Of the 130 mediations I have conducted over the last 5 years, 112 have settled. From the 18 mediations which have not settled I have noticed some common themes. I thought it would be helpful to share my insights.
So here are my Top 10 Reasons Trust and Probate Mediations Fail, together with my advice on how to avoid making these mistakes:
1 Outdated Valuations – the Silent Killer of Trust and Probate Mediations
This is undoubtedly the number one reason I see mediations struggle or fail to result in settlement.
There is often an assumption that the estate asset(s) will be sold so percentage-based negotiations will take place. Sometimes that is the case, so probate valuations are fine, but I often see lengthy discussions speculating on what each party will obtain in monetary terms even during percentage negotiations. Sometimes one party has not seen the estate property for years so assumptions can be wildly inaccurate and problematic. Significant time can be saved at mediation if there are up to date valuations.
I often see parties turn up to mediation and find out that one party would prefer to buy the other out or settle for a lump sum. Often this is the first time such a desire has been shared. Probate valuations are no use in this situation and a lack of up to date valuation evidence simply complicates the negotiations.
I acknowledge that the issue of how to obtain appropriate valuation evidence can often be contentious. If possible, I would recommend the estate obtaining up to date valuations so they are perceived to be neutral. If the parties are to obtain them, obtain an equal number of valuations by each party and ensure that the valuations are of similar quality/standing ie. all RICS qualified valuations or estate agent market appraisals.
I recently had a mediation where one party had two RICS qualified valuations and the other party had 3 basic estate agent market appraisals. The RICS party steadfastly refused to consider any of the other valuations throughout the mediation whereas the other party was seeking to take an average of all five. This was a major sticking point at the mediation. Had they been able to agree valuations (in a mediation that involved a property swap), they would not have been very far apart at all. Settlement was reached in the end, but it all took longer than it could have done.
It always surprises me that people talk about “saving money” by not obtaining valuations, but will risk spending at least £5-10k (or more!) on a mediation which could fail. A recent mediation highlights the benefits of up to date valuations. The case involved a 1975 Act claim by a disabled widow where up to date valuations were circulated by the Executors two working days before the mediation. The valuation of the main estate asset came in a surprising £550,000 lower than the parties had been proceeding on for 18 months of litigation. This asset was the former matrimonial home where the Claimant wished to remain. Settlement was possible because of the lower value of the asset. She settled on the basis she could remain in her home (which was transferred to her outright). Had the mediation proceeded based on the earlier valuation (which had been taken from a Form E figure 4 years before), that settlement would not have been possible.
2 Preparing Clients Emotionally
Most contentious probate litigators will agree that many cases are made more difficult because of the poor mental health of one of the participants. You can’t control this in the other room, but you can do your best to help your own client to prepare for the mediation appropriately. Think about what they need to support them before a mediation – it may be more than just your legal advice. For example, if they are struggling with grief, would some kind of bereavement counselling or therapy help? Perhaps a coaching session with a conflict coach would assist? Think outside the box and remember that as a lawyer you can’t necessarily offer your client everything they need in an inheritance dispute. Whilst most contentious probate litigation lawyers I know are highly emotionally intelligent, lawyers are rarely therapeutically trained, nor are they trained in active listening skills (unless they have done the mediation training or a coaching qualification) which are tools that help a client move on from their difficult place.
Many clients get stuck on their version of events. The adversarial litigation process reinforces their belief in the truth of that version of events, whilst doing very little to help them to see a possible other version of events. Trying to persuade a client with fragile mental health that the other side’s version of events may have some weight to it risks damaging the relationship and losing their trust. Lawyers sometimes find it hard to give negative advice as they want to give their client hope and believe in their skills as a litigator. Even where a client has good general mental health, an inheritance dispute can push people to challenging edges. A lawyer’s primary job is to listen in order to advise and help their client prove their version of events. That’s very different to truly and actively listening to someone to help them to move on from their view of the situation.
Unresolved childhood trauma or unprocessed strong emotions from the past can present real problems at mediation. I once conducted a mediation where an adult child 1975 Act Claimant was claiming against a surviving spouse who the Claimant believed had been the reason for the breakdown of her parents’ marriage, which resulted in her going into care. She struggled to get past the wounds of the past which made the mediation very difficult. Whilst settlement followed a week or so after the mediation, I couldn’t help feeling that the Claimant needed more professional help to assist with the trauma of her past.
In more serious mental health cases, medication can cause a problem at mediations. In one six party mediation I conducted, an individual’s medication wore off and the client could no longer provide lucid instructions. He had warned everyone that was likely to happen but unfortunately it was not possible to reach an agreement in time. The mediation had to stop, which was unfortunate given that the parties were essentially at the point of having agreed a settlement.
3 Poor preparation (or the wrong preparation!)
I often see too much focus on the evidential points and not enough focus on important and relevant practical points, such as the valuation evidence referred to in point 1 above.
