“Forecasting Outcomes, Choosing Dispute Resolution Methods and Deciding whether to Settle” - in the “New Normal”

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“Forecasting Outcomes, Choosing Dispute Resolution Methods and Deciding whether to Settle” - in the “New Normal”

Featuring: Stephen Bate and Michael Cover

Transcript

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Good morning, and welcome to our second, our DB webinar. In our first webinar, we focused on mediation. This morning we're looking at a broader topic, decision making in the context of choosing dispute resolution, methods and strategies for settlement of commercial disputes. This is very relevant in the current climate where speed and cost of the process will be of great importance to the parties. Before introducing our speakers, I've got a couple of admin points for you. We're keen, very keen for your participation in the webinar. At the end of the webinar, there will be 20 minutes for questions and answers. And you can raise these questions by chat, q&a or the raised hand features on zoom. We will also be running a poll with a couple of questions we put to you. The I should also mentioned that the webinar is being recorded and the recording will be available more broadly on various media points.

 

Our first speaker this morning is Steven bate member of chambers. Steven is a chartered arbitrator, barrister and accredited mediator, his practice background is as a barrister at the English bar. With over 25 years experience in a range of civil and commercial matters specialising in media and entertainment law. Stephen is the author of a new book, recently published by experiments. It's entitled resolving business disputes, how to get better outcomes for commercial conflicts. So he is very well qualified to speak to on the topic of forecasting outcomes. Steven, over to you.

Thank you, Tony. And good morning, everyone. I'd like to look at a couple of parts of the book that may interest you, forecasting of outcomes, that is litigation outcomes, and how to make a decision as to whether or not to fight a case all the way to trial or other conclusion, or to accept a settlement on terms. As Philip Tetlock in his book super forecasting says we are all forecasters. When it comes to specialist areas, we tend to look to experts, politicians, economists, and others.

Lawyers, perhaps they don't know how good or bad they are as a body at forecasting. Some of the sources that I have seen, particularly from the United States of America and studies, their show that we may not be very good at it. In one study, which considered several 1000 cases, in relation to unaccepted settlement offers, the authors who conducted the research discovered that in over 50% of the cases, plaintiffs bought results that were worse or no better than the offer. And in relation to defendant parties, the percentages were in the 20s. The consequences of the decision error were many times greater. And we can perhaps return to that why that might be later on. And then another study at predicting outcomes. The author's referred to previous research, showing the expert predictions of the likelihood of events, but influenced by the person on whose behalf they were working. And overconfidence was more prevalent, when the expert had some degree of commitment to an emotional investment in the outcome. And more generally, that noise may engage in wishful thinking, believing a certain outcome is probable simply because of a desire to reach it.

 

Now, those conclusions based on research may not surprise many of you listening this morning. But I wanted to look at one part of forecasting initially that really does cause me and has caused me and perhaps you a puzzle. How is it at artists to the same transaction can have such radically different views and versions of the events that are common to them. The importance of this is playing cases, as we know are largely decided on the facts. And the party whose story is accepted by the judge. arbitrator in substantial part is generally the party that wins the case. discussing this problem with the likes of Brian Neil, he said to me that as a trial judge, he found that it seemed to him as though the parties were actually in different worlds. And this was a regular experience that he had when trying cases. And how often is it if we as mediators among us, go from room to room, seeing that each side seems to be confident of success? No doubt they may be putting on a front, but I suspect Not always.

 

So I wanted to understand a little bit more about why this may be the case, because it seems to me important to forecasting is outcome forecasting. And essentially, the answers, as far as I can see them to be they in three places. Section perception, memory, and bias. So far, as far as memory is concerned, some of you may be aware of the case law, the two cases decided by now Lord, Legos, guests, men and Ashley and blue. And in those cases, he refers to a body of literature, in psychology, that explains how information gets encoded and retrieved by memory. And essentially, it's not a pure recording experience, as we might imagine, that we are simply taking in and recording reality as it is, and that there is an emotional side to that whole process of what's called encoding, which revolves around the expectations, the needs, an ultimately in relation to recollection, the purposes for which the information is retrieved. Another problem is that we don't experience the world as it is we think we do. Essentially, psychologists tell us, the world is a construct, and that 90% of what we see and experience is a product of previous experience, and only 10% comes from new information. So for example, if I put on a pair of pink glasses, the world will initially look pink, after a while the colours will settle down and be what we expect them to be. And when I take them off, the world looks strange again, before settling back into what one would expect.

