NEWS & VIEWS

Discover why business must embrace mediation now

Lockdown is teaching us many new ways of working. When resolving disputes mediation is both extraordinarily successful and considerably underused. Different analyses have shown that rates of resolution are eighty per cent or over yet usage in litigated disputes is under twenty per cent and many still need to be persuaded to adopt mediation. This has been an enigma for years, but the current situation makes it essential to rethink.

The pipeline

Employment

In many businesses potential disputes are accumulating held back only by the lockdown. Large numbers of employers are contemplating restructuring because of their experience of home-working and facing the need to reduce numbers of employees. When these changes are implemented it is highly likely that they will generate disputes and litigation. HR teams in the larger companies are already preparing which is why the papers are full of grim announcements predicting large scale job losses with 25,000 jobs predicted to go at Heathrow, 17,500 at John Menzies and 15,000 at Airbus. These are the front runners amongst household names, but they signal that similar problems exist throughout the economy and many of the businesses will not have sophisticated mechanisms in place to deal with the problem. The chancellor has put into place a number of schemes to assist and there will be more in his next budget but the fact that he is now looking to double the number of job-centre staff is all the warning one needs of the scale of the anticipated reduction in employment. Whilst using the word inevitable is usually ill-advised the scale of the problem seems self-evident.

Discrimination

In addition to levels of employment falling other workplace issues are also pending. When furlough ends, they too will lead to discontents and disputes generated by the lockdown. In particular, according to the Guardian, evidence exists that women throughout Europe are being hit particularly hard by the economic impacts of the coronavirus and that many women are suffering from “interrupted” careers, with the lockdown putting their work progression on hold. This factor is also likely to foreshadow an increase in discrimination cases as, whilst the virus is the cause and not discriminating on the ground of gender, the way in which employers react is an entirely different factor.

Other sectors

Many other sectors are also likely to be affected in the same way. In property landlords are being denied rent and some of this is because tenants are taking advantage. Not all landlords are the size of Land Securities. Even if deceit is involved in only a minority of cases the piling up of debt is going to generate disputes. Insurance companies and suppliers of goods are relying on force majeure clauses to deny claims and every such policy is likely to come under scrutiny. Other suppliers of services are refusing to return payments made in advance. In commercial contracts failure to meet performance covenants is another area likely to produce claims.

Preparing to resolve using mediation

There is no doubt that claims are often resolved more successfully, more quickly and for less expense by mediation rather than litigation. In the workplace mediation can often preserve employment in a way that grievance procedures rarely do. In addition, in workplace cases,  see here how grievances can often be used to make mischief for employers and gain leverage

Action

Many businesses have no established processes to direct dispute resolution towards mediation, but they would be well advised to put this option in place. There is still time to do this before the furlough scheme comes to an end. Employers would be well advised to create, as a preferred alternative to a grievance process, a mediation alternative. For guidance see here how to set this up in-house.
For others where the size of the business does not warrant that exercise establishing links to experienced external mediators is the route to take.

Stranger danger

Some employers do not want to allow ‘strangers’ to view their unpleasant or private problems but they should be reassured by the fact that confidentiality is at the core of the practice of all ethical mediators. Whatever the nature of the dispute nothing said in a mediation is for public consumption or press notice.

Lack of adequate preparation is one of the key criticisms that faces government. Let it not be so in your business. Now is the time to avoid that mistake.