Bundles are often overworked and overloaded – it doesn’t need to include everything that has ever happened on the case. I know from my fee earning days how engrossed lawyers become in their cases. When client pressure is added in, it’s easy to see how lawyers feel that they have to send the mediator everything, (“so they really understand what has gone on”), but trust me, it’s not necessary. I could probably effectively mediate a case with a fraction of the information provided to me.
Lawyers often facilitate the gathering of further evidence just before mediation, which is sometimes disclosed just before or even at the mediation. This kind of ambush normally sends the parties backwards. On the other hand, disclosing information which has been asked for by the other party often helps. In a recent mediation of a will validity claim, one party felt that they had never had an adequate explanation of how a homemade will had come into being. They had also asked the beneficiary of the homemade will for bank statements, which had not been provided. Acknowledging that this was needed for progress to be made, the lawyer involved asked her client to write down how the will had been drafted and the lawyer read that statement out in the other room. She also disclosed some relevant bank statements. Whilst such disclosure would have been helpful earlier, it helped the Defendants significantly and settlement was reached quite swiftly afterwards. There is of course a risk with any disclosure on the day of mediation as it can open a can of worms and take the parties down rabbit holes that don’t lead towards settlement. Early consideration of what disclosure is needed for a mediation to be productive is very helpful. At the end of this article, I refer to a possible idea that could help with this.
A particular bug bear of mine and many mediators is position statements. I have written a whole blog about this which I refer you to: https://www.doveintheroom.com/blog/how-to-write-an-impeccable-mediation-statement. In short, my top tips are (1) It’s not a skeleton argument (counsel please note!) (2) try to say something new, especially if that helps acknowledge something important to the other room (3) talk about settlement structures and the parties’ needs and interests, not just why you will win and (4) try to adopt a respectful and dignified tone. Remember the client in the other room is a human being dealing with a sensitive and emotional dispute. Insulting them and upsetting them just before a mediation normally impedes progress, especially at the start of the day.
4 Interest-Based Negotiation Beats Legal Arguments
The law tends to take a bit of a back seat at mediation, at least across the rooms. When legal points (whether new or those that have been made before in correspondence) are sent via a mediator from the other room, I can assure you that they tend to make little to no difference at all. This is normally because they have been stated before so repeating them is pointless. Cases are settled at mediation based on clients’ needs and interests and their appetite for risk. At mediation, the legal position has most relevance in your own room as clients need to consider the risks of proceeding with litigation rather than settling.
There is extensive negotiation theory suggesting that it is more effective to focus on an interest-based negotiation rather than a merits-based negotiation. This means sharing your client’s needs and interests e.g. they need to be in a flat near family for support. The human brain is wired to reciprocate with further interest sharing rather than responding in an adversarial way and such negotiations are normally less acrimonious.
5 Failure to prepare the client’s expectations
It is common for clients to have surprisingly little understanding of the risk they are facing with litigation. Even if they are told, they find it difficult to accept that they should factor that risk into any offers that they make. Sometimes it seems clients don’t have a good understanding of what their best day in Court even looks like, meaning that they make unrealistic offers during the mediation, especially at the start.
Clients sometimes turn up to pre-mediation calls not understanding what mediation is. This is despite lawyers having explained it in their way and me sending out briefing notes explaining it. Clients need to prepare for compromise, not a mini-trial or war. It’s too common for parties to bring new evidence to mediation in the hope that it will be a smoking gun that leads to victory.
Clients should be prepared for achieving “good enough” settlements and not getting everything they want. Most successful mediations finish with both parties crossing over their so called “red lines”. One lawyer described mediation to me as “the law of equal disgruntlement”, which sums it up nicely! I also tell clients in my pre-mediation call to prepare for “mild disappointment, but relief”, which tends to help them cope with those feelings when they come. I often sense that clients arrive at the settlement they need to move on with their life, rather than the settlement they think they want coming into the mediation.
6 Lack of Transparency on Legal Costs
It is a mystery to me why legal costs are kept secret until the 11th hour before mediation. Defendants need to know what they are facing BEFORE the mediation, not on the morning. I often see defendants who have made offers prior to mediation that do not even cover their opponent’s legal costs. They often come to mediation still not planning to offer more than the costs as they don’t know the figures. Once costs are disclosed, I often have to spend considerable time helping clients to come to terms with the fact that if they want to settle, they are going to have to offer something that is meaningfully more than the legal costs.
Even more of a mystery is how costs figures that I am given either the day before mediation or on the morning of mediation often significantly increase by the end of the mediation day, despite me asking for them to be calculated up to the end of the mediation day. This is often coupled with clients also having to come to terms with the fact that their own costs are higher than they expected, which adds to their already difficult journey. I’m not suggesting that figures are made up, but believe me, moving cost figures during a mediation always causes suspicion in the other room that they are not genuine.
7 Confirmation bias
A definition of confirmation bias from the American Psychological Association is “the tendency to look for information that supports rather than rejects one’s preconceptions, typically by interpreting evidence to confirm existing beliefs while rejecting or ignoring any conflicting data”. I see this play out in litigation and mediations regularly. It affects both clients and lawyers. Tunnel vision is another way of describing it. Everyone needs to come to mediation with an open mind, both about the likely outcome, and being willing to listen to possible facts that they don’t like to entertain as possibly being true.
