ARAG News

Avoiding acrimonious court battles

15 July 2015

Mediation is increasingly encouraged by the courts as an alternative form of dispute resolution between parties.  An unreasonable refusal to mediate can have a bearing on the sum of legal costs awarded where claims are pursued through the courts if judges consider that the matter could have effectively been resolved by parties through mediation.

At ARAG we recognise the clear benefits that a successfully mediated resolution delivers to the parties involved and for suitable claims, where the parties agree, we are happy to make arrangements for claims to be referred to mediation. This has the following advantages for our policyholders. 

- Mediation is generally much quicker than moving a case through standard court channels, allowing a resolution to be arrived at sooner.

- While court hearings are public, mediation remains strictly confidential.

- Mediation increases the control the parties have over the resolution. In a court case, control resides with the judge who may not have a legal remedy at his disposal that is as acceptable as solutions that emerge in mediation. So, mediation is more likely to produce a result that is mutually agreeable for the parties.

- As a mediated outcome is reached by the parties working together and is mutually agreeable, compliance with the mediated agreement is usually high. This reduces the risk of either party requiring legal action to enforce compliance with the agreement. The mediated agreement is, however, fully enforceable in a court of law.

- Mediators are trained in working with difficult situations and employ various techniques to open and improve dialogue and empathy between the parties. The mediator acts as a neutral facilitator and guides the parties through the process. Parties are motivated to focus on possible solutions to the dispute broadening the range of possible solutions. Through this non-adversarial process each side is likely to be more flexible in understanding the other's position and to work on the issues at the core of the dispute.

Our LEI products cover mediators' costs provided that we have accepted the claim. In such cases we appoint an experienced and specially qualified mediator who impartially assists in the negotiations to settle the issues in dispute. Mediation is suitable for many different types of dispute. Here are a couple of case examples from mediation experts Bond Mediation, who are achieving successful outcomes for increasing numbers of ARAG policyholders.   


Good Foundations

 Bond Mediation was instructed to act in a dispute between an elderly lady and a property developer whose building works had damaged a stone wall on her property.   She was also worried that the foundations had been affected.

Bond contacted both parties and the builder offered to replace a few stones.  This offer was not accepted as a solution and a structural survey was undertaken to assess the extent of damage. The home-owner was concerned that the remedial work that had been recommended in the survey would be insufficient and that the structural survey itself, was not complete.  Bond mediation has in-house construction expertise and arranged a site visit in terms of mediation for both parties but also to carry out their own inspection of the wall.  The inspection found that the wall and its foundations had indeed been damaged.

The mediator obtained agreement from the builder that he would at his own expense secure the wall foundations and repair/replace the loose and missing stones.  Bond's construction expert checked that the work had been done to standard and specification upon completion.

The builder was happy that no further claim would be made. The home-owner was extremely satisfied and relieved that the matter was resolved and it is estimated that the wall will be in place for at least another century.

 

Contract Dispute - Restoration

Bond Mediation was asked to offer mediation services between two companies (customer and supplier) whose contractual arrangement had broken down due to a query over invoices

This was quite a complex matter in terms of the sheer size ledger of invoices and the dispute over rates and the different types of items involved. The supplier also had some issues that they wanted to discuss with their customer regarding the type of work that was being passed to them which differed from what had been agreed - this was in the antique furniture restoration sector.

After a degree of preparation work with the two parties and a full day of exchanges, held in separate rooms in one location, the mediator was able to slowly build the trust and respect between the parties that existed in the early years of their relationship.

Resolution was negotiated around a mid-point in terms of a financial settlement and the relationship repaired with the necessary degree of trust. This was in effect a restoration job by Bond - restoring the original good will between the parties that previously existed!

 

Lesley Attu
Product Development Manager

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