studies that have been carried out not only in relation to visual matters, but also memory show that our powers of recollection, even in relation to events that were recent are not good at all, in many cases. So one study of media meeting of psychologists, recording was taken and two weeks later, they were asked to recall what happened at the meeting. And what was said 90% of them, forgot most of it. And over half of them, either missed remembered the points or invented new points. So those are those problems at that level. The next level of problems consists of biases. And it seems to me that there are three biases at play is witness bias is party bias. And there's lawyer bias, not a little bit of lawyer bias. But also you will all to a greater or lesser extent Be aware that biases will be operating amongst clients, or witnesses who are called on to assist participate in litigation. One of these is what's called a self serving bias, the need to enhance self esteem by distorting information. Another is what so called primacy effect, we tend to give too much importance to information that we heard first in a sequence. There's confirmation bias, which I'm sure you're aware, where we tend to can tend to fit in information to a frequency pattern, and so on and so forth. So these are the background and perhaps foreground features for bearing in mind when assessing the factual picture. And when doing that we as lawyers or lawyers will follow the approach of a judge generally, of working out from a jigsaw, what is essentially a jigsaw where the various bits fit in, and what is more likely than not.

 

So turning now to forecasting as a whole, and bearing those things in mind. The question is, well, how do you approach the forecast? There are a number of views about this, of course, my view is that it has to be based on probabilities to be useful. concepts like you've got a good case or a reasonable case are pretty hopeless, because they mean different things to different people, and are, of course, imprecise. So reasonable advice on the merits, should bear in mind of course, and identify specifically all the information on which it's based and the assumptions, it should identify the outcomes that are possible from the litigation, not just win or lose, but variants such as whether the claimant is likely to recover a million pounds or dollars, or if there's a dispute, whether they're likely to recover less than a million. And if so the probability is attaching to each. We also know that there is generally more than one probability that we have to bear in mind in assessing an overall percentage chance. So breach of duty, followed by a series of causation, or is is a contract construction, limitation of liability, so on and so forth. And what one can think Well, the thing is that by simply multiplying all these possibilities against each other, under what's called the multiplication rule, you end up with an overall probability, that is pretty low.

 

There is a caution, we'll have to exercise over that approach to two ways. First of all, that many causes are connected. And, for example, you might think that shuffling the chances of getting the second card out of a pack, randomly, I want one over 52 times one over 52. But it of course depends on how the pack is shuffled, and whether it's shuffled and where the card is put back into the pack. And so causes are often connected. And we also know that judges make decisions or have we have experience of judges making decisions based on the overall merits. That isn't to say they don't engage in the compartmentalisation of each issue in their analysis. But in looking at the overall merits, judges often look at what they think the outcome ought to be, and achieve a result that fits with their broad view of the merits. So that those are things that I think are worth bearing in mind. And of course, increasingly, there are the use of data analytics to support these analyses. And the more data the better, so to speak, but care has to be exercised using these analytics, because essentially, they are a sum of a number of subjective judgments.

So in forecasting, those are broadly, the things to bear in mind and in relation to the factual matters. Various d biassing techniques exist in order to make sure that the person exercising the judgement is not themselves, subjecting themselves to the biases that can affect the overall analysis. And to bear in mind that the witness evidence or the potential witness evidence they're seeing, maybe, of course, faulty, as they will suspect, as a possibility anyway. So with that in mind, when it comes to decision making, about whether or not to accept an offer, or to pursue a matter to trial, the overall percentage prospects on the merits are very important. And often, one comes to think particularly as a mediator, they are regarded as too important. And one of the thing that I do come across is that people will say, Oh, well, we've got a 70% chance of success.

