Can Mediators be sued?

Can Mediators be sued?

Mediation is a growing form of alternative dispute resolution and provides a much needed and beneficial alternative to the court process.

Introduced to the UK some 20 years ago, it has evolved to become in part, a regulated branch of the legal profession. Currently only accredited mediators, i.e. mediators who are accredited with the Law Society or Resolution, can sign court applications to certify that mediation has been attempted.

Furthermore, only accredited mediators can conduct legal aid mediation and secure a contract with the Legal Aid Agency to do so.

However, as the term ‘mediator’ is not a protected name in the same way as ‘solicitor,’ there are any number of people who can call themselves mediators and open for business offering mediation to the unsuspecting public.

An experience of ‘bad’ mediation can be extremely damaging to clients and can create additional work or lead to applications to court when perhaps ‘good’ mediation could have resolved the issues.

But what redress can a party who has suffered a poor mediation service do? There are unfortunately many examples of unsatisfactory mediation. For example a mediator falling asleep during negotiations, investing in an asset owned by one of the parties, excessively criticizing one party in front of the other, ignoring significant assets in dispute, showing bias or proffering incorrect legal advice.

Obviously, ceasing to take part in the mediation and writing a letter of complaint is a first step. But what if the party feels that real damage has been caused by the mediation experience and would like financial compensation.

For example, a client attended mediation with his ex wife to discuss the financial issues. They exchanged financial disclosure. At the first joint meeting, the mediator got out the flip chart and asked what the wife wanted. The mediator wrote the wife’s wishes on the flip chart. She then turned to the husband and asked how he was going to make wife’s wishes come true. Mediation broke down, husband complained of bias, but did not get any apology or refund. He has since issued a Form A as wife refuses to negotiate believing that she is entitled to have what she wants.

If the husband in this situation sued for breach of contract, would he be successful and if so what damages could he hope to receive? Could he prove that the mediator installed such a belief in wife that it made litigation a foreseeable consequence which could otherwise have been avoided, or did wife have that belief anyway and nothing would ever have changed her mind?

Therein lies one of the many difficulties in taking legal action against a mediator. In fact there are any number of obstacles facing a prospective claimant. Mediators do not make decisions for clients, yet have great influence on how the constructs of the process happen, eg who is in the room, how mediation is conducted, the amount of time given to each party to speak, agenda setting. Research has shown that world wide there are few if any reported cases of any mediator ever being sued and of those cases, there are no reported cases of a mediator ever having to pay damages.

Yet, as Oregon Professor Michael Moffitt says in his article Suing Mediators, ‘A mediator who engages in egregious behaviour, violates contractual or statutory obligations, or breaches separately articulated duties should enjoy no legal or de facto immunity from lawsuits. Simultaneously, courts should favour lawsuits from parties who exercised their judgment in terminating an inadequate mediation. Wise policy and respect for autonomy demand deference both to mediators’ subjective judgments and to parties’ decisions regarding their continued participation in mediations.’

One such case is the Australian case of Merigan-James v James, VC 2006. The parties entered into mediation to discuss division of assets, namely a property and a business. The property was valued by several valuers and a view formed as to the valuation. On that basis, the claimant agreed to have 37.5% of the proceeds of sale of the property, respondent the remainder and the business was transferred to the claimant.

The respondent refused to implement the agreement and it later transpired the house was in fact worth some $100,000 less than the figures discussed in mediation. He argued that there had been a mistake of fact and as such the agreement reached at mediation should be set aside. He also felt he had been pressurised into agreeing the terms in order to avoid litigation. The claimant said she felt distressed during the mediation which had been conducted the day after her mother’s funeral.

The judge disagreed that there had been a common mistake during the process, stating that there was a mistake of opinion, not fact and upheld the agreement reached. Although referencing the difficult circumstances of the mediation, this did not negate the agreement reached.

There may be examples of non reported cases of mediators being sued or threated with legal action which have settled out of court but it is not possible to reference these. However, with mediation becoming more main stream, should all mediators have to embrace the same practice with the same accountability for the standards of mediation.

In the article by Melvin A Rubin, an American mediator, he concludes: ‘As professional mediators, we should come to grips with whether we are willing to accept the same responsibility associated with any professional. This responsibility must include ethical standards, with enforceability, and grievance procedures and accepting liability for our own negligence. The people we serve professionally deserve, and need to be aware of, our obligations to them and to understand those remedies that are available. It is time that what we aspire becomes a reality with meaning within the practice of mediation.’