Mediation Videos - Transcripts

THE WHITCOMBE MOCK MEDIATION

Complete Consolidated Transcript – All Six Episodes

This document contains the complete transcript of all six episodes of The Whitcombe Mediation, compiled into a single reference document.

Episodes

Episode 1 – Pre-Mediation Calls

Episode 2 – Joint Opening Session

Episode 3 – Information Gathering

Episode 4 – Reality Testing and Options

Episode 5 – Shuttle, Negotiating and Corridor

Episode 6 – Agreement and Close

EPISODE 1 – Pre-Mediation Calls

INTRODUCTION – Robin Somerville and Stephen Walker

Robin Somerville 00:01

Stephen Walker 01:06

Thank you, Robin. Thank you for inviting me. I’m very keen, as you know, that mediation users try and get the best out of the process, so they can get the best outcome for themselves. So I’m hoping we can work together to do that today.

Robin Somerville 01:22

So the format of today is: we pre-recorded a mock mediation. It comprises of six episodes, and each episode is meant to represent one of the six stages of mediation. Each episode will have some good practice and some bad practice, and we’re going to watch the video and we’re going to stop the video whenever we see something that was particularly relevant-a good point or bad point-and we’re going to talk about it amongst ourselves.

Stephen Walker 01:48

Oh, that’s great because it’s easy to talk about mediation in the abstract, but to see it in practice in real time is much more helpful. I’m just a bit worried, Robin. We might not always agree.

Robin Somerville 01:59

Well, that’s the good thing because it’s an art, isn’t it? It’s not a science. So the fact that we have different different approaches and every case is different. So one approach might be better for one scenario, but different from another.

Stephen Walker 02:10

You’re right about that. We can agree on that.

Robin Somerville 02:12

We definitely can.

Stephen Walker 02:14

Good.

Robin Somerville 02:15

So the case study is based on the scenario set out in my book, Winning in Commercial mediation. It’s about a family, the Whitcombe family, and the Whitcombe family, Margaret and David, set up a hotel back in a few decades ago. David sadly passed away, leaving Margaret with around 60% of the shares in the business. There are three. They had three children. They had James, Sarah, and Helen. James is the managing director of the hotel. He owns around 25% of the business. Sarah also works in the hotel. She owns 5% and Helen doesn’t work in the hotel and also owns 5% So the dispute has arisen because Sarah is alleging that James has taken money out of the business, three quarters of a million pounds to buy himself his own hotel with company money, but not buying a hotel in the company’s name. She also says that he’s used company money to refurbish his home and other expenses, which she said is are not are not appropriate or not not appropriate. So she’s bringing a legal action. It’s called an unfair prejudice petition. That’s a model that you’ll be extremely familiar with. A way that people, a shareholder, can can right a wrong if they think that there’s been a wrong committed, and we’re here today as a mediation, as part of the litigation process, which has been paused to conduct this mediation to try and resolve the dispute in a commercial way, in an amicable way, and a way to try and avoid the the problems that familiar problems with the litigation system, the court system.

Stephen Walker 04:07

So on section 994 petition,

Robin Somerville 04:09

that’s the one.

Stephen Walker 04:09

And as we know, the courts don’t really like them. They want you to go to mediation if you can sort it out yourselves. They’re happy. That’s right.

Robin Somerville 04:18

And mediation has got an extremely high success rate, typically 75, 80 percent. I think is well known statistic in the industry. So, and even if you can’t get a settlement on the day, often the issues are narrowed. Then they might settle a little bit further down the road, or at the very least, the litigations is is much simpler.

Stephen Walker 04:40

Indeed, yeah, yeah. People have a better understanding of where they are and where the other side are, and hopefully they can find some common ground instead of just staying on the battleground the whole time.

Robin Somerville 04:53

And the costs of mediation pale into insignificance, don’t they, compared with the costs of going all the way to court?

Stephen Walker 05:00

Yeah, tiny fraction. Yeah.

