Commercial Mediation on 0780 288 8418

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Email: contact@berkeleysquaremediation.com

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ON LINE DISPUTE RESOLUTION ODR

  • We use it all the time when appropriate, particularly in times when we cannot meet in person.
  • Its quick, efficient, timely and cheaper.
  • We are finding people appreciate how easy we make it for them by using ODR.

Jane and the team have helped us enormously in our business relationships because they were so thoughtful, careful of what we need and brought things together so it was straightforward to solve the various problems we had.

A happy party who wishes to remain anonymous

In the end people have to talk to solve matters well so why not mediate immediately?

Of course we are hard wired for battle or avoidance, fight or flight, which do you do most in a dispute?  Mediation is the best way of us learning to be hard wired to dialogue it out, to have self-determination and choice and to make sensible and realistic decisions from a place of certainty that you the person carrying the dispute is creating the best outcome in all the circumstances.

The Four Tensions in Mediation

Mediation is the facilitation of negotiation and in order to do it well you need a conceptual understanding of negotiation and the four tensions that need managing:

  1. Its only about the Money and Alternative Solution Creation.

Creating value by expanding the pie, broadening horizons and looking at different ways to distribute the pie by focusing on interests and needs.  What extras do they have to give or ask for?

  1. Empathy and Assertiveness

Help each party to have the capacity to understand the world through the mind of the other party as well as have the capacity to assert what their interests and needs are to help the other side to have the capacity to understand them.  It’s a mix of empathy and assertiveness and beware how competitive people are in being good at asserting and lousy listeners. Keep reminding that the other side’s perspectives have to be taken into account.

  1. The third tension is that of Principals and Agents

Someone who acts on behalf of a party as a negotiator may be difficult to align with their client because they have their own interests and needs, for example Lawyer and Client.  The mediator has to actively manage and ensure they understand each other.

  1. Demands and Requests

The constant flow of people in dispute is the demand that the other side has got to know this or do that or must, have to, ought etc.  Constant reminders that proposals are always requests to which a no can be the answer and that a request will draw them nearer to their goals than any demand.

Dispute resolutions skills are far more important than having the knowledge to judge the matter

There seems to be a huge misunderstanding about the importance of a mediator in not judging the matter and instead relying on what the parties and their lawyers bring to mediation.  The lawyers who come with the parties often have a wealth of knowledge which is invaluable to keep advising their clients and advising the mediator with regard to risks, possibilities, likelihoods and the choices their party (and the other party) have in taking the steps that lead to settlement. What matters is allowing the best solution to arise in the process of mediation, not having a mediator who pushes and pulls it to where the mediator thinks it should go.

What is so good about mediation?

It is a little like what Benjamin Franklin said:

“Tell me and I forget, teach me and I may remember, involve me and I learn”.

If you tell parties what to do or what you think they should do they will probably forget any benefit and remain annoyed about the dispute, possibly for years.

If you try to teach them how to problem solve without mediating they may remember some of it and gain benefit.

If you involve them, such as when the mediator has them doing all the work of talking, engaging, discussion, dialogue, exploration, explanation, uncovering, digging, delving, discovering, noticing, hearing, drilling down, finding a way and solving etc., they will learn that this is the best solution they can do and how to live with it, move on from it and prosper because of it.

Mediation is not alternative, it is mainstream, most used and most effective, cheap and quick

MEDIATION IS NOT ALTERNATIVE – IT IS THE MAINSTREAM SOLUTION

In a report this month, quoting Sarah Gonzales, Assistant Director of Strauss Institute for Dispute Resolution at Pepperdine University School of Law, USA, she said that recent studies of dispute resolutions show that 95% of them are not going to court but settled outside by negotiation, mediation or arbitration.

Not only is it cheaper and quicker than going to court, it is also confidential and a chance for the individuals involved to step up and take control of the dispute they are in to manage it as they feel fit.  Ownership of the dispute remains with them and is not taken over by the lawyers as it would be in court.  They not only get their own say but they also get to decide what happens rather than having a decision imposed upon them.

Mediation is mainstream and not alternative.

Surely mediated agreements of any kind are the way forward in the 21st Century?

Hard Wired Prejudice

HARD WIRED PREJUDICE

Scientific research has shown that the human brain responds more strongly to information about groups of people portrayed unfavourably.  This suggests the negative depiction of ethnic or religious minorities in the media can add to prejudice.

Neuroscientist, Hugo Spiers of University College London, points out how negative stories stand out and how news is full of what we dislike.  If someone from a stereotyped bad group of people does something normally pleasant and normally favoured, they are assumed to be doing it for some other purpose as our brains cannot credit them.

Brain scans of people looking at pictures of groups of people deemed as good or bad, taking actions that the watcher thought “good” or “bad” showed that the negative snippets about the “bad” group became deemed as more and more negative.  More so than if the good group did similar “bad” things.

This is the functioning within the brain that shows implicit bias developing into prejudice.

