Delivered virtually for the first time, the event attracted a viewership from both Hong Kong and around the world. It was fantastic to see that this flagship event still attracted a really engaged audience, even in the very different circumstances of 2020.
Bill’s lecture reflected on his 20 years of mediation, and touched on difficult questions of diversity, neutrality and confidentiality. He also considered how the various different forms of dispute resolution which we practice relate to each other.
Bill has kindly supplied us with the full transcript of his lecture here:
Where does mediation fit in the dispute resolution landscape?
It is a great honour to have been asked by Harbour to deliver the 2020 Harbour Lecture. I am very conscious that this is the first time a mediator has been asked to give this lecture which in itself is a striking reflection of the way mediation has established itself in the landscape.
In a less happy first, this lecture is being given remotely rather than in person. I am a great supporter of Hong Kong International Arbitration Week. It is a matter of great sadness that I am not this year able to join my friends in Hong Kong and I hope it will not be too long before we all meet again.
What I am going to try to do today is to offer some thoughts on the place of mediation in the dispute resolution landscape. In outline I want first to touch on the things that define mediation and make it different. I then want to mention some things which all of us in this landscape have in common. This includes in particular our relationship with the most important people here – the parties, our clients. Finally I want to take a look at the future and at the challenges that lie ahead.
Arbitration Week has never treated mediation as a rival or competitor. And discussions about supposedly ‘rival’ forms of dispute resolution seem to me to be wholly missing the point. Mediation on its own is not and could never claim to be a complete dispute resolution system. Mediation works in the shadow of the law. It works best when the parties have ready and effective access to an adjudicatory resolution of their dispute – should they need it. The question ‘should I arbitrate or mediate my dispute?’ simply makes no sense.
Certainly the opening lecture of most mediator training courses can feel fairly competitive. The young converts are told that mediation is better than other systems: it’s cheaper, quicker, more confidential and better for the parties’ future relationships than arbitration or litigation. In a well-conducted mediation all of these things are true – at least in the cases that settle.
For their part arbitration and litigation systems can only function in a world in which the vast majority of disputes end in settlement. One of the most startling things I discovered about the law when I began my law degree many years ago was that over 96% of all cases commenced in the courts do not go to trial. It was inevitable that eventually somebody would notice that devoting all or most of our energies and our skills to winning favourable judgments in the remaining 4% was a little askew. With that recognition came the development of techniques like mediation, the recognition that the business of settling cases is worth thinking about as a skill in its own right and that the assistance of an experienced third-party might be worth spending money on.
Neutrality is key. The Judge and the arbitrator are impartial to start with but ultimately become partisan in making their awards and judgments. The advocate is partisan throughout, from instruction through to celebration (or commiseration) over the outcome. The mediator remains neutral throughout. That does not mean that they are bland or anaemic – I hope not. Mediators in the right case will robustly test the positions of each party. But they should not and generally do not descend into the arena with their own views. So instead of saying to a party in a private session “You are going to lose on clause 37” you are more likely to say “I am having trouble explaining your construction of clause 37 in the other room. Tell me again how you are going to put it to the judge”.
Take two parties in dispute. It is a money matter. They and their lawyers are in discussion – they are arguing expensively. Why on earth would they spend even more money to set up a mediation? Mediators bring no additional money. They bring no future business opportunity. They know less, after reading the file for only a few hours, than anybody else involved. What does it add to introduce a mediator into the situation?
What they bring, I suggest, is a completely open, attentive, listening mind to help the parties examine all of their options from as complete a perspective as possible.
When I am trying to explain what mediation is and why it is different from litigation and arbitration I think back to a personal injury case in which I acted as junior counsel. Liability was admitted and the only issue was the quantum of damages. (The claimant was a young woman who had suffered severe scarring to her face in a car crash.) At the end of her evidence-in-chief she was asked if she had anything else to add. She said yes, she wanted to read out a poem. The judge asked why. As she took out of her purse a folded clipping from a magazine she explained that the poem described the satisfaction a woman feels when she admires the lines of her own face in the mirror. “That”, she said, “is a feeling I will never experience again.” The judge turned to my QC and suggested that the poem be read and that “we all move on”. My leader objected; he said, as I recall, that the poem was prejudicial, that it was irrelevant and that it had not been mentioned in her witness statement. The judge explained to the witness with a sigh that she could not read out the poem and in a moment of inexpressible sadness she folded up the poem and put it away. In his judgment the judge hammered us in damages. He made a point of explaining that, “In awarding this sum I have in mind in particular that this woman will never again be able to look in the mirror and admire the lines of her own face.”
