I have been invited to write an article for publication in the Autumn edition of the Expert Witness Journal (ahead of the Bond Solon annual international Expert Witness Conference in London on 9 November 2018), entitled, ‘The Advocate and the Expert in the Court of Protection’. The article is being co-authored with Dr Hugh Series who is a consultant in old age psychiatry at the Oxford Health NHS Foundation Trust, a member of the Faculty of Law at the University of Oxford, and a medical member of the Mental Health Tribunal (first tier). In this post, extracting text from the draft article, I introduce, a new technique called ‘BME Mediation’ that I have pioneered for the mediation of appropriate estate and trust disputes worldwide. This technique was derived from the technique of ‘Guided Settlement’ that I pioneered and outlined in my previous book the ‘Contentious Probate Handbook’ published by the Law Society, and will be more fully outlined in my new book the ‘Contentious Trusts Handbook’, that I am currently writing. What I conclude is that in Court of Protection proceedings, BME Mediationcan result in an all-round ‘win/win’ outcome for all parties, with P‘s best interests being placed front and centre – particularly where related Care Act issues are engaged and need to be resolved to enable a plan to be put in place and implemented in P‘s best interests. As far as I am aware this is the first time such a method of ADR has been suggested, and is timely in light of the progress of the Mental Capacity (Amendment) Bill [HL] 2017-19. I would therefore welcome any comments and criticism.
An application to the COP can include a request for an order that the parties attend mediation. In furtherance on the overriding objective (Rule 1.1), the court is expected to encourage the parties to use an alternative dispute resolution procedure where appropriate, and once proceedings are issued, the court can consider whether all or any of the issues subject to application are suitable to be referred to mediation. When is mediation appropriate? ‘The issues covered in case studies mediated ranged from residence (most frequently cited, with 59% of cases involving residence) to medical treatment and statutory wills (each raised in 7.4% of cases). Almost one-third of cases involved finance and property. Other issues in the cases mediated included Power of Attorney, Deputyship, holidays, and Deprivation of Liberty … The success rate in the reported cases was high, with 78% of reported cases reaching an agreement either during or following mediation. Written agreement was reached in 52% of cases, with a further 19% achieving written agreement following the mediation. Oral rather than written agreement was reached in 7% of cases. In 22% of cases there was no agreement. In most of those where an agreement was reached (59%), the terms of agreement were incorporated into a court order. Reasons for lack of agreement being reached included entrenched positions, too many parties and too little time, and the existence of allegations of financial abuse and fraud. Examples given of approximate cost savings were between £6,000 and £30,000 – the exact savings depended on length of case and when in the proceedings the mediation took place, as well as estimates of savings of judicial and court staff time, and time of counsel and local authority professionals.’ ‘Mediating Court of Protection cases – Summary of research’ by Charlotte May: https://ukaji.org/2017/05/03/mediating-court-of-protection-cases-summary-of-research/
‘For those who have proposed mediation or responded to a suggestion by the court or another party, it is essential to consider what to expect from the mediation. Advisers will need to have a clear grasp of the strengths and weaknesses of the client’s case. Perhaps for this reason, many Court of Protection mediations take place after the receipt of experts’ reports … This is an ideal time to take stock of the evidence as it now stands, in as objective a way as possible … In anticipation of the mediation the following issues should be considered:
· Assuming that new evidence (especially in the form of expert reports) has been received, what if any impact has this evidence had on the views and positions of the parties?
· Advisers should explore with their clients as neutrally as possible whether there are any concessions which the client feels they could offer which might promote an agreement. These might include matters that could not be achieved through litigation alone …
· It is important to evaluate in the light of the evidence what the client can realistically achieve in the litigation. If mediation fails what is the likely outcome of a contested hearing?
· Is there any reason (on an objective evaluation) to believe that any of the other parties have not agreed to mediate in good faith?
· The potential benefits of mediation should be weighed , even if it is unlikely to deliver a full resolution: might it narrow the issues or at least improve the parties’ ability to communicate?