 

Our BATNA is whatever it is as a result of that analysis, and they will dismiss an offer. But as was said, in one of the textbooks on decision making is a business decision making. I can quote, some people make their decisions based on the most likely scenario Attempting to eliminate complexity. by ignoring uncertainty all together without bothering to make a risk profile, they just assume that the most likely chain of events will occur, determine their best choice under those circumstances and pursue it. Effective decision making takes all viable possibilities into account. So there it is, the 30% chance of losing has to be taken into account too. And we also know that for effective decision making, the decision doesn't exist in a vacuum, it's part of an overall set of objectives that the client will or should have in relation to the dispute, what are the business objectives generally, to dispose of the dispute in the best interests of the business cost effectively, and, and while maintaining the reputation of the business and to implement those objectives, a strategy will have been or should be put in place, not only a legal strategy, but a commercial strategy, to manage the risks that exist because of the dispute. There are risks if if the dispute continues, there are potentially risks if the, if the dispute is brought to an end on whatever the settlement terms are, there are still risks, they may be more manageable, but the price to pay for certainty may be too high.

 

So essentially, to make the decision, one is called on to, to make a business, we'll be wanting to identify all the potential risks of the dispute. That is whether it's custom damage to customer relationships, opportunity cost of carrying over the litigation, exposure to regulatory criticism, whatever the consequences are, and to mitigate those dangers by putting in place a strategy or strategies to combat. So when it comes to deciding what to do, answer the question that I posed earlier on in relation to decision making, what is it that ought to be done, but it seems to me that what what is to be done, first of all, is to identify each potential outcome, the chance of each occurring, consequences or each, and whether or not it's advantageous or disadvantageous, or the litigation or dispute objectives, then you have to weigh the comparative advantages and disadvantages of litigating or settling the dispute. And to do that, you have to score or weight each of the factors depending on their probability. And this can be done in a greater or lesser, sophisticated way. One thing that one has to bear in mind is how do you look at the claim if you're a claimant?

 

So if you've got a claim of a million pounds, say, you have a 70% chance of successful, how should you treat that in the overall analysis, it seems to me that what one has to do is to identify First of all, what the claim is, it's not a million pounds, the asset that you are fighting over is no doubt a million pounds. But the asset that you own is the right to litigate the shows in action, that seems to me is the thing that falls to be valued. So if you have a 70% chance of success, it appears that that shows might be worth 700,000. But you also know that you won't get all your costs back. And because you've got a 70% chance of success in relation to the claim, the costs must be discounted, the potential recovery must be discounted, and that would produce a discount of around 100,000 if your costs were 200,000, to fight that claim. So that would go down to 600,000, then you have to factor in the possibility of losing the case as to which there's a 30% chance of success. If a defendant a similar exercise was carried out in order to work out the contingent liability. So those are parts of the puzzle parts of the equation, but I would suggest not the only parts of the equation.

 

So having waited and toward each aspect of the of the problem, you've got all the ingredients you then have to strike a balance and that is that can be done by scoring there are various business decision tools and analysis tools and how they can be deployed Decision Matrix analysis t charts, cost benefit analysis so on and so forth. And of course, a reasoned cross check a reasoned analysis to a company's to accompany the exercise must be carried out. Also, bear in mind that there are various biases at place at this stage to in relation to settlement. There's devaluation bias. There's also competitive bidding as behavioural economists show that studies show that he will engage in ridiculous competitive bidding over over things that aren't worth the competition. And there are other biases such as sunk cost bias there are framing issues. If you're a defendant, Daniel Carlin's work show that people are very lot not averse and very risk seeking in order to avoid losses, but comparatively risk averse when wanting to avoid losing games. So there are a number of things to bear in mind. And one of the one of the difficulties of the whole thing is to carry the whole picture in your mind terribly easy just to, to not keep this information in mind, and, and jump into the pool, so to speak, and concentrate on one part of the puzzle, as opposed to carrying it all. And perhaps I can conclude by referring to a letter, which apparently is at the basis of much of the business decision making tools, or at least some of them, written by Benjamin Franklin to Joseph Priestley, in September 1772, when Lord Shelburne had asked priestly to be his librarian, and basically didn't know what to do. And so he turned to Franklin for advice, and then he wrote this letter which has become well known. Yes, sir, the affair of so much importance to you, wherein you asked my advice, I cannot for one, two sufficient premises advise you what to determine.