What has all that to do with mediation?
So often in mediation we find that many of the parties’ real needs and interests include things that cannot be expressed in the quantum section of a Statement of Case. Of course the damages were important to her. But what she also needed was the small element of closure that could come from reading out that poem to us. We represented the person who had inflicted these injuries upon her. In a mediation she could have received that closure. The mediation would have been about the poem. The litigation for its part produced a proper judgement, a just award of damages. It did its job. Mediation would have achieved that and more.
The difference between litigation and mediation becomes vividly apparent when I am training Judges, arbitrators and advocates to be mediators. When they first start to mediate they have the greatest difficulty in not asking focused and relevant questions. They home in on the questions on which the legal issues will turn. There is a hawk-like intensity about their enquiries.
As a mediator you have actively to avoid this approach. You need to conduct a wide and relaxed review of the parties’ needs, interests and motivation. It is a matter of leaning back not leaning forward. I find myself telling my trainees to go away and work on preparing open, even irrelevant, lines of questioning. I tell them that the more discursive the approach the more likely you are to find the gold from which you can mint a deal.
A great US mediator Nina Meierding spoke recently about the danger of saying or even thinking “I did a case like this last week”. You didn’t do a case like this last week. You have never done a case like this before. Every set of parties, every dispute is different. That is the essence of mediation.
What then do we dispute resolution professionals all have in common?
The late Sir John Laws, a very great English judge, told a story about being driven through Athens in a taxi with his wife. Lady Laws was sitting in the front seat and the taxi driver asked what her husband did for a living. She looked in her pocket dictionary for the translation of the word ‘advocate’ (he was then still at the Bar) and came up with the word Paracletos. “He is Paracletos” she said. The taxi driver turned as white as a sheet and the car swerved to the side of the road. To a member of the Greek Orthodox Church ‘paracletos’ means ‘the holy spirit’.
The word intrigued me. A paracletos is literally somebody who stands beside you. As we all do with our clients. You are with them but separate from them. ‘Comforter’ is one of the translations it receives in Judaeo-Christian writings. In the Church of England’s Book of Common Prayer it is translated as “mediator and advocate”. I think that combination of meanings is significant.
In the rooms at the International Dispute Resolution Centre in Fleet Street I am normally working as a mediator. Occasionally I find myself sitting as an arbitrator in those same rooms. It has often struck me that whichever hat I am wearing much of what I do with the parties in conflict and much of my thinking is common between the two activities. We are all in some sense standing beside our fellow citizens who are in dispute, in conflict. The human instinct to clarify and resolve is a strong one. It is the instinctive reaction of a schoolteacher walking across the school playground to break up a scuffle. “What’s all this about?” That I think is the instinct we are all obeying.
In our different capacities and with our different skills we are, every one of us, a paracletos. Every arbitrator, every judge, every loss adjuster, every expert witness, every advocate, every mediator and, dare I say it, every litigation funder. Thus the key thing we have in common is our relationship with the most important people in the whole landscape of dispute resolution, the clients, the parties themselves.
Let us look at this relationship for a moment. The longer I work in this area the more firmly it is brought home to me that for many, many of our clients legal disputes are at best an unhappy distraction. Litigation and arbitration are not, remarkably enough, culminating life experiences for them.
As professionals we relish the legal issues, we enjoy an effective cross-examination, we enjoy the tactics, we prize the clever amendment. But a year ago in Hong Kong in the course of Arbitration Week Karl Hennessee, GC of Airbus, made some memorable remarks. He will not mind if I recall them. He reminded us that when faced with a dispute he is seeking for his company, above all, not victory but certainty. And he wants it as quickly as possible. His priority is that his commercial and engineering colleagues carry on with their work undistracted. Litigation and arbitration, however exquisitely conducted, simply are not his core business.
