Mediation is helpful – but no panacea

The government is increasing mediation funding by £5.4m to help separating families reach agreements out of court. But when is mediation appropriate?

Since 2014, it has been a legal requirement to attend an initial mediation meeting before issuing a court application to resolve a family dispute, unless a couple qualifies for one of the fairly limited exemptions. Family law judges are under a duty at every stage of proceedings to consider if alternative dispute resolution is appropriate. They even have the power to adjourn cases and redirect parties to mediation to reach an out-of-court settlement before continuing with the litigation.

Benefits of mediation

The encouragement to mediate is a welcome one and the government’s extended funding will only help to facilitate more families in trying to resolve matters through this forum. Mediation can be used for many different types of dispute and ought to be suitable for lots of families.

It is most often used to address issues relating to arrangements for children when parents separate; and the division of finances on divorce. It is particularly well suited to cases where both parties are committed to seeking to resolve matters without litigation and are willing to compromise and communicate. Many recognise that if they apply to the court instead, the ultimate outcome will most likely be taken out of their hands and a stranger will make life-changing decisions about their future. A significant advantage of mediation therefore is that the couple remain in control and able to reach decisions between themselves about what suits their family’s individual circumstances.

When is mediation not suitable?

Many believe that it is impossible to mediate if the relationship between the parties is acrimonious and communication between them is very challenging. While this of course is likely to make the process more difficult, it does not mean that mediation cannot be tried.

Mediation will not be appropriate, however, where there are allegations of harm by one party towards the other or concerning a child. If someone’s safety is at risk, then mediation is not the right forum to seek to reach agreed outcomes and it may well be that the party and/or the child requires the protection of the court. In some instances, the vulnerable party may not even recognise that they are at risk and it will fall to the mediator to inform the parties that mediation is not appropriate.

In addition to issues such as emotional, financial or physical abuse, there may be occasions where the court’s powers are required because one party is trying to hide assets or put them out of reach in a bid to protect them from being divided. In such instances, mediation is unlikely to be suitable given that one party may well need to make an urgent application to the court to freeze assets or indeed to find them.

Many believe that mediation is not suitable in cases involving particularly high-value and/or complex assets, such as trusts; overseas properties; and/or private businesses. Yet this is not always the case.

Mediation requires both parties to produce full and frank disclosure when seeking to resolve financial disputes. Without that, it is not possible for parties to reach an informed decision as to what would be considered a fair and suitable outcome.

Mediation is extremely flexible and it is possible to bring in experts to assist the parties at the relevant juncture. This could include their respective lawyers; a pensions expert; an accountant; or a financial adviser/planner. Where mediation is likely to fail is in circumstances where one party is simply not willing to provide full and frank disclosure of their financial circumstances, for example to include wealth that is held offshore or in a trust.

Alternatives to mediation

When deciding whether or not to consider mediation, it is important to be aware of the alternatives. Family courts are currently under incredible strain and there is a significant backlog in dealing with cases. Such pressure is not going to disappear any time soon. Those considering a court application have to accept that it will be subject to substantial delays which generally lead to increased cost.

Moreover, not only is court financially expensive, but it is usually very emotionally expensive for all involved (including children). Mediation allows parties to remain in control of the outcome. It is not positional and does not apportion blame; it reduces stress around relationships rather than increases acrimony; and mediation often improves communication to enable parties to move on in a more civil manner.

There are of course other alternative dispute resolutions options available, such as having a private negotiation hearing, discussions through lawyers and arbitration. What is clear is that mediation – and all of these alternatives – are here to stay. The court will continue to do everything in its power to direct parties to these forums wherever possible.

Katie O’Callaghan is a partner at Boodle Hatfield, London