· With this point in mind advisers are encouraged to manage their client’s expectations …
Court of Protection cases pose particular challenges. P’s interests need to remain central to the process. If P is a party, he or she is likely to have a litigation friend who is likely to be present (or be represented) at the mediation. The litigation friend should make every attempt to ascertain P’s wishes and feelings on the issues which are being mediated. By definition, P is unlikely to be able to take part in the process of compromise and give-and-take that may be involved in mediation. It is the mediator’s role to ensure that P remains the focus of the mediation and to reduce the time spent disproportionately on satellite issues which may be considered important by the other parties. The second difficulty is that Court of Protection cases will frequently involve an imbalance of power between the parties, as they may typically involve a dispute between a statutory body and one or more individuals. It is suggested that this requires the mediator to satisfy him or herself that even though one party may be in a much stronger position, that party remains willing genuinely to consider an element of compromise.’ Court of Protection Handbook, paragraphs 19.33 to 19.41. In for example a residence dispute governed by the Care Act 2014, that is inextricably linked with COP proceedings, the mediator could be a leading specialist QC, who could be both facilitative and evaluative.
I have developed a new technique, called ‘BME Mediation’, for the amicable resolution of trust and estate disputes (which will be fully outlined in my new book for the Law Society, the ‘Contentious Trusts Handbook’: https://newsite.carlislam.co.uk/contentious-trusts).
‘BME’ stands for ‘beginning’, ‘middle’, and ‘end’. The steps in the procedure are:
1.1 Commercial analysis – joint evaluation of:
– estate/trust assets;
– opportunities (i.e. commercial exploitation of hidden value, e.g. IPR rights in relation to a work of art);
– risks (e.g. the IHT/CGT consequences of a DOV executed after the s.142 IHTA 1984 window has closed, or the actual impact of BREXIT on the property market, e.g. if in the surrounding locality for valuation, a business fails or moves abroad, resulting in: (i) unemployment; (ii) a surge in mortgage default; and (iii) an increase in the volume of comparable properties being sold ‘cheap’ at auction, placing downward pressure on the market);
1.2 Legal risk analysis – separate evaluation of the:
– facts (i.e. a chronology);
– remedies & procedure; and
2. Middle – exploration/mapping of:
2.1 needs/preferences e.g. retention of land to run a farm as a viable going concern versus assets available for sale to generate liquidity (and their saleability / current market value based upon condition/status quo);
2.2 opportunities e.g. planning permission to release/exploit hidden or trapped value or tax e.g. the RNRB for deaths after 6 April 2017;
2.3 choices – if e.g. party ‘A’ is willing to settle for asset ‘X’ and party ‘B’ for asset ‘Y’, evaluating the difference in value arising from the asymmetry between:
– the value of each party’s respective claims on the estate/trust assets as a whole i.e. X+ Y); and
– the individual market values of ‘X ‘and ‘Y’; and
– the cost of extracting value from ‘X’ and ‘Y’, e.g. if a property requires renovation before it can be sold, which when calculated may illustrate that the difference between the value at which ‘A’ and ‘B’ will settle (the ‘Zone of Difference’) is in fact less than 5%. In other words, that a symmetrical BATNA would = settlement at the mid-point of 2.5% (if actually doable, i.e. practicable);
2.4 adjustments to be factored into the settlement equation, i.e. which can reduce the Zone of Difference (‘Z’) to zero; and
2.5 arithmetical comparison of Z (as a crunched number) with the potential costs of litigation (‘C’) on:
– the standard basis if a party wins i.e. because that party would usually fail to recover around 1/3 of their actual costs (which e.g. in a trial costing around £150K each = a loss of £50K; and
– liability for own costs and other party’s costs (on standard basis if a party loses) (e.g. £250-£300K),
and chances of success (which at the early stage of any proceedings, i.e. before disclosure has taken place and witness statements have been exchanged is difficult to forecast with any accuracy, hence a conservative estimate is unlikely to be greater than 60/70% on either side = a difference of 30:35.