While on the subject of speed we have to record that mediation has progressively ceased to be a one-day wonder. There tends to be greater and more elaborate preparation . More importantly parties now expect there to be aftercare from the mediator if there is no settlement on the day. Post-mediation work is in many ways the most creative and satisfying part of the job. But parties can be tempted to hold back their most serious concessions until the following week. I recall one General Counsel (who was desperate to settle a costly and protracted arbitration) being told to look at his mediation as something of a journey. He groaned and pointed out that he was already on one journey and he didn’t need another.
The fact is our clients do not love the law as we do. I recall a client who sat through a fascinating discussion of a difficult point of law and then after two hours observed, “Mr Wood, I think we have improved the question out of all recognition. I wonder if you could oblige me with the answer.“
Litigation and arbitration of course achieve the ends of justice. The fair and accurate adjudication of civil disputes is a pillar of the rule of law. But how often do we find ourselves construing language that none of the parties read at the time of contracting and that they would not have understood if they had done so? How often are we applying that language to facts which nobody at the time of contracting could possibly have foreseen?
Business people largely thought they understood what consequential loss was. A company which had suffered a substantial loss of business came to me nervously for advice as to the likely effect on their claim of a consequential loss exclusion. I advised that the clause excluded not liability for lost profits but loss covered by the second limb of the rule in Hadley v Baxendale. “Is that good news or bad news?” asked the Chief Executive doubtfully . It was of course excellent news – but even when in due course he was awarded his damages in full he still seemed somewhat bewildered.
A palaeontologist recently spoke about the frustration of using the fossil record to explore evolution. He complained that you never got a complete picture of the process but that each fossil gave an isolated snapshot of the process. He complained “It’s like a movie where you missed the beginning and have to leave before the end“. That’s how I think about my clients and I suspect how they think about me. It is their movie. They are the stars. I missed the beginning and I and the arbitrators and the lawyers and the funders, all of us, we will all have left the screen long before the end.
Above all it is vital to remember that we often are not in the movie at all. Just as the cases that go to trial are a small fraction of the cases that “go legal“ so the cases that go legal are but a small fraction of the disputes and potential disputes that, out in the real world, break out or threaten to do so. How so? Quite simply most business people are good at negotiating. They are used to prioritising, pacifying, compromising and toughing it out as appropriate. They get things sorted out all the time with a phone call, a meeting over coffee, if necessary a meeting between senior management. Imagine how many exquisite points of law lie unexplored on the cutting room floor of commercial history. If only those parties knew what an exciting and nourishing journey to the appellate courts they have missed out on. Many parties have said to me in mediations words to the effect : “I don’t know why we are here Bill. You have no idea how many issues of this kind – often worth much more money – we and they have been able to sort out in the past without lawyers”.
Just how good the parties are at negotiating was brought home to me in a dispute between a big oil company, and an oil trader. Towards the end of the day I was in a private meeting with the two principals when the representative of the oil major said this: “You keep saying you want $4 million. I have offered you $3 million. This is all starting to get boring. I will tell you what I will do. I will pay you $4 million and we will never speak again. Or I can pay you $3 million and I will let you buy me a beer.” Without hesitation the oil trader did the deal at $3 million and they headed out of the building towards the nearest bar.
In many ways my task in a mediation is to establish an atmosphere of mutual trust and understanding, an atmosphere in which principals can leave the legals behind and have that kind of meeting. There they can break the back of the dispute. I understand that in the USA, particularly on the west coast, direct contact between the parties is increasingly rare. To me that is a matter of great regret.
What then, as I complete my 20th year of mediation work, seem to be the developing themes and the great challenges that lie ahead?
I will mention four:
- Can we grow the use of mediation?
- Can we increase diversity?
- What will be the impact of the Singapore convention?
- What will be the impact of the pandemic?
Can we grow mediation?
The soundtrack of the last twenty years in English mediation has been the murmur of disappointment amongst the many people who have trained as mediators. Ultimately they have not found that there is sufficient demand to sustain more than a few full-timers. Lots of judges and even politicians have made the right noises about litigation and arbitration being a last resort and the importance of trying mediation first. And yet outside the well-resourced high value commercial dispute area we have to be realistic about mediation’s lack of progress. The lack of public awareness of mediation is a problem that is resolving only very slowly if it is resolving at all.