 

But if you please, I will tell you how when these difficult cases occur, they are difficult chiefly, because while we have them under consideration, all the reasons pro and con are not present in the mind at the same time, but sometimes one set present themselves and other times another. Hence, various purposes or inclinations that alternately prevail and the uncertainty that perplexes us to get over this, my way is to divide harbour sheet of paper by line into two columns, writing over the one pro and the other column, then, during three or four days consideration, I put down under different heads, short hints of the different motives that at different times occurred to me for or against the measure. And he goes on. And as a result of this process, he strikes a balance of words strike a balance, and that's how he did it. And that's how some of the business decision analysis tools work.

 

So, drawing all this conclusion, in these difficult times, where COVID has required many people to think differently, I suggest that some of these decision making tools are still and very much of use. And in an inner world where in terms of litigation outcomes are potentially very uncertain, certainly as to process in relation to litigation and delay. And also the development of the law, which laws Phillips Lord Phillips in North Neuberger suggested would undergo some change potentially in relation to the doctrine of frustration, particularly because of its all or nothing effects in certain cases. So those are my thoughts on on some of those. On those considerations that we've been looking at, that is decision making, and forecasting, obviously, I haven't had time to, to talk at greater length on topics which obviously very substantial and merit much further discussion.

Thank you, Steven. Thank you, Steven, for that very insightful talk on forecasting outcomes. I'd now like to introduce our second speaker who is Michael Cover. Michael has over 30 years experience as a barrister and solicitor, both in private practice as in as And and as in House counsel is an accredited mediator with cedar ADR group, and has been involved in over 200 mediations. Michael is on the panel of many of the leading UK and international dispute resolution institutions for arbitration. And as adjudicator, Michael is speaking to us on the topic of choosing dispute resolution methods. So over to you, Michael.

Well, thank you, Tony. And good morning, everybody. I expect we've all done quite a few webinars and zoom meetings and so on. And I must say, I'm always fascinated by by where people are sitting, an awful lot of people seem to sit in there garrets, including some, some leading journalists. And I'm always fascinated by the backgrounds against which people sit I happen today to have our put the backpack just behind me. The by late father's picture, my late father and his actually works now the Army Air Corps wings, but it kind of reminds us that there's, over the last few days and weeks, there's been some very interesting anniversaries of major conflicts, including v day, and one wonders how we would all coped with those massive conflicts Had we been around at the time. What I want to look at briefly is what are the one of the options of dealing with whatever you've got to deal with? And I suppose that one of the first points you've got to look at is what is it that you've got to deal with it? You just got an issue or a difference. And quite often the issues or differences arise not out of questions of time and money, or which contracts actually have to do with people. One can only imagine in the Brexit negotiations, what's happening with the dynamics of the people in the room, or the rooms or the various virtual rooms, but there will clearly will be something going on and in all odd experiences, dispute resolvers however big commercial dispute may be there's there's always people in Indeed, the biggest project I've ever been involved in. Everybody hates each other. And once everybody had been disposed off the project has gone on relatively smoothly. So then you've got, you might have a claim. And then when that claim is actually rejected, then you've got a dispute. And then you've got something that you can either take to litigation or arbitration.

