Blind bidding – the next logical step in remote mediation

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Commercial mediations have been a key factor in UK dispute resolution for more than 20 years. Despite that length of time, the process has not really evolved.  As in many areas of life, COVID-19 has thrust a spotlight on mediation – can it be done differently? People are taking up remote mediation, but that seems to keep all the same ingredients of a standard form mediation, except on Zoom rather than in person. Can we go further?

This article discusses a relatively new concept of "blind-bidding mediation". It is mediation stripped to its barest essentials. It is fast and cheap. It is genuinely innovative. What's more, it works. 

The rules of the game are simple. There is none of the usual paraphernalia associated with mediations – no position statements, no plenary sessions, no one-to-ones, no waiting around, only emails. There are three bidding rounds. If there is a match, the figure is revealed and the process ends in agreement (subject to the terms of a binding settlement document). If there is no match, the parties proceed to round two. If there is still no agreement, then in round three the mediator will either announce a match, or he will say whether the parties are within a specified sum apart (for example £30,000). That is pretty much it.

The parties choose a mediator and a date in the usual fashion. Because the process is so straightforward, we anticipate that there should be much greater availability from popular mediators and also greater freedom to use those mediators who are less known. 

The bids can be inclusive or exclusive of costs, but this must be agreed between the parties beforehand. The process will only really work if there is only one matter in dispute, most obviously money but it could be something else. Of course, it is possible that there could be an overlap, in which case the parties agree in advance what should happen. In our case, we agreed to split the difference.

We first tried out the process a couple of weeks ago. In our case, both the first and second bids were pronounced as no match. It felt unusual bidding in a vacuum, but that encouraged a focus on what the client genuinely wanted to resolve the dispute, without the distraction of what the opponent was offering. On the third bid, the mediator announced that there was no match, but, as if by magic, the parties were sufficiently close that the mediator was able to disclose the bids and we settled shortly after that. The day took an hour or two of our time. The total mediator costs were a few hundred pounds.   

Reflecting on the day, we came up with the following non-exhaustive list of advantages and disadvantages:

Advantages

  • Considerably cheaper and less time-consuming than a traditional mediation. 
  • Very simple process and as close to a game as dispute resolution can get. Easily understood by clients.
  • Experience shows that some highly experienced defendants are becoming tired of the old-style mediation process and may refuse to attend. This process could be an acceptable alternative to them.
  • Enables the client to focus on the specific aim of a settlement figure.
  • It has a small but growing track record of success.

Disadvantages

  • This is still a relatively new concept and it will take time to see if it is any more or less likely to succeed than a traditional style mediation.
  • The traditional mediation process is there for a reason. This truncated style may lead to a lower success rate (we shall see) because of the steps which have been missed out.
  • It does not easily lend itself to claims which have more than one issue in dispute. The parties will have to decide outside the process what is to happen about costs.
  • It remains to be seen whether the courts will accept the process as sufficiently substantial to avoid the costs consequences of an unreasonable refusal to mediate. That said, there is nothing to stop the parties moving to a mediation if the process does not succeed, since the process creates momentum even if unsuccessful.

Finally, the role of the mediator. It should not be assumed that, despite the ostensibly limited role played by the mediator, the role could be delegated to automated intelligence. We gained tremendous assistance from discussing the case with the mediator in advance. It was also essential that we could trust the integrity of the process by using a trusted human intermediary. Moreover, because of the momentum, even if the process failed, both parties would have been greatly assisted by suggestions from the mediator as to what to do next.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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