The mediation process is not designed to extract or arrive at the truth. Clients need to come to terms with the fact that there are multiple possible versions of the truth at play and that the aim of the day is settlement rather than establishing what is true or false and who is right or wrong. We all have blind spots around these things. We find it particularly difficult to believe that a different version of events could be true when we are feeling emotional about a situation.
The Stephen Covey quote, “Two people can see the same thing, disagree, and yet both be right. It’s not logical; it’s psychological” emphasises the power of perspective and how different individuals can interpret the same situation differently based on their personality, background, beliefs and experiences.
8 Pitching Opening Offers Too High/Low
It is surprisingly common for parties to make offers prior to mediation and then to attend mediation and go backwards. Sometimes this is done inadvertently by changing the structure of an offer. This is mostly on the basis that further legal costs have been incurred since making the offer. Guess what – so has your opponent!
This approach starts the mediation off on a very difficult note. If this has to be the first offer (and it is understandable if the offer was made very early before protracted litigation), then it needs to be very carefully explained, preferably in advance of the mediation rather than on the morning. Lack of subsequent movement from that kind of starting point is also a very difficult approach to take and can lead to a feeling that there is a lack of mediating in good faith.
There is evidence that suggests that if you start your negotiation with a high or low anchor, then you are likely to do better than if you start lower or higher (depending on which side of the fence you are sitting on). However, there is a risk with this approach if you overplay your first card. An unreasonably high anchor is always reciprocated with a mirror response. I have seen parties adjust their first offers (to move backwards) on receipt of an unreasonably high first offer from the other party. Such an approach makes the day longer and also runs the risk of insulting the other party. Treating the other mediation participant with a degree of respect is important at mediation. One of my favourite quotes is from Sun Tzu which says, “Build your opponent a golden bridge to retreat across”. Dignity and saving face is important. Making significant moves from a high or low anchor in a short space of time also runs the risk of you losing credibility with the other mediation participant. Parties sense that you were trying it on with your first offer and that there is more movement to be obtained.
9 Lack of proper estate accounts and tax
This is a fundamental point for estate disputes. It is very difficult for beneficiaries to weigh up settlement offers if they do not have a clear understanding of their likely inheritance. There needs to be a clear position in relation to the following: 1) administration expenses, both incurred and future 2) the legal costs incurred by the Executors which they are entitled to recover under their indemnity 3) up to date asset valuations and 4) accurate tax calculations.
A list of entries showing monies spent and money received is not estate accounts and not adequate. I appreciate that often there are cost constraints, but time is wasted at mediation without proper estate accounts. Time wasted means money wasted in extra mediation costs, normally with mediations going on longer than they need to.
It is also imperative that lawyers representing clients have a clear understanding of the tax consequences of possible settlement structures, not only for the estate but also for their individual clients. I would always recommend the estate lawyers being available for any queries during mediations.
And then there’s tax. My heart sinks when the “t” word is brought up at about 5pm! The result can often be that agreements reached following hard work done during the mediation day can be jeopardised. Lawyers should try to establish the tax position of possible settlements in advance of a mediation and ideally have access to their own tax advice during the day.
10 Pre-Mediation Meetings
From the start of my mediation career, I have included not only a 30-minute Zoom meeting with the lawyer from each side, but also a one-hour meeting with each client. I use the time with the clients to explain the mediation process, listen to their side of the story and understand how they are feeling. Clients find the time invaluable as they feel heard by me before the mediation day. They generally turn up to mediation calmer and ready to talk about resolution. It also saves time leading to shorter mediations.
A few weeks ago I was at the TL4 Contentious Probate Circle event. At the end of the day everyone had to share a gripe or prediction for the future. One Solicitor, Amanda Smallcombe of Birketts contributed that she wished that solicitors would have a pre mediation meeting a few weeks before a mediation to agree what steps need to be taken to set the mediation up for the best chance of success. This was music to my ears and I couldn’t agree more. From next year I am introducing a further pre-mediation planning meeting with the lawyers, which will take place soon after the mediation is booked. These sessions are designed to give everyone a chance to get the best out of the mediation by identifying sticking points before the mediation day. Using a check-list, we will cover issues such as whether there are up-to-date valuations, whether the estate accounts are adequate, any pressing disclosure or tax issues and exchanging costs information. Think of it as a pre-mortem that is sometimes conducted in project work in businesses. Tackling potential issues upfront gives the mediation the best chance of success. I will be offering to facilitate these meetings as part of my standard process and it will be included in my fee.
Concluding Thoughts
I hope these tips are helpful. Please feel free to share them widely and use them in your correspondence with your opponents if it helps your points to land! It’s amazing how when a point is made by a mediator the reaction is less defensive even if the same point could have been made by a party.
That’s the magic of mediation!