 

So that stage or these various stages, what are your options? Well, we all think we're terribly familiar with this. But sometimes maybe we don't always think about them. You can negotiate but then I suppose the question is with whom you can then perhaps embark on some more formal process of facilitated negotiation, such as mediation, or conciliation. If you're fortunate enough to be involved in a project, which has a dispute avoidance and adjudication board, maybe you invoke that. Then there's various forms of various adjudicative forms of dispute resolution, what the ICC called expert expertise or expert determination, I've just finished an expert determination in West Africa on telecoms, for example. There's adjudication, construction adjudication in particular, but not exclusively, which is a contractual form of dispute resolution. And then there's even more formal processes of arbitration and litigation. So what are the I've also been thinking about, well, what are the users? What do you the users or those of you who are users and may be plants? Or lawyers? What do you actually need an expect? And I found quite a good pointer is actually the outcome of what's called the Global pound series of conferences which were held around the world in 2016, and 17. The results of those conferences which were attended by and canvass a wide range of stakeholders to use that word, is actually on the imi the international mediation Institute website, which is at WWW dot IMMI. mediation.org. The theme of the conference was access to justice, although I believe we should actually be talking about access to resolution Then just access to justice has a kind of adversarial ring to it. Even before you get to first base.

Now the key themes that emerged from these, this series of conferences, what did the users need, and want, and the first thing they wanted was efficiency. Now, that may mean all sorts of things. But I think we all know basically what it means. And it may involves elements of cost effectiveness, speedy resolution as possible. They also wanted convenience. And of course, in the post, or should we say, perhaps during covid, 19 world, what I sometimes call the new normal, the convenience of cross border, for example, ADR process is being conducted virtually as we're doing at the moment. It's been very much come to the fore, you don't all have to go to one place in order to do something. And so here we are. No doubt we have people from other places in Europe. No, we do and perhaps even in East Asia, for the outcome of adjudicative processes that they also wanted to enforceability. So there's not much point in having a decision if you can't enforce it. And of course, and there's not many people know this, perhaps the New York convention gives a tremendous cross border enforceability for arbitral. Awards. And that works much better than trying to enforce litigation judgments across borders. So I mean, if you take my expert determination that I was just thought I was just talking about the outcome, should I award damages would only be enforceable as a contract because it was an expert determination or snobbish, arbitrary or not an arbitration.

 

Users also want appropriate resolution, I'm not quite sure what that means. But it may well mean that if there is a need for continuing relationships, that mediation would be a good idea. If there's a need for for money to begin to continue to flow, then perhaps adjudication may be part of the answer. Now we get on to perhaps the more sensitive stuff, certainly, so far as the external lawyers are concerned, and we have to be careful as ADR practitioners, because the external lawyers are told to very much very large extent the gatekeepers the process, but one of the outcomes was that users expect greater collaboration from their external lawyers. And I think that probably means greater collaboration between each other. And this may actually be something which is happening a lot more in our current, new normal. Last, but perhaps not least, we have this perhaps slightly unsurprising outcome, and that was that external lawyers are seen as the greatest obstacle to change. So in other words, they are the group that was seen to be the greatest obstacle to moving towards what the users actually want, although they were also very self aware. So they're actually aware they were the obstacles but they're actually they're well aware of that. So as that was a major exercise, there were conferences all over the place, London, Singapore. And it's, it's it's quite long the outcomes. The final report is quite long, but it's it's well worth having a look at. So now go on to really well, where are we likely to be in what we might call the new normal? What am I call the ideal world? In other words, what we all do probably a lot of us who are actually on this webinar do as well as the parentless. I was reading a couple of days ago, somebody was saying that the the ADR world has already demonstrated its enormous flexibility. And in fact, the change to operating in a virtual way has been pretty much seamless. mediations are being conducted by zoom, although perhaps not quite as many as some people say.

You have to be very careful. And I'm sure we've all been on zoom webinars or meetings which have gone on too long without a break. So we have decided in our DB chambers, these webinars should be an hour long. And that's about as long as you can go without having a break. So you have to operate slightly differently. Those of you who've been involved in zoom, zoom, mediations will know that you can set up private rooms you can move people about in and out of private rooms, and one of our colleagues, john Wright, has done one where there were a large number of parties bolt and it was relatively easy to get them all together in the right rooms, and have private meetings with with smaller groups. We also have virtual arbitration hearings. And those probably those are really speeded things up. The redoubtable Alec Emerson, him, someone will, you will know has been instrumental in setting up a website dedicated to news on conducting virtual arbitrations. It's www dot virtual arbitration dot info, www dot virtual arbitration dot info. And it does exactly what it says on the tin. And there's loads of resources there about conducting virtual arbitration hearings. But you can see that if you've got a cross border arbitration, that you don't necessarily need to fly the witnesses about, it's going to save time and expense.

