‘The key to generating flexibility in Mediation is recognition by the Participants [‘P’s’] that all litigation involves unquantifiable risk.’

As I explain in my forthcoming article – ‘Mediating probate and trust disputes – process challenges and tools: part 2’, which was submitted to Oxford University Press for per review on Friday – ‘A principle of human behaviour is that people do not like uncertainty. All litigation involves risk, and all litigation involves publicity. P’s are usually risk-averse. Loss aversion increases with the magnitude of the potential loss. For most P’s there will be a “tipping” point beyond which they cannot afford to lose, because the magnitude of loss exceeds the compensation any gain can provide, i.e. “the candle is not worth the flame”. Where P’s have a blind spot about the existence and extent of potential loss, [the Mediator’s] M’s function is to help them see the world as it actually is, by bringing the potential risk/loss into graphic focus. While M must avoid giving the impression that he is making a value judgment about merits, he can lay a foundation stone during a pre-mediation Zoom/TEAMS call with each P, by making a general observation that whatever the merits of each case – and whether the Judge prefers one narrative over the other, someone is going to end up with a huge “price tag” to pay at the end of the trial, and that in probate/trust cases the costs of litigation frequently exceed the value of what is at stake, and sometimes even of the estate itself. So, a seed of thought will have been planted before the mediation day, that mediation is a “risk-management” tool which can benefit both P’s. Teasdale v Carter [2023] EWHC 490 Fam, is illustrative. Moor J stated: “I have to say that this is one of the most regrettable pieces of litigation that I have ever come across. It is not just because this family has become so fractured as a result. The total costs of the litigation at the conclusion of the hearing below were approximately £828,000. The costs of this appeal are £220,000. These figures do not include the costs of the financial remedy proceedings. The house at the heart of the dispute, Cow House, is worth £245,000, after a 20% reduction for an agricultural occupation restriction.”

The key to generating flexibility is recognition by the P’s that all litigation involves unquantifiable risk. Once each P has come to this realisation, i.e. after consulting their legal advisors, M can then help the P’s to move ahead by reframing their dispute as a “risk bearing proposition”. It is not usually necessary to discuss the extent and degree of risk because, the precise quantification of the risk of losing tends to matter less than the fact that there is some risk of losing.’

That is the ‘elephant in the room’ in the mediation of both commercial and probate/trust/inheritance disputes.