attractive investment?

Perhaps you would. But at least ask the question.

2. Both sides have been told that they have a strong case

This is more common than clients sometimes realise.

Two competent lawyers can look at the same evidence and reach different conclusions. There may be a genuine dispute about what a contract means, which witness a judge will prefer or which expert opinion will ultimately be accepted.

Clients understandably take considerable comfort from being advised that their case is strong. The danger comes when “strong” gradually turns into “certain”.

Very little litigation is certain.

As HHJ Paul Matthews rather neatly observed in Stoney-Andersen v Abbas [[2023] EWHC 2964 (Ch)](https://www.bailii.org/ew/cases/EWHC/Ch/2023/2964.html), it is commonplace for both sides to be told by their lawyers that they will win. They cannot both be right.

Mediation does not require either lawyer to admit that their advice is wrong. It simply provides an opportunity to consider what happens if the judge takes a different view.

3. You realise that the dispute isn’t really about the money

This is particularly common in family, probate, partnership and neighbour disputes.

The pleadings might seek £100,000, but after talking to the parties for a while it becomes apparent that £100,000 isn’t really what the dispute is about at all.

Someone believes a brother or sister was favoured by their parents. A business partner feels betrayed. A neighbour thinks they have been bullied. Somebody wants an apology. Somebody else simply wants an acknowledgement that what happened to them wasn’t acceptable.

None of this means the legal claim is artificial. Quite the opposite. These emotions are often precisely why otherwise rational people are prepared to spend so much money pursuing litigation.

The difficulty is that a judgment may not provide what they are actually looking for.

A judge can decide whether £100,000 is payable. A judge cannot necessarily resolve a grievance which has existed within a family for twenty years.

A mediation at least provides an opportunity to talk about both.

4. The parties are going to have to carry on dealing with each other

Some litigants have the luxury of never seeing one another again.

Many do not.

Neighbours will probably still be neighbours when the judgment arrives. Parents will remain parents. Siblings remain members of the same family. Shareholders may remain shareholders and businesses may have perfectly good commercial reasons to continue dealing with one another.

That changes the calculation.

Litigation is necessarily concerned largely with the past. Who breached the agreement? Where is the boundary? What happened at the meeting? Who is liable?

But sometimes the more important question is what happens next.

I have always thought this is one of the areas where mediation has an advantage which is difficult to replicate in court. The parties can spend as much time discussing their future arrangements as their historic rights.

5. Everyone can see a practical solution, but the court couldn’t actually order it

This occurs surprisingly often.

Take a neighbour dispute. Perhaps the obvious answer is to move a fence slightly, provide different access, erect some screening and agree who will maintain it.

Or a commercial dispute where the sensible outcome involves a reduced payment combined with future work.

Or an employment dispute where what really matters is an agreed reference.

These may be perfectly sensible solutions. But they may bear little resemblance to the remedies pleaded in the proceedings.

Judges decide the cases put before them and exercise the powers given to them by law. They are not there to renegotiate the parties’ commercial or personal relationship.

The parties themselves have much greater freedom.

This is one reason why I sometimes think lawyers approach settlement discussions too much like a miniature trial. The question need not always be, “What order would the judge make?”

It can also be, “What arrangement would actually solve this problem?”

6. Somebody says, “It’s the principle”

I don’t suggest immediately booking a mediator every time a client uses those words.

There are genuine principles worth litigating. Important points of law have to be determined somehow, and sometimes a person’s reputation, business or future conduct depends upon establishing that they were right.

But every litigator knows the other version of “It’s the principle”.

It usually arrives after the client has spent considerably more than they originally intended and is accompanied by a determination that the opponent must not be allowed to “get away with it”.

That is perfectly understandable as a human reaction.

It is not always a good litigation strategy.

There is also an uncomfortable question worth asking: what is the maximum amount you are prepared to pay for the principle?

£10,000? £50,000? £100,000?

Putting a number on it can have a wonderfully clarifying effect.

7. Nobody wants to make the next offer

Negotiations often stall for reasons which have surprisingly little to do with the merits.

The claimant demanded £100,000. The defendant offered £30,000. Perhaps both would actually move considerably, but neither wants to go first.

Why?

Because movement is thought to signal weakness.

“If we go to £50,000, they’ll know we’ve got another £20,000.”

“If we drop to £80,000, they’ll think we’re desperate.”

So nobody does anything.

Meanwhile another round of witness statements or expert evidence costs both sides thousands of pounds.

This is one of the more mundane advantages of having a mediator. Private discussions allow each party’s real room for manoeuvre to be explored without requiring them immediately to reveal their bottom line to their opponent.

The £70,000 gap which everyone has been staring at may not really be £70,000 at all.

8. The case depends upon what a judge thinks of a witness

Lawyers spend a great deal of time assessing witnesses.

We are not infallible.

A witness who appears convincing in conference may become defensive in cross-examination. Somebody regarded as a weak witness may turn out to be straightforward and compelling. An expert may make an unexpected concession. A judge may attach considerable importance to a document which both legal teams regarded as peripheral.

This is not an argument for settling every factually disputed case.

It is simply part of litigation risk.

If your case depends heavily upon a judge preferring A to B, you don’t actually know the result until the judge gives it.

There is nothing defeatist about recognising that.

9. The parties are simply fed up

This is difficult to put into a costs budget, but it matters.

Litigation can become remarkably intrusive.

For individuals, correspondence from solicitors can hang over weekends and holidays. Every witness statement requires unpleasant events to be revisited. A trial date months away can dominate thinking long before it arrives.

For businesses there is another cost which rarely appears in schedules: management time. Directors can spend hours in meetings with lawyers, searching for documents, considering statements and dealing with experts instead of running their businesses.

There are occasions when the value of simply having the dispute finished becomes substantial.

That does not mean settling at any price.

It does mean that peace has a value too.

10. Nobody can remember when settlement was last seriously discussed

This may be the most common warning sign of all.

Litigation has a timetable and that timetable creates momentum.

Particulars of Claim. Defence. Directions. Disclosure. Witness statements. Experts. Pre-trial review. Trial.

Everyone has a job to do and a deadline by which to do it.

Oddly, there is no equivalent procedural deadline saying:

“Stop for an afternoon and ask whether any of this is still necessary.”

It is quite possible for sensible lawyers and sensible clients to become so occupied with preparing a case for trial that nobody seriously revisits whether the case needs to be tried.

Mediation creates that interruption.

For one day, instead of preparing to persuade a judge, everyone concentrates on whether there is a deal which makes more sense.

Sometimes there isn’t.

But finding that out is useful too.

And perhaps there is an eleventh warning sign

There is one phrase I have heard many times during my career:

“There is no point mediating. The other side is completely unreasonable.”

Occasionally that assessment is correct.

But I am never entirely convinced that it follows that mediation is pointless.

If both parties were entirely rational, communicating perfectly, accurately assessing their litigation risk and making sensible proposals to one another, there is a fair chance they would not need a mediator.

The fact that communication has broken down and positions have become entrenched may therefore be an argument for mediation rather than against it.

None of this means mediation guarantees settlement. It doesn’t.

Nor does agreeing to mediate require anybody to compromise a case they genuinely believe should be tried.

It simply provides an opportunity, before spending the next tranche of costs, to look at the dispute from a slightly different perspective.

And sometimes that is enough.

If you recognise several of these signs in a current dispute, you can start a mediation here — and if you would like to see what the courts themselves have said about cases like these, read 10 Cases That Show Why Litigation Should Sometimes Be the Last Resort.