 

I think the most experienced way pre COVID-19 was we crossings out where we had one of our witnesses was cross examined. He was actually in Afghanistan. And it was done perfectly effectively over much weaker technologies than we have now. But we also actually had a witness an Australian who was cross examined, and I'm pretty sure he was wearing his shorts underneath his suit jacket, but nobody, of course could see. So also we've got webinars like this. So we're all communicating and probably much more effective, much, much more effectively, whether they're informal or form forming meetings. So where does this lead as well? The technology can drive the efficiency which people want not non non adjudicative and adjudicative processes can work together so called hybrid processes. Not that long ago, ADR practitioners were all in separate boxes, mediators, absolutely never thought about making a decision or giving a recommendation was absolutely out of the question and arbitrators completely put mediation as being something which was just some kind of soft process. Those of us who practice mediation, of course realised that it is a hard and very difficult process. So there's some thoughts on where we might go.

And are we likely to see more disputes? The answer to that will, everybody seems to think so but it's probably going to take quite a long time to pull through. And our people actually our party is going to have the money to instruct their lawyers or their lawyer is going to be there, you know, we will have to see just finally on predicting outcomes. It the head of head of disputes at Airbus, Carr Hennessy is reputed. His view is reputed to be that get out of disputes on any on any terms. And you can see this is all public main. You see, you can see that approach to the way that Airbus dealt with the recent corruption claims. And if you think about it, they got that out of the way before COVID-19 even been thought of and so we're in a much stronger position, even though they had to pay out billions of dollars and euros. final thought. Private dispute resolution, as it's sometimes called, is of its necessity privately, even if it's not totally confidential. So big business, some of the leading arbitrators probably need to be booked at least two years in advance. That's a separate problem, which we could probably talk about all day. But one of the problems I think that we have in the ideal world is that we're not good at very good at telling people what we do, particularly governments and I, when I was speaking at a conference in a national arbitration conference in which Brazil the other day, just before COVID, I put up a slide from Butch casting the Sundance kids where there's they're being followed and they keep on these people pursuers keep on and one of them says to the other, who are those those guys? And actually, that's a very good question. Who are those guys? Who are these people? Which is somebody else's? Right? It's Lucas, Mr. Lewis, I think.

 

Now, who are these people that make these momentous decisions? Those of us who look at nga global arbitration review, every day, you see decisions being made involving billions of dollars and euros and I'm not sure that we're very good at telling opinion formers and the key stakeholders, perhaps, how good we are. Okay, too. Anyway, I hope I've can I've finished on time, I think I probably have. So thank you very much, everybody. And I think you have Thank you very much, Michael,

for your tool. I would now encourage people to send their questions in I can put anyone on microphone if they want to speak to us. First of all, just to tell you that polling questions, the results are in So on the first poll, we had Do you think that pandemic affects decision making about initiating litigation or arbitration? 85% of voters think that that is the question they asked, the question is yes, that 15% of CFO voted, that didn't have an effect? On question two, we had a question. The question was, have you experienced greater pressure to go to ADR as opposed to court proceedings in the pandemic? And interestingly, 93% of the voters said, No. So that may be why we are perhaps seeing a quieter spell, as Michael suggested in mediation, at present. So interesting answers there. Now, we have a comment from Mark about, in fact, two comments. And the first one is points about bias. And I have a supplementary question about bias. So Mark has said seeing a nexus between confirmation bias and Michael's points about remembering the people as well as facts are at the heart of disputes. One value of mediated negotiation is ability of neutrals to create doubts, usually by asking questions that force the parties to self address their own bias. Now, my follow up question for that is lawyers always do their advice on the merits from the team of solicitors, and barristers that have been intimately involved in the case. And that course is understandable. From a factual point of view, they understand all the detail, but how do they manage the foot themselves? How can they put themselves beyond all of the types of bias you've mentioned? Steven, do you want to comment on that? Or is there should one go to a third party lawyer with all that in the final state?