Robin Somerville 05:02

Okay. So the way we’re going to start is we’re going to start with the pre-mediation meetings, which you’ll obviously be really familiar with. So mediation is going to take place in person at the International Dispute Resolution Centre in London, a world-leading centre for for resolving disputes. You and I are there very regularly, aren’t we?

BAD PRACTICE – Pre-mediation call: Robin with Sarah and Karen

Stephen Walker 05:22

Indeed, and they’re famous for their biscuits. They’re exceptional.

Robin Somerville 05:27

I try not to start because once I’ve started, I can’t stop.

Stephen Walker 05:30

Indeed, indeed.

Robin Somerville 05:32

So before the day of the mediation, most of the time it’s best practice to have a pre-mediation meeting. Yeah. That normally takes place on Zoom or some other form of remote technology, and so we’re going to start now with the two pre-mediation meetings. The first of which is with Sarah and her lawyer Karen.

Stephen Walker 05:53

Great. So let’s have a look.

Robin Somerville 05:56

Let’s look.

Stephen Walker 05:56

Yeah.

Sarah Whitcombe 06:02

It’s not a great start, is it?

Karen Baldwin 06:04

Well, I’ve got time. It’s okay.

Sarah Whitcombe 06:07

Okay. I’m

Karen Baldwin 06:08

sure he’ll be here in a minute.

Sarah Whitcombe 06:09

Yeah.

Karen Baldwin 06:11

You don’t have to be anywhere, do you?

Sarah Whitcombe 06:13

Um. Well, no, but no. Okay. Yeah, yeah. I know. You know. I get started. Are

Karen Baldwin 06:30

you comfortable? You know what you want to do. Yeah, yeah. I think so. Yeah, I knew you would have prepared. Well, Yeah.

Robin Somerville 06:50

Morning.

Karen Baldwin 06:52

Morning. Hello, Robin. Good to see.

Robin Somerville 06:54

Thanks for good to see you too. Really sorry, I’ve forgotten your names. What can you could you remind me? I’ve got the papers. Thank you so much for sending through the position statement. I haven’t had a chance to read them because I’ve been so busy. I was out last night at one of my clubs that I’m a member of. So, but please, please introduce yourselves.

Karen Baldwin 07:15

Sarah, and I’m Sarah’s barrister, and I’m Karen.

Robin Somerville 07:20

Thank you, thank thank you both. So, yeah, thank you for sending through the papers. Like I say, I haven’t had chance to read them yet. So I’m sorry about that. But I think it’s really important. I just tell you some basics about mediation, just so that so that you know how it works. So it’s a confidential process, so that nothing that we talk about today will be you can’t use it in court or anything like that, and then also it’s voluntary, so you don’t have to stay. You can you can go if you if you want to go, and if you’re able to come to an agreement today, then if we put it down in a in a piece of paper called a settlement agreement, I’m sure Karen can help help you that. Then then it’s binding. Obviously, you know we’re here to deal with the legal dispute that that you’ve that you’ve that you’ve brought, and I’m going to try my best to help you. So, was there any sort of information or anything that you wanted from from me, Sarah or Karen?

Sarah Whitcombe 08:18

Well, I mean, I I I just want a fair outcome for everybody, and just an acknowledgement that I’m a shareholder.

Robin Somerville 08:26

Okay,

Sarah Whitcombe 08:27

what I want,

Karen Baldwin 08:28

Robin. Just to clarify, you said later today, but we’re not doing this online today. We’re meeting in several days’ time. You’re right. I’m

Robin Somerville 08:38

confusing it. I’m confusing it with the next mediation because my diary’s so busy that I’ve got another one later, so I’m I’ve got confused there. I’m thank thanks for pointing that out, Karen. Sorry.

Karen Baldwin 08:47

Expect to see you at the IDRC on Thursday.

Robin Somerville 08:49

Thursday, yeah. Thursday. That was it. Yeah.

Karen Baldwin 08:53

Yeah. Yep. 10 o’clock. Definitely

COMMENTARY – Robin and Stephen discuss the bad example

Robin Somerville 08:55

10 o’clock. I’ll be there.

Karen Baldwin 08:57

Okay.