Every jurisdiction is different. Each jurisdiction is taking a different approach to the encouragement of mediation. Each for example sets the dial for the degree of court encouragement or even compulsion at a different level. In England and Wales, the jurisdiction I know best, a number of points strike me. First in well-resourced high value disputes the position in respect of the take-up of mediation is probably still as described in the 2009 Kings College London survey of cases in the Technology and Construction Court. There it was found that 60% of the cases that settled did so through negotiation and 35% through mediation. That seems to me both unsurprising and entirely acceptable. Experienced specialist lawyers should be able to negotiate the settlement of the majority of cases unaided. When they get stuck they can mediate.
At the other extreme lie our small claims and consumer disputes. ( I appreciate that Arbitration Week is about international commercial disputes I hope you will forgive me .) The resources for providing free mediations conducted in our Small Claims Court (one-hour long mediations conducted by sequential telephone calls) are severely stretched but when they are made available they undoubtedly deliver.
What about the huge middle ground between these two extremes? Does the private sector have the right product in the shape of well-organised mediations with clear quality assurance at a proportionate price for these middle-range cases? If there is such a product how do we get the parties to use it with so little time for case-by-case management by the court and so little public awareness of mediation as an option?
Peer mediation is a sign of hope. School children set up their own mediation schemes to deal with issues that arise in their schools. They really do catch the mediation bug. I met one very young mediator at a peer mediation conference. She confided that she enjoyed mediating so much that if things were too quiet she would to go out into the playground and “start something”!
It is too early to say whether the design of the online court systems will help or hinder. The future may lie with increasingly subject-specific mediation. Matrimonial and employment cases already have their own specialised ADR machinery. Specialist mediation services are now available for medical negligence cases. Boundary disputes are another example where specialist mediators could be deployed.
Of course mediation is not the only solution. It is important to recognise the huge case-load carried by consumer/ombudsman schemes. CEDR’s last audit estimated there are now just over 10,000 civil/commercial mediations a year in England and Wales whereas the Financial Ombudsman Service alone deals with 1.2 million complaints a year.
The courts and the rule-makers will continue their restless search to find the right combination of nudges and inducements . Compulsion seems to be a long way off and, though much discussed, truly compulsory systems are hard to find internationally. A presumptive approach that requires a party to opt out of mediation by applying to the court may be the solution.
Many litigators have grasped that it is very often in the clients’ best interest to negotiate or mediate as early as possible. But as John Kiernan of Debevoise and Plimpton mentioned in a recent interview there can still be pressure on lawyers to keep these thoughts to themselves. When they are beauty paraded for a big piece of litigation they may prepare a pitch which refers to the value of early settlement and mediation. But then they get to the meeting and it is clear that the client is angry and that the Board of Directors wants blood and victory in that order. Early settlement then receives rather less prominence in the presentation that follows. So we may think we have moved on intellectually from the view that to suggest mediation is a sign of weakness. The reality is that the dispute resolution community or at least its clients still have a way to go.
Can we increase diversity?
This lecture is being given as you may have noticed by a middle-aged white male. A pretty typical specimen. Mediators are not, at least not in the jurisdictions I know best, a diverse group.
In the arbitration world there are important steps being taken to ensure more diversity. The role of the appointing bodies is crucial in this regard. Taking gender first the ICC has reported that the number of women arbitrators doubled in the last four years. The lion’s share of that improvement has been the appointment of women by institutions or women being appointed by their co-arbitrators. Tellingly for the mediation world, party appointments of women still run at only 13.9%.
The mediation world is populated by sole practitioners or loosely organised panels. The choice of mediator is almost invariably a matter for selection not by any institution but by the parties and their lawyers. There is only rarely any equivalent to appointment by a co-arbitrator.
The lawyers who choose us are themselves not a diverse group. Over 50% of the partners in London law firms went to private schools when only 7% of the general population did so. They tend to appoint mediators they either know from their earlier legal careers or that they have used before. The exchanging of lists of names as a means of choosing mediators also seems to have a lowest common denominator effect that discourages new or diverse choices. Litigators may think they are “playing safe“ in going for experience but the result is depressingly monochrome – and male.