Yeah, so it's not possible to do bias or self or the process completely. What is possible is to be aware of the biases and to take them into account to see where they may be distorting the picture. There are tools that are used, particularly the United States that I've seen in a book called Let's call, it's called Beyond right and wrong by Randall Keizer. And he lists I think it's in chapter nine a number of ways of D biassing. judgments and error. For example, He identifies the importance of a relentless search for contrary evidence to task people to write up the closing of the imagine closing arguments of the other side, as people are not on somebody on a standing basis, in relation to the cases information comes in to provide the devil's advocate opinion, so on and so forth, their decision making by us may well be used over here.

Steven, I mean, what about the mediator as the role as the model for that? The The, the catalyst for removing biases, how do you feel about the mediator doing that?

 

You can give to the client feedback to the client who's in the room obviously, with the noise generally, I think, the the probability of bias and be aware of the fact that however persuasive their story may be, or is always the other side's story will be persuasive to them or is urgent Really, logically coherent and effectively not become prisoners of their own story, because they will often be the parties we were talking to, as opposed to the witnesses, you will get to have some of the protagonists and people making the decisions won't be witnesses generate or potential witnesses. And to make them the parties aware of the levels of bias that are operating or cannot can operate, would hopefully give them the space to breathe them on their story to the degree.

Thank you, Steven, add, the next point came up again, from Mark appel. suggesting it might be helpful to hear more about which ADR process to use when and in particular, how to use processes in tandem. And Michael, this is for you briefly addressed media mediator recommendations and hybrid processes. I was going to also raise the question that the question always comes up about medaka. But do you want to talk about mediator recommendations and hybrid processes for a few minutes?

Yeah, certainly. Thank you, Tony. And thank you, Mark. If we go right back to the beginning of mediation, certainly in the UK, the original seeder mediation procedure included a if the case didn't settled included for the parties to ask for the mediator to put forward a recommendation, I forget exactly what it was called, it was a recommendation or something as to how the case might be settled. Now, of course, that's not a decision on, you know, what level of damages might be awarded all what it can't forgive injunction, but it's, it's going from what happens on the day or days at the mediation where the mediator thinks it might settle. So that was written into the seeder. dispute mediation procedure right from right from the beginning? Well, certainly from the time that I was involved, supposed to be involved in 2002. So that's very nearly 20 years. And certainly, I have used what's called immediate, what I call it, and other people, in fact, call the mediators proposal a number of times, where essentially, there's there's a gap, it may be quite big. And essentially, I provided a brief analysis of why I think the case might settle at this suggested figure. And there's two ways of dealing with then you put it to the parties.

 

And you either say to them, tell me and tell each other whether you're going to accept you will be prepared to settle on this basis? And of course, a yes and a no mean no. To yes has been a yes. And tonight has been a no. The other way you can do it is actually to put it so that they come back to you as the mediator. And obviously, they don't know. They don't know necessarily what the other one has, has said that same same rules apply. But you have to be very, very careful about about keeping competence in that situation. So I don't think there's anything wrong with it. I think that these so called hybrid processes. I've done to med ARBs. Yeah. And you obviously have to be careful about putting in suitable disclaimers in the arbitration agreement as you go into phase two. But if it's helpful to the parties, because you're familiar with the case, and I suppose I was I'm so stupid, I'd forgotten. By that stage, what would happen to the mediation are quite happy to look at the arbitration with fresh eyes. But yes, it does work. It's really what the what the parties want and not being frightened of being able to use the full extent of one's abilities and training and in, in providing a service of the parties. But on the other hand, you have to be very careful not to go where you're not the qualified, trained or experienced to go and serve. I think we will have to be following a case in high court the other little really, quite recently, we will have to be very careful about our CVS.

Thank you, Michael. And, Steven, there's a point come up from Tom Campbell QC. He says, in your talk, Steve, you don't seem to have completely factored in the soundness and robustness of the contract. When looking at overall likelihood of resolution. He says I'm sure you have but I didn't hear it. If it is it's a tough, well written contract. That must weigh against a participant being too ready to take a sizeable discount. This is now always a legal judgement. So it's important to carry out that analysis before you get into the mediation. Would you like to comment on that? Thank you, john, for that point.