Robin Somerville 09:00

I’m going to the theatre that evening, actually. So hopefully we can get everything wrapped up by about 6o’clock. I’m going to Heather’s with my daughter, so it’s really important that we finish the mediation about 6o’clock. I’m sure that’ll be fine.

Karen Baldwin 09:14

I always encourage my clients to finish within the time that’s been allotted, if possible.

Robin Somerville 09:19

Brilliant, because obviously my fees go up. If we have to go into overtime, then you know. And if I had to cancel my theatre trip, there’d be extra fees to pay and so on. So my daughter be well annoyed with me.

Karen Baldwin 09:30

Understood. What I’d like to convey is that we are at the point of commencing litigation here, and we’re having this mediation before we issue. We’ve had a lot of correspondence with the other side, and we’ve not come anywhere close to settlement. We’re looking for something different from the mediation. Yeah.

Robin Somerville 09:55

Obviously, mediation is about compromise, so you’re going to have to give up something that you’re looking for, Sarah. To To get a deal, that’s obviously the whole. That’s the whole point. Otherwise, you’d just be better going to to court. Obviously,

Sarah Whitcombe 10:06

yeah, yeah. Well, like I said, a fair outcome for everyone is what I’d like.

Karen Baldwin 10:12

Oh,

Robin Somerville 10:13

good. Well, that’s what mediation’s all about, isn’t it, Karen?

Karen Baldwin 10:16

Absolutely, it is.

Robin Somerville 10:18

Okay. Any other questions? Or

Karen Baldwin 10:22

no, I don’t think so. Not for now. Thank you.

Robin Somerville 10:24

Okay. All right, Bob. Thanks so much. Really appreciate it.

Sarah Whitcombe 10:28

Yeah.

Robin Somerville 10:28

Bye. Bye. Well, Stephen, that was a disaster. I’m late. I haven’t read the papers. I don’t even know their names, and I’m much more interested in myself and my fees and my theatre trip than than what I’m there to help them with.

Stephen Walker 10:46

Absolutely, it’s a brilliant example of how not to behave as a mediator. These pre-mediation calls are very important. I think I don’t know about you, but I think they’re very important. It’s the first opportunity, usually, of the mediator getting to know the client and the client getting to know the mediator, and for the mediator to be talking about themselves rather than the client is the wrong way round.

Robin Somerville 11:15

I totally agree with you, Stephen. We’re trying to build rapport, start a relationship, to provide an environment where the parties feel able to share things with me on a confidential basis, and that is not how to do

Stephen Walker 11:28

It’s not. There was one point I thought Karen made that was useful when she said that she likes to try and encourage her clients to finish within the eight hours, and that is actually a sound point because although people think eight hours is a long time, it’s actually not, and they’re not eight equal hours, are they? Because people get tired, they get bored, they get frustrated. So it’s important to make the best use of the best hours, and this is one really the start of the mediation before the mediation day, and it’s been wasted.

Robin Somerville 12:02

Well, should we see how they respect reacts once I’ve left the room?

Stephen Walker 12:06

Let’s do that.

GOOD PRACTICE – Pre-mediation call: Robin with James, Margaret and Gavin

Sarah Whitcombe 12:10

Okay, well, that’s not what I was expecting.

Karen Baldwin 12:13

It’s not what I’d hoped for either. I will be honest.

Sarah Whitcombe 12:16

That was like talking to another lawyer. I mean, he didn’t ask anything that mattered. Anything about Helen?

Karen Baldwin 12:26

No, I’m disappointed you didn’t ask about Helen, but I will cover that off on the day. No information stands.

Sarah Whitcombe 12:33

I’m quite concerned, actually, to be honest.

Karen Baldwin 12:36

Well, I’ve had better starts, and I have to be honest. He’s not given the great account of himself. No, but don’t worry. It’s a full day that we’ve got for the mediation, and there are certain things I’ve got now from this call. Yeah, I know to prepare in a particular way and and and head off. So we’ll make absolutely sure that the Helen Point is absolutely right up there in central, and we’ll make sure that he really knows where you’re coming from and what.

Sarah Whitcombe 13:06

Okay, good because he’s more interested in going out.

