Mediation

A Brief Guide to Costs Mediation

Summary

I have undertaken mediations as a participant for nearly 30 years, and now I conduct mediations in costs disputes.

This guide explains what costs mediation is, how it works, and why it can be a better way to resolve costs disputes than going to court. Mediation is a private, flexible, and often quicker and cheaper process. It can be used in all kinds of disputes about legal costs—between the parties to litigation, between solicitors and their clients, and even involving litigation funders. We explain what mediators do, what happens on the day, and the difference between facilitative and evaluative mediation. The aim is to give you a clear, practical understanding of how mediation can help resolve costs disputes.

Understanding Costs Mediation

Disputes about legal costs are common. They happen between opposing sides in litigation, but also between solicitors and their own clients. Sometimes, third parties like litigation funders or insurers are involved too. These arguments can drag on, cost more money, and create further stress for everyone involved.

Mediation is one way to bring these disputes to an end without the need for a full court hearing. It is not a formal trial, and there is no judge. Instead, it is a conversation managed by a neutral person—the mediator—to help the people in the dispute come to an agreement.

What Is Mediation?

Mediation is a structured negotiation. It is voluntary and confidential. Each side is encouraged to speak openly, knowing that what is said cannot be repeated in court. The mediator does not give legal advice or make decisions. Their job is to help both sides understand each other and explore possible solutions.

Costs mediation is suitable for many different types of disagreement, including:

Between the winner and loser in court, about how much should be paid in costs.
Between a solicitor and their own client, about fees, retainers, or disbursements.
Between a litigation funder and a lawyer or client, over what is owed or recoverable.

Disputes like these can happen at any point: before a claim starts, after it settles, or after judgment. Mediation can happen early, late, or even after other attempts to resolve the issue have failed.

Why Choose Mediation?

There are good reasons to consider mediation for costs disputes:

It saves time

Going to court can take months or even years. A mediation can often be arranged in a matter of weeks. Most last just one day.

It saves money

Litigation is expensive. Even a one-day detailed assessment can cost more in preparation and representation than a full day of mediation.

It gives you control

In court, a judge decides. In mediation, the outcome is up to you. You can walk away at any time. You do not have to agree to anything unless you want to.

It is confidential

Everything said in a mediation is private. This allows both sides to speak freely, explore options, and avoid embarrassment.

It is flexible

You are not limited to what a court can order. You can agree staged payments, discounts, future arrangements, or anything else that works for you.

It preserves relationships

Court hearings often damage relationships. Mediation is more respectful. Even when people disagree strongly, the process allows space for understanding and repair.

What Does a Mediator Do?

The mediator is an independent person with no stake in the outcome. They manage the process, not the content. They:

Speak to both sides before the day to understand the dispute.
Make sure each side has someone present who can settle.
Explain how the day will work.
Help each side reflect on their position.
Test whether proposed outcomes are realistic.
Move between private meetings (called caucuses), helping the negotiation move forward.

A good mediator will listen carefully, speak plainly, and know when to challenge or when to support. Many are trained lawyers, but they do not act as lawyers during the mediation. Their job is not to advise, but to help you find your own solution.

What Happens in a Costs Mediation?

Mediations usually follow a basic structure, though the exact details can vary depending on what the parties need.

1. Choosing the Mediator

One side usually suggests mediation. If the other agrees, both sides can exchange names or agree a shortlist. Once a mediator is chosen, a date is set.

2. Mediation Agreement

Before the day, both sides sign a simple agreement confirming that:

The mediation is confidential.
The mediator is neutral.
The process is voluntary.
Nothing said or done can be used later in court.

3. Preparation

Each side sends the mediator a short document explaining their view of the dispute. This usually includes:

A summary of the facts.
The history of any offers.
What outcome they are hoping for.

Sometimes, the mediator will call each party in advance. This helps to set expectations and identify any practical concerns.

4. On the Day

Most mediations last one day. They usually begin around 10am and finish by 5pm.

Each side has their own room. The mediator moves between the rooms. Sometimes there is a joint session at the start, where each side gives a short summary of their case. Sometimes the whole day is spent in private meetings.

The day is informal. There are no set speeches, no cross-examination, and no fixed order of speaking. But it is structured. The mediator will guide the day through different phases:

Opening sessions: Explaining how the day will work.
Information gathering: Learning what matters most to each side.
Testing ideas: Exploring what might be acceptable.
Negotiation: Exchanging offers and proposals.
Agreement: Writing down and signing what has been agreed.

If a settlement is reached, it is usually written up by the lawyers before the mediation ends. That agreement is legally binding.

If no settlement is reached, nothing is lost. Often, people settle in the days or weeks after a mediation, once they have had time to think.

Facilitative vs Evaluative Mediation

In most mediations, the mediator does not give a view about who is right. This is called facilitative mediation. The mediator helps the parties explore their own views and look for common ground.

Sometimes, the parties ask the mediator to give an informal opinion about what a judge might decide. This is evaluative mediation. It can help when the parties are stuck or when one side is being unrealistic. The mediator might say something like, “I think a court might award closer to £80,000 than £100,000”. But the mediator’s view is not binding.

The key difference is this: in facilitative mediation, the mediator manages the conversation. In evaluative mediation, the mediator joins the conversation. Which approach is best depends on the case and what the parties want.

What Sort of Costs Cases Are Suitable?

Costs mediation can be used in a wide variety of cases. For example:

Between parties to litigation: After trial, one party may recover costs. If the amount is disputed, a mediation can settle the bill without a detailed assessment.
Solicitor and client: These can be difficult disputes. Clients may feel overcharged. Solicitors may feel unappreciated or attacked. Mediation can help clear the air and find a sensible outcome.
Funders and insurers: Third parties involved in litigation sometimes disagree with each other, or with the lawyers or clients. Mediation gives everyone a voice.
Group litigation: With many parties involved, the scope for costs arguments increases. Mediation can help identify and isolate the real issues.
Before proceedings: Early mediation can stop a problem from becoming a lawsuit. This saves money and helps preserve relationships.

How to Prepare for a Costs Mediation

Good preparation makes a big difference. Here are some tips:

Be clear about your goals. What do you want to achieve? What can you live with?
Know your numbers. Bring a costs schedule or breakdown. Be ready to explain it.
Understand the law, but don’t obsess over it. Mediation is not a trial.
Be ready to listen. You might hear things you did not know. Stay open-minded.
Bring someone with authority to settle. You must be able to make decisions on the day.
Think about what matters to the other side. What might help them move?
Consider possible offers in advance. Don’t make your first offer your best offer.

What Happens If There’s No Settlement?

Not all mediations end with an agreement. But that does not mean they are a failure. Often, the process helps the parties:

Understand each other better.
Narrow the issues.
Improve future negotiations.

Even if the matter goes to court later, the mediation may have helped reduce costs and simplify the dispute. And sometimes, a deal is done shortly after the mediation, once emotions have settled and options have been considered further.

A Final Word

Costs mediation is a practical and effective way to resolve disputes. It is quicker, cheaper, and more private than going to court. It gives parties a chance to speak openly, listen carefully, and find common ground.

If you are involved in a costs dispute, whether as a party, lawyer, or funder, it is worth considering. It may not solve everything. But it often solves enough.

Please contact my clerk to see if I can help.