CEDR have just initiated their 2020 Mediation Audit. This excellent audit is especially welcome in an area in which so few metrics are available. This year in addition to the usual questions about settlement rates and fees the questionnaire asked mediators to consider various potential barriers to gender and ethnic inclusion and diversity and to consider possible solutions. Does the problem lie in access to training, in appointment to panels, in getting observations or is it the final stage – getting appointments? CEDR asks us to consider whether law firms should include more diverse choices on their short-lists or give some form of diversity pledge on mediation selection. Funding for training is another obvious area for progress. The audit results will make interesting reading.
In terms of diversity mediation has to do better. But the tools are there to help us make a change. When we meet again in a year’s time let us hope we can report progress.
What will the impact of the Singapore convention be?
The Singapore convention has been welcomed by mediators as providing for them the recognition previously accorded to arbitration by the New York Convention. But there is a view that the convention is really a matter of branding a product rather than answering a genuine need or dealing with a widely-felt anxiety about enforcement. Time will tell.
The convention is a remarkable animal. Unlike the New York Convention it is not in any sense reciprocal. A ratifying country agrees to expose its residents and their assets to direct enforcement of settlement agreements reached in mediations anywhere else in the world. Thus for a country to ratify does not directly boost the effectiveness of that country’s mediations. What matters is the convention status of the country where enforcement is sought. How many countries will ratify fully is hard to tell. It is even harder to tell how many will ratify without stipulating that the parties to a mediation have to opt in to the convention for it to apply (as the convention permits and as, for example, Iran has done).
What will be the impact of the pandemic?
We all desperately hope that by this time next year we will be in Hong Kong and Covid will be, if not forgotten, at least receding in significance. But I mention Covid as I conclude these remarks because it does seem to me that even if it proves to be a temporary concern it has probably changed mediation forever in important respects.
Mediation is an intensely human process. That is why to our surprise we have all found it to be extremely well-adapted to using Zoom, Teams and other platforms. Since lockdown began nearly eight months ago I have sat here in my home office in front of this microphone and this camera for hours at a time. The extraordinary fact is that, with technical adjustments, I have been doing my job as I have always done it.
Broadly these mediations have had the same content, proceeded by the same steps and have succeeded in achieving resolution in just as many cases as would have been the case face-to-face.
It is true that body language is harder to read. But when somebody’s face is two or three feet from the camera and microphone in their laptop and the connection is working properly you can get a pretty good read of people’s reactions and emotions.
Mediating online is massively convenient. By the simple expedient of starting mediations at lunchtime UK time or early in our morning parties are able to participate fully in my mediations even though they are in different time zones. As I stood here yesterday I dealt with a dispute in which both parties had team members in New York, Milan and London. They had no need to book any flights or any hotels , they didn’t even need to leave their homes. I do of course miss the scandalised refrain “have we really flown all the way here from (Oslo, Los Angeles, Shanghai) to receive an offer as low as that?” That doesn’t quite work when you are sitting at home working on the dining room table.
Preparation is also much assisted. I normally start a face to face mediation day with useful meetings with each side in private. That will often be the first occasion on which I have met those parties as opposed to their lawyers and they are more than a handshake and an introduction. They are a vital stage in the process. And yet those meetings tend to be truncated and a little tense because the parties are mentally preparing for the upcoming joint session . Now working remotely I am getting proper, relaxed, unpressured access to clients in separate meetings in the days before the mediation. It makes the day itself hugely more efficient and importantly less tiring.
So face-to-face mediation will ultimately return. Some people are less enthusiastic about remote mediation than I am. But a very significant proportion of cases will stay online.
So that completes this particular landscape painting. I hope it was not too impressionistic or discursive. The landscape will always need to contain prominently the other more adjudicative dispute resolution systems, not to mention the ombudsmen and the consumer services. They are complementary and each has its vital role to play. But I think the demand for mediation, in international commercial disputes and elsewhere, is now assured. I end with the hope that a group of younger and more diverse mediators will soon be available to meet it.