Mixed-Practice Mediations

Bridging the gap by combining lawyers and accountants

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Introduction

• Dispute resolution at the ICAEW – Fee arbitration service

– President’s appointment scheme

– Conciliation

– Mediation

– Resolving Commercial Disputes

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History of dispute resolution at ICAEW (1)

• 16 years ago -conciliation introduced as an alternative to investigation to address complaints

• Recognised that members should be given the chance to ‘put things right’ where they have not acted as expected of them under the Institute’s bye-laws

• 85% success rate

• Practical resolution for the client

• No disciplinary record for the member

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History of dispute resolution at ICAEW (2)

• Conciliation is limited– only for members

– only where disciplinary liability identified

– legal action was the only alternative

• Paul Turner recognised that mediation was the answer to help members resolve client/firm disputes

• Mediation Service was created with conciliators and then other staff being trained as mediators by the ADR Group

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Case study 1

• Two-person partnership

• Business and personal relationship

• Each had prepared cessation accounts

• Neither agreed the other’s figures and detailed technical argument was presented

• Spreadsheets and projection used to expose key issues

• Conclusion – two mediators can do more analysis

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Case study 2

• Client involved in litigation engaged member to produce an expert’s report

• Argued report was of such poor quality that it was worthless and impeded the clients ability to get legal aid

• Technical arguments of the member were tested and found wanting by the accountant on the mediation team

• Conclusion – two mediators provide wider skill-set

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Case study 3

• 20+ partnership going into dissolution

• Three mediators sifted them into four factions

• Saved firm, created a new one, provided for a fixed-term consultancy and an early retirement

• Conclusion – the number of mediators varies depending on the needs of the mediation

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Advantages of co-mediation

• The mediation team can represent the parties’ diverse characteristics; ie, male/female, older/younger

• There is a better chance of creating a sense of trust with at least one of the two mediators

• The parties have the advantages of the combined skills of two mediators; the skills normally enhancing and complementing each other

• Co-mediators can model co-operative problem-solving either as a check on the mediators’ biases or, indeed, shortcomings

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Advantages for the mediators

• Eases the load and tension on the mediator

• Tasks can be comfortably divided

• A team is less likely to be ‘co-opted’ by a party to the dispute

•Mediators can benefit from the opportunity to explore options before discussing proposals with the parties

• Two caucuses can take place simultaneously

• Can accelerate the pace of the mediation

•More likely to achieve the benefits being sought

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Co-mediation dangers

•Mediators seen as experts

•Mediators asked to judge arguments

•Cost

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Mediation in the financial world

• USA– Financial Industry Regulation Authority

• Australia– Australian Securities and Investments Commission

• Hong Kong– Investment Products Disputes Mediation Scheme

– Commercial Mediation Scheme Pilot

• UK– Finance & Leasing Association

– Resolving Commercial Disputes

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Resolving Commercial Disputes

• ICAEW and ADRg recognised – the benefits of co-mediation

– the need for mediators to match the challenge of the FTSE 100

• ICAEW and ADRg interviewed a number of lawyers and accountants and created a panel of 20 leading figureheads in law and accountancy

• The service was launched this summer

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Resolving Commercial Disputes panel (1)

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Resolving Commercial Disputes panel (2)

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An effective co-mediation team can (1)

• enhance the expertise, insights and listening capacity of the parties who may possess diverse backgrounds, professions and ethnicities

• increase the patience and perseverance of the mediation team by sharing the burden

• create balance in the mediation team due to the diversity of mediators

• provide a model for the parties of effective communication, cooperation and interaction

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An effective co-mediation team can (2)

• multiply the linkages that different parties can develop with the mediators, increasing the stamina and tolerance of the parties who are given a second voice and perspective

• allowing one mediator to take a risk while having the other available to come to the rescue, and

• make the mediation more effective by the division of tasks between the mediators.

The service is the first of its kind to

combine the expertise of both lawyers and

accountants. I firmly believe that by

bringing together these two highly

regarded professions we are providing a

unique way of resolving commercial

disputes. The service offers cost-effective

and quicker solutions to avoid expensive

litigation.

‘‘

Michael Izza, Chief Executive of the ICAEW

To fully understand the complex

commercial issues often at stake and to

find a solution requires not just knowledge

and experience but also innovation. The

panel we have brought together has all

these skills and companies who use it will

have access to some of the best legal and

financial acumen -as well as boardroom

experience -available.

‘‘

Mike Lind, Managing Director of ADRg