Karen Baldwin 13:09

He did mention that more than once, didn’t he? It wasn’t ideal, and it’s genuinely true. I encourage us to finish within the time because it’s a long day and it’s tiring. Yeah, you know, by 6o’clock you’ll be done in, and you know it’s the professional thing to do to try and be focused, and and give it the energy within that time.

Sarah Whitcombe 13:28

Yeah,

Karen Baldwin 13:29

but yeah, I would have liked him to have given us the time that we really need it today, and be on you more of a chance to to say what you want.

Sarah Whitcombe 13:37

Yeah, yeah. Well, we’ll see.

Karen Baldwin 13:39

Yeah, we’ll see.

Sarah Whitcombe 13:40

Yeah,

Karen Baldwin 13:42

on Thursday.

Sarah Whitcombe 13:43

Yes, 1030.

COMMENTARY – Robin and Stephen discuss the good example

Robin Somerville 13:49

Morning, everybody.

Stephen Walker 13:51

Morning.

Margaret Whitcombe 13:51

Morning.

Gavin Dingley 13:52

Morning.

Robin Somerville 13:53

Morning, Gavin. Nice to see you again.

Gavin Dingley 13:56

Nice to see you as well, Robin. Thank you.

Robin Somerville 13:58

And James and Margaret, thank you so much for instructing me as the mediator in your cases. It’s a real privilege to be able to help people resolve their disputes. It’s it makes an impact on people’s lives, and you know I’m really fortunate to be able to play that role. Really, really grateful. I’ve been on the website, and you’ve got such an amazing hotel. It looks absolutely fantastic, and the the reviews are like out of this world. So, Margaret, you and David started this. I know. Thank you so much for the questionnaire. I’ve looked at it really carefully, and I can see the history. I’m really sorry to to hear about David’s passing. So so thank thanks you know for for for appointing me. So tell me, James and Margaret. Tell me a little bit about how you’re feeling today.

James Whitcombe 14:48

I think nervous, and never been in this position before. You know, so don’t really know how it’s going to go. I am hopeful we’re going to get somewhere, but just very, yeah, feeling very much like I’m on on on sort of uncharted territory at the moment. Yeah,

Robin Somerville 15:12

I think that’s really common, James. I think most people that come to mediation they they rarely do it more than once because most people don’t have disputes in their lives, you know, of this kind, and very often, so that that that’s quite understandable. And hopefully today, mediation’s got really good track record. Sort of 75, 80% of mediations are successful. So I’m really confident. Looking at the papers that you sent, that that we can make some progress, and we can get this behind you, and you can find a path to To move it on with it with your life and and Margaret, how how about you? Anything that you’re worried about?

Margaret Whitcombe 15:46

Well, I want it to end. I want my family back. I want James and the girls to be able to be in the same room as each other. I don’t want this really to be David’s legacy.

Robin Somerville 15:59

Okay. Well, I’m sure we can make progress today to make to you know make sure his legacy is something really positive and that the family can be proud of going forward. So, Gavin, was was there anything that you wanted to talk about specifically today? Any practicalities or any legal points or anything that you need to cover?

Gavin Dingley 16:16

I think we can address that a bit later, Robin. But I think this has been quite useful in terms of explaining to my client what today is all about, because I was initially quite sceptical, to be honest with you.

Robin Somerville 16:28

Okay, all right, lovely. Well, thank you so much again, and look forward to getting everything sorted for you.

Margaret Whitcombe 16:36

Okay, thank you. All right, thanks.

Robin Somerville 16:41

What do you think, Stephen? Have I done a better job this time?

Stephen Walker 16:43

Much better, much better, really. You ask them, by them I mean the two clients, what how they felt, which is important. You want to try and get them to feel that it’s their day; they can talk to you. Just one thing you didn’t say to them. It’s all confidential. I assume that’s been said somewhere else. But I find that you need to keep saying that, so that it’s reassurance. What I think what you’re trying to do here is reassure them, and you did, and you asked the barrister if he had anything to say, and thankfully, he didn’t have very much to say this time. No doubt that will come later, but I think the way that you highlighted oh David’s legacy as a aim to protect it, honour it, excellent,

Robin Somerville 17:44

brilliant. Okay, well that’s the end of the first episode. We can go on to the second episode and see how it goes at the at the joint opening session on the day of the mediation.