2. End – Agreeing a fair and sensible split of estate/trust assets (i.e. X + Y) that avoids the ongoing and increasingly large risk of C either: (i) exhausting the available value (including hidden value) of X and Y, or (ii) the risk of either or both A and B, ending up in negative equity. This requires pragmatism because in the long term ‘less can mean more’ if litigation is avoided/discontinued.
In relation to COP proceedings:
· X & Y = P;
· the value of P = costs of implementing a ‘best interests’ decision (‘BID’);
· based upon expert evidence about P’s capacity; assessments and reports provided by a local authority about P’s needs and the available options, and resulting costs (‘RC’), the COP can endorse a BID agreed in mediation between e.g. two warring local authorities (‘LA’s’) about how RC is to be funded (‘F’);
· in agreeing F, the LA’s can address adjustments e.g. to take account of voluntary payments already made by one LA (‘LA1’) toward P’s residential care costs following a move by P to the administrative area of the other LA (‘LA2’), which LA2 can compare to the future costs of litigation (including possibly a referral to the Secretary of State and where a convention right is engaged and the claim qualifies, proceedings in the ECHR).
The point being that in mediation:
· LA1 and LA2 can at the ‘beginning’ agree upon what is in P’s best interests based upon expert evidence;
· in the ‘middle’ they can then work collaboratively to identify the practical options available and costs involved; and
· at the ‘end’ can jointly develop a plan (including transition), to implement a BID for P that can be approved by the COP judge.
That should result in a win/win outcome all round because:
· P’s best interests will have been met;
· LA1 and LA2 will have spent their precious resources on developing a plan for implementation, instead of on legal fees;
· the plan can be implemented by the COP (who do not have jurisdiction to decide public law issues and therefore cannot order a LA to pay for P’s ongoing/future care); and
· LA1 will exit on terms that are satisfactory to LA2.
The acme of the advocate and the expert in the COP is therefore to work collaboratively inP’s best interests with the aim of the parties agreeing a BID for approval by the court that is possibly better for both P and each LA, instead of going to court. That is why from the outset of a mediation the mediation advocate should say to the other counsel,
‘Thank you for meeting with us today.
I will be corrected if I am wrong, but what I think you say about the facts and the law is …
It is not my job to persuade you that your arguments will not succeed at trial.
As you know we say that we will succeed.
I am not interested in having an argument with you about whose view is right.
I suggest that litigation is not going to be a great outcome for either you or my client. The risks are…
I am here because I believe that we can reach a principled and fair deal that is not only good for my client but also better for you.
I hope that you will work with me to achieve this today’.
Each issue in dispute can then be approached constructively:
(i) from the point of view of needs, interests (with P’s ‘best interests’ taking priority), and options, rather than fault and blame; and
(ii) by focussing on the best possible outcome for all of the parties.
Both sides can then work to maintain an open and reasonable atmosphere, with the mediation advocates emphasising objectivity, resulting in a potential settlement being judged against agreed criteria to test fairness.
Because the ‘beginning’ requires preliminary groundwork by each party, in preparing: (i) a commercial analysis; and (ii) a legal risk analysis, to be provided privately to the mediator ahead of the mediation, i.e. as a ‘road-map’ to educate him about the issues, facts, law, and dynamics underlying resolution of the claim, there is no need for a plenary session, other than to discuss ‘house-keeping’ matters. In other words, instead of exchanging partisan position papers, and wasting precious daylight engaged in posturing and positional argument about who is ‘right’ and who is ‘wrong’, resulting in tempers being inflamed, and the further entrenchment of positions, resulting in ‘road-blocks’ that prevent the making of a deal before 5pm, the parties can set the mediator free to work his magic from the outset, and get on with the business of ‘doing a deal’. They can then start to engage constructively with each other in a joint-problem solving exercise, conducted by ‘proxy’, through the mediator.