The pros and cons of using mediation to settle farming disputes

The increased cost of court fees means there has never been a better time to look at alternative ways of settling farming disputes. Serena Gowling, barrister at The Rural Law Practice and accredited mediator with Agri-Mediate, explains what mediation can offer.

Changes to legislation mean those wanting to make a claim in court will now have to pay increased claims fees – amounting to 5% of the total claim where the claim is between £10,000 and £200,000.

This amounts to a 600% increase in fees for claims of £200,000. 

Mediation is a real alternative. About 85% of disputes that go to mediation settle at a fraction of the cost of court proceedings, while also helping to preserve farming relationships.

But the process is still misunderstood and lawyers often leave it too late to advise clients to try it.

What is mediation?

Mediation helps parties find a practical solution to their dispute with the help of a trained professional. If a solution can be agreed by all disputing parties it is legally binding.

There are two types of mediation:

1. Facilitative mediation

This is where a trained, independent facilitator (the mediator) assists parties in dispute to reach a resolution. It is private and confidential and usually nothing said can be repeated in court.

Parties meet at a neutral venue for between four hours to a day. The mediator will usually start with a joint session, explain the process and ask the parties to set out in simple terms what they want to achieve. 

The parties then break into separate rooms and the mediator will go between them, in private, to explore individual positions and to assist the parties to identify areas where compromise may be reached. Parties are free to leave at any time.

Settlement is sometimes not reached that day but in the days that follow as parties have time to reflect on what has taken place.

2. Evaluation mediation

The mediator (usually a professional with significant experience in the subject matter of the dispute) assists the parties to reach resolution by predicting what a judge/arbitrator or tribunal is likely to do.  

Evaluative mediators helps each party to evaluate their case and a practical settlement usually follows. 

Pros and cons

A mediated settlement is quick and certain. Only you will decide what you are prepared to accept and, although you are unlikely to get everything that you want, mediation is not limited to matters that the court can resolve. Often, other issues are what finally unlock the key to settlement. 

Mediation allows parties to move on in business and preserve relationships. The process is voluntary and you do not have to reach agreement.

Court proceedings, on the other hand, are risky. Trials are expensive and irrecoverable costs are always incurred, even if you win. 

Getting to trial may take months, sometimes years. Success is never guaranteed. The judge may find against you despite what your lawyers have advised. 

The cost to your business of your time spent dealing with lawyers and the stress of that process should not be underestimated. Business and family relationships can be damaged and there is no certainty over the outcome.

However, mediation will not look at all the evidence, as you would in court, and so if you need to be able to argue over the finer details and get all you want, it may be worth the risk and cost.

The cost of mediation

A mediator will usually charge £1,500-£3,000 a day. That cost is split between the parties equally.  Lawyers and other professionals will charge for their costs of attendance and you may need to pay for the venue. If the mediation is successful, those costs will be a fraction of the costs of litigation. 

In comparison, court fees now at £10,000 just to start a £200,000 claim (or 5% of the claim value), and litigation costs often reach between £50,000-£100,000 per party.  

When to mediate?

Almost all cases are suitable for mediation but in farming disputes, where business relationships and reputations matter, it is ideal. 

Rent reviews and disrepair claims can be as costly as court proceedings and often take even longer, while boundary disputes and easement issues can cost more than the disputed land is worth.

Landlord and tenant relationships can be damaged, while farming partnership disputes and contested wills can destroy family relationships.

Always consider mediation early before costs get in the way.

Usually by the time lawyers suggest mediation very significant costs have already been incurred. Costs are so often the stumbling block to resolution.  

A good lawyer will be able to advise on the risks of not having full disclosure of all the evidence in the mediation process,

Particularly in farming disputes, it is usually the practical consequences that matter, not the principles of law.