Stephen Walker 17:57

Ah, a joint opening session, right?

Robin Somerville 17:59

We’ll talk about that in a moment. We will,

Stephen Walker 18:02

right.

EPISODE 2 – Joint Opening Session

INTRODUCTION – Robin and Stephen on the joint opening session

Robin Somerville 00:01

Stephen Walker 01:54

Well, I know it’s the traditional way of doing things. You get into the room, people introduce themselves, the mediator then says their piece about why we’re here, tries to set the mood for settlement and the ground rules about confidentiality and so on, and then invites the people, each side, to say what they’d what they’d like to say, what their position is. Now that was very common. It’s how we all trained, but in my experience, they’ve been going out of fashion, even before COVID, when we all went on screen, and they really went out of fashion then. And the reason was that the lawyers, particularly barristers, could not resist the temptation to attack each other’s clients. And you know what it’s like when you’re attacked: your blood pressure goes up, your defences go up. It’s the exact opposite of what we want to happen at mediation. We want people to open up. So that traditional type of joint opening session is going out of fashion, and nearly every time I ask in my pre-mediation call, “Do you want a joint opening session? the answer is no. It’s the in the end, it’s not my decision; it’s the client’s decision whether they want

Robin Somerville 03:12

one. So I’m aware of some academic research where they looked into settlement rates, how likely a dispute was to settle, whether there was a joint meeting or not. And the academic research says that actually they’re more likely to settle if if there’s a joint opening statement. And I think perhaps one of the reasons for that might be the desire or the need, psychological need for someone to feel heard, and they’ve had their opportunity to say their bit and to be heard, as long as the other person sits there, listens, and it doesn’t descend into an argument.

Stephen Walker 03:47

Yes, I don’t know about the academic research. I know from my own experience there’s really no difference in settlement rates whether you start with a joint opening session or not. What I just want to emphasise is it’s very common, almost always, you to have a joint working session later, where you’ve got a particular issue and you get the people from each team who need to address it together, sometimes everybody gets together, and that’s very common, but not the traditional joint opening session because the joint working sessions are much more collaborative, not confrontational. You’re right about people want to feel heard, and the cliche is until they feel heard, they’re not going to hear you, the problem is that both sides may not want to hear each other, and you can’t force people to a joint opening session. You can only invite them. This thing about being heard as well-it’s usually the client who wants to be heard. Now, who do they want to hear? The other side, their opponent, the person who’s caused them grief, the lawyers on the other side, the mediator. Who is it? And quite often, talking to the mediator first to explain what they want to say helps them do that. They start to feel heard, and there’s nothing wrong later in the day in having a session where they do say their piece. It doesn’t have to be at the beginning, and the trouble is, as you rightly said, if it’s a negative, they feel better, but the other side doesn’t, and they respond, and both sides ending up feeling worse at the end of the joint session than they did at the beginning. That’s the worst outcome.

Robin Somerville 05:48

Well, let’s have a look at the first part. Part of this episode, which is where all of your fears come true.

Stephen Walker 05:55

Right.

BAD PRACTICE – Joint opening session

Robin Somerville 06:00

Okay, so we’re here today to do the mediation between the two parties. We had had those mediation pre-mediation meetings on Zoom the other day for each party, so just go through the ground rules. Everything’s confidential, both anything that we’ve talked about today in the joint meetings, and then afterwards in the private meetings. That’s all private and confidential. You can’t use that in any sort of court procedure, anything like that. You, if anything is agreed today, then we’re going to set it down in a in a document that both of the two lawyers will will have to draft, and it’ll be binding. Nothing’s agreed until everything’s agreed, and that will be binding if you if you sign it. But that’s pretty much all I wanted to say, just by way of an introduction. So over to you, Gavin.

Gavin Dingley 06:52

Thank