And I completely agree the facts are obviously a key in many, if not most disputes, but any disputes also have these factual issues, where robustness or otherwise of the provision must be factored in as part of the risk analysis.

Steven, do you want to also comment on the question about mediator recommendations, you've got a lot of experience of mediating. From the point of view of Sorry, could I understand for the mob point of view? Well, well, Michael commented on it saying, you know, we really as mediators, we should be flexible in giving the parties our recommendations on how to resolve the dispute using wider processes, basically, and putting mediation proposals themselves. So it's Mark Appel Point. Do you have anything you want to say on that?

I think it when I called on to do that. Inevitably, the recommendation will be coloured to some extent by news such as I have a bit of the merits of the case, I wouldn't want to give reasons for the recommendation. And I'm also very conscious that I'm not in a position to and I'm not giving advice, but some measure of the overall merits of the recommendation.

Right. Thank you. I'm sorry, john Campbell, pointed out he said he should have put not always a legal judgement on the contract. So he wasn't putting purely emphasis on on the legal judgement. I, Stephen, just one very practical point that I had on forecasting outcomes. In my long litigation experience, I've found that you start off a case with perhaps not a very reasonably full now reasonably full investigation of the facts of the documentary and the evidence and the documents. And you have to because you do front loading. But very often you you get a advice on the merits that says, Yes, this case, you have a reasonable chance or something of that effect. And then you go on, and you'd go course through all the various stages, the cost mount, and then you come back to Council and the advices, or know the merits aren't looking so good. Now, the by then, of course, the costs of becoming a significant factor. So in your forecasting outcomes, how do you get over that practical problem?

So I think that goes to the strategy and the points at which you review the case. And on the one hand, so you would want regular reviews, and also some assessment of how much information you need to make an informed judgement. So being said in the literature that you have about 80%, of what you need, make a judgement that should be enough not to fuss over what you don't know. We as lawyers are incredibly risk averse. But business people are well, well used to risk and well used to taking decisions, not knowing certain things. A lot of their activities are based on risk assessments and forecasting. As long as the client knows what the restrictions and assumptions are in the advice the client can take a view on whether to settle or not. I don't think it's for the lawyer to say, Oh, well, we need we've got to go through this this this this process. Before we can consider settling. mean it may be that often it's you know enough that 80% is before the exchange of witness statements. You can just go on and on affecting the amount of knowledge you have of the case and the outcome. And it may well become an exercise in diminishing returns.

Do you think that the civil justice reforms way back now and 20 years ago have improved the ability to forecast outcomes at an early stage?

Well, they should do but they they front no costs as well. So it is question of striking a balance. In some cases. It will of course, improve decision making because you have enough information but of course bear in mind before proceedings have started, you often really don't know what the evidence is the other side will rely on you may know what they're going to say make the basic document, you've got the evidence, specifically their documents. Most important part, the information to hand is perhaps not all your thing. And that, of course, does not mean you can't you can't settle it. Because you don't have enough information. As back to me. How, how important is the legal dispute in the objectives of the business? And what is the client's appetite for risk?

Well, thank you very much, Steven. I think we're drawing to a conclusion now and I certainly we're, we're very, I think we all go out and now buy your book on resolving business disputes. It's available from spareness, press, so a little plug there. So you've done. I know it's taken you a year or more to write it, and it's certainly going to be interesting reading for everyone involved in the dispute resolution process. Can I also just plug our next webinar by our dB, we're going to hold a webinar on 23rd of July, which is on avoidance and resolution of boardroom and employment disputes. We have entered new Fincham, Sheila Bade and a third speaker to speak on that topic. And we look forward to people attending that then can I say thank you very much. All of you for attending today. Jane Gunn is our third speaker. Sorry to forget, I did have it written down. So there we are. Thank you very much, and hope to see you at the next webinar. Thank you.