See http://www.mitpressjournals.org/doi/pdf/10.1162/jocn_a_01056

What is the answer?  We believe it is necessary to actively check oneself and any other being to question assumptions about any other person and always make a humble enquiry.

Listening skills

One of the first skills a mediator learns is to actively listen, by which we mean taking out all our mind clutter of judgment, what they might do, what we might tell them, what we long to share, who we think was to blame etc and simply listen without thinking, simply be there, sitting in compassion, because if we gift our presence to another, it will simply by its silence enable them to sort things out for themselves.  So active listening takes trust, trusting ourselves to keep ourselves away from interference and trusting that they, in however a horrible place of conflict they are, will in time find their way because we trust that they are capable of so doing if we only stay with them as they speak.

Its a hard thing to do when we are so overflowing with all our stuff as stated by Mark Nepo:

"But how do we listen?
It is so simple and so hard. So obvious to begin and so elusive to maintain.
 In this lies the vitality of deep listening.
To keep beginning. Over and over.
To keep emptying and opening. And simply to keep listening.
For to listen is to continually give up all expectation and to give our attention, completely and freshly, to what is before us, not really knowing what we will hear or what that will mean.
In the practice of our days, to listen is to lean in, softly,
with a willingness to be changed by what we hear."
 
  – Mark Nepo,
from EXQUISITE RISK – Daring to Live an Authentic Life
 

Tax Implications of Settlements

Just think about what happened in the Barden mediation, Barden v Commodities Research Unit International (Holdings) Ltd and others 2013 EWHC 1633.  The parties did not discuss the tax implications of settlement in the mediation and the mediator did not ask.  When the settlement sum was paid net of tax to the surprise of the Claimant, proceedings continued and in the interests of justice, the court ordered everyone concerned with the mediation to ignore privilege and confidentiality and produce documents, witness statements and attend the trial.

Settlements are not neutral from tax.  Sums paid may attract income tax if they are compensation for income or capital gains tax if they are compensation for capital.  Some may be made up of elements of both and attract both to each part.  Of course, VAT may be payable too if the compensation relates to something vatable.

Mitigating tax or improving tax efficiency is OK but avoiding tax is not.  This is where lawyers need to have specific advice for their clients or recommended that their clients take it elsewhere.  Mediators may end up hauled before the court if they do not ask.  It may be the big elephant in the room that everyone is avoiding dealing with although it clearly needs to be.

London & Thames Haven Oil Wharves Ltd v Attwooll 1967 43 TC 491 established that if compensation is income related, damages are likely to be liable to income tax.  There are lots of cases but things like loss of earnings, interest, profits, rental payments, trading stock, loss of profits and usage of capital assets are likely to attract income tax.

The payer of compensation may achieve tax relief against income in the same way as it would if the payments had been made before breakdown of relations.  Likewise payments relating to capital costs and prices of capital items may create capital gains tax reliefs.

With regard to CGT (capital gains tax) there is since 27 January 2014 a change in the concession set out in D33.  If compensation is paid as a capital sum it may attract corporation tax by a company but it will need to be assessed as to whether there is a capital gain.  If it is linked to a capital asset, liability to CGT is likely. Before 27 January 2014, if a payment could not be linked to an asset chargeable to CGT, the compensation was automatically exempt from CGT.  This is changing so that only the first £500,000 of capital compensation not linked to an asset is exempt.  Any sum above that can be the subject of an application to HMRC to be exempt.  The exemption does not apply if the payment is linked to an asset.

If compensation is paid for personal injury, loss of reputation, discrimination, defamation or any other wrong or injury suffered by an indiviudal person it is exempt because of Section 51(2) Taxation of Chargeable Gains Act 1992 (TCGA) and paragraph 12 of D33.

Thanks to Felicity Cullen QC and good tax barrister.

 


Awareness of risk

The Law Society Gazette reporting this week said:

"The Solicitors’ Regulation Authority has uncovered a ‘clear correlation’ between firms in financial difficulty and increased risks to clients.  A review of 76 firms that suffered recent money problems found evidence of misuse or misappropriation of client monies at more than a quarter."

The number of mediations we carry out as a team of professional mediators in which there are lawyers present but they have not done a risk assessment of their clients' financial positions is huge.  If they are not rising to their higher "trustee" obligations they hold towards clients, solicitors are unlikely to be managing their own business well.

What is the MLATNA, the most likely alternative to a negotiated agreement?

What is the BATNA the best alternative to a negotiated agreement?

What is the MLATNA, the most likely alternative to a negotiated agreement?

If these questions are not asked in litigation the most likely outcome is everyone loses, except perhaps the lawyers, because the costs quickly begin to outweigh the possible settlement.  This is why it is sometimes the case that what the mediation is achieving is rescuing the lawyers from themselves, and for the knock on problem that no one can afford litigation when it is poorly conducted without thought to the expense to the clients or what their interests and needs are.