Have you got Authority for that?
Anthony Wooding, Managing Partner at Kerseys Solicitor, recently wrote an article for Albert Square Mediation. We have republished the article here on the Kerseys website. Anthony is also a Team Member of Albert Square Mediation and ASM Suffolk, and is a Civil and Commercial Mediator.
The mediator’s life is a busy one and not all of his work is confined to the mediation itself either. Apart from making sure he has digested all the issues from the papers, there are several pre-mediation issues to be looked at such including finding a suitable venue, refreshment availability etc. One key pre-mediation consideration is ‘authority’.
In my very early days as a mediator, I conducted a very involved ‘boundary dispute’ mediation where there were lots of issues about definition of boundaries, access rights and buildings. We worked hard and managed to get agreement on all of them after a full day’s work. We always knew that legal costs still had to be resolved but as the day progressed it became likely that the parties would agree to each paying their own costs. But then the solicitor for one party checked in with his client’s legal expense insurers, who were not present. It turned out the solicitors would only get paid under the policy if the matter was concluded at trial (even if his client lost!).
It is worth saying, as an aside here, that people often assume that when they have purchased legal expenses cover, usually as part of a standard house and contents package, that they are going to be covered for all kinds of disputatious matters, and it usually falls to their solicitors to advise them to the contrary, or if those solicitors are desperate for the work, accept the consequences rather than sacrifice their professional ethics (which in this case they would be if they told the client to carry on to trial, win or lose, so they could be paid).
The only other way forward here was of course for the solicitors to charge their client, when their client had assumed that whatever else happened on the mediation day, they would not be paying for it. That wasn’t going to happen in my mediation, although it was mooted in final sessions.
A failure in these circumstances to settle means that in the long insurers might well have incurred a lot more expenditure. If they had been present they might well have taken that commercial view, whatever the niceties of the policy wording. Instead, the solicitor was only able to speak to someone low down the pecking order who saw it no doubt as just one insurance query amongst many in a normal busy day. Whereas for the parties, this was their big day.
Of course the solicitor could be said to have been at fault for not checking this point beforehand. When parties are represented a mediator is professionally ‘entitled’ to assume that all those attending will have authority, through their solicitors, to settle on the day.
By contrast, with unrepresented parties no such assumption can be made and the position must be checked prior to the mediation. Supporters and friends don’t have such authority: they can sometimes be helpful but mediation should never include the ‘phone a friend’ option, and nor should it have a ‘phone your insurer’ option.
An ASM mediator will always enquire to see if there are insurers involved. If so he or she will ascertain whether an insurer’s representative will attend and will check with solicitors or lay parties that they have authority to settle all issues including costs related matters. If the response is ether negative or unclear then an ASM mediator will necessarily consider refusing to participate.
None of this is fool proof. What if a solicitor initially says he/she has authority and then subsequently retracts? There might be grounds for a professional disciplinary matter but this may be of cold comfort to the parties and threat of a complaint will not transform a failing mediation into a successful one.
Events can conspire on the day of the mediation but the well prepared ASM mediator will always address as many risks in advance as possible and consider any costs related questions.