Interview with Karl Mackie chief executive of CEDR

Introduction

As chief executive of the Centre for Effective Dispute Resolution (CEDR), Dr Karl Mackie CBE is a leading influence on the development of mediation in the UK. Karl is an internationally recognized commercial mediator. He has mediated some of the most complex civil and commercial cases to come before the English courts including the first substantial Court of Appeal mediation (NRG), the Maxwell Pension Trusts, BCCI, Atlantic Computers and the Alder Hey retained organs litigation.

A barrister and psychologist by training, Karl has written several books on the subject of mediation and is a leading trainer on mediation and negotiation skills.

During his time with CEDR he has acted as a consultant to many international public bodies and governments to develop schemes and procedures to manage conflict. Most recently, as author of the consultation document "Public inquiries – proposals for a design re-think", he was invited to give evidence before the House of Lords Select Committee on the Inquiries Act.

When we spoke to Karl we asked him to share some of his insights into mediating commercial disputes successfully.

When is the best time to mediate in your view?

There is not a once-and-for-all moment with mediation. Although more than 75 per cent of mediations result in a settlement on the day or immediately afterwards I would not consider those which don’t to have failed. It is always helpful to have a strategic review of a case with someone neutral. There is little to lose and a lot to gain in understanding the other side’s view of the dispute.

The question really is, when can you negotiate effectively? Sometimes, people are put off mediating because they don’t yet have perfect information about a dispute, but in reality many business negotiations take place without a full understanding of all the facts. There is always a level of risk.

Certainly, there are spikes at certain stages of proceedings before further costs are incurred, such as witness statements or instructing counsel. There can be other triggers that make settlement attractive at particular times, for example financial year end, and it is important to be alert to these.

Although it is preferable to settle disputes early to avoid costs, late mediations can also be successful. Court of Appeal mediations still have a 50 per cent settlement rate.

What can parties do to help the process work?

Prepare well. Good preparation by both the parties and the mediators is essential to a successful mediation. Think about what the main issues are and what are the risks for both sides. Try to see the dispute from the other side’s perspective. During the course of the mediation both sides should gain a clearer understanding of the dispute from the other party’s view point. This is one of the key benefits of the mediation process, whether or not the dispute is settled on the day. Face-toface discussions ensure that there is a better understanding of the landscape and a real engagement with the issues.

The mediator needs to be well prepared. The parties can assist by planning ahead and making sure the mediator has all the relevant documents to review before the mediation. Ideally, documents should not be sent through at the very last minute. The more dialogue with the mediator before the mediation the better. Discuss with the mediator who is needed to make the mediation work. Always share with the other side who will be attending. It can be a good idea to discuss attendees with the other side, but never insist on the attendance (or absence) of particular people. The other side may have good reasons for selecting their team which are not yet apparent. I remember a case where one party did not want a particular person on the other side to attend as they thought this person would be difficult and an obstacle to settlement. In practice, although highly opinionated, this person saw the weaknesses in their side’s own case during the course of the mediation and was instrumental in persuading that party to settle.

Some parties will provide the mediator with a position paper setting out the pressure points and areas in which they are willing to concede and this can be extremely helpful. It’s rarely done in practice as it can take time before the parties have gained sufficient trust in their mediator to share this sensitive information. A preliminary meeting or call with the mediator is helpful in establishing trust and discussing how the day will work.

What are the most common mistakes that parties make?

Lack of preparation. Often, the inhouse legal team is well briefed on the case but the in-house commercial team is not as well prepared. It’s not unusual to see senior decision makers flown in the day before a mediation and then there is little time for them to be briefed and prepare for the mediation. It’s also critical to ensure that someone with authority to settle is present at the mediation, or at least briefed and contactable.

The risks surrounding the mediation deserve careful consideration. What are the risks associated with settling or not settling? What are the weaknesses in the case?

Thought needs to be given to team dynamics. Parties should be thinking about the personal chemistry between the parties, the lawyers and the mediator. Who are the best communicators? Who are the best negotiators? Who is most likely to have a positive influence on the other side? Avoid bringing anyone who will alienate the other side. Think about why participants are there. What is the role of each person? Should technical experts be brought along?

Thinking through the practicalities is important too. Mediation days are often long and certainly intense. It is essential that thought is given to meals and breaks to keep everyone refreshed. Simple things like making sure parties are not kept in the same room for long periods without natural light can be critical to the success of the day. It should go without saying that parties must be treated hospitably, especially when one party is responsible for providing the venue.

Is it helpful to bring a barrister to the mediation?

That really depends on the situation. Plenty of mediations proceed without barristers involved. Consideration needs to be given to the role that the barrister will have. Are they likely to influence the other side with their analysis of the legal aspects of the case? Perhaps they are being brought along to make the client feel comfortable.

Sometimes other advisors are included. It’s not unusual to see insurers involved in a mediation.

If you find a mediator you work well with, is it best to use them for all your disputes?

Interestingly the feedback from our recent Corporate Counsel Forum suggested the opposite. In-house counsel commented that although it is natural to return to a mediator who you trust, it can result in a formulaic approach to mediation.

It’s important not to be too comfortable with the mediator. Using a new mediator with a different approach can be helpful.

What changes are you seeing in the role of in-house lawyers in alternative methods of dispute resolution?

Corporations and their in-house legal teams are very interested in ADR. We are seeing an increasing number of direct referrals to mediation from in-house lawyers. And CEDR’s research shows that in-house lawyers are taking a more strategic and involved role in using mediation and other early interventions to enhance their chance of reaching positive settlements.

We have been working with in-house lawyers in a number of ways. Our corporate counsel forums bring practitioners together to discuss the use of ADR. We have also developed a Collaborative Leadership Network of senior business leaders looking at collaboration in a commercial context. This is a task force focused on benchmarking effective collaboration.

Major UK corporates have now signed the CPR 21^st Century Corporate ADR Pledge which CEDR and CPR launched in the UK at the end of last year. The Pledge provides for signatories to commit their resources to manage and resolve disputes through negotiation, mediation and other ADR processes when appropriate, with a view to establishing and practising global, sustainable dispute management and resolution processes.

CEDR’s Mediation Audit published in May indicated that the number of mediations in the UK has grown by nine per cent year on year since the last audit in 2012. Why do you think that is?

There are a number of factors. Judicial direction to mediate is certainly one. The significant increase in court fees has influenced parties to think about mediation. We are also seeing a lot more contract referral cases. Stepped ADR clauses requiring parties to refer their disputes to CEDR mediation are becoming increasingly common. This has led to more early mediations when the saving in time, cost and to the parties’ relationship can be most significant. To use a family disputes analogy, we are increasingly brought in to assist in early reconciliations, which is preferable to getting involved later in negotiating the divorce proceedings.

You have done a lot of work in training others to resolve disputes. What are you working on now?

Training is an important part of CEDR’s work and we continue to run both intensive courses and short seminars on a regular basis. Since its inception, CEDR has trained about 9,000 people in mediation skills around the world and has accredited around 7,000 CEDR mediators.

More recently I have been involved in developing an advanced negotiation course for executives involved in high level negotiations. This is a modular six-day course over six months which includes reflective learning, one-to-one coaching and group learning. Delegates are tasked to apply their new skills within their own business settings between modules and can then discuss their impact with leading negotiation experts during the "negotiation clinics". The course teaches the importance of preparation and helps delegates to understand where their strengths lie. They learn the value of patience and persistence and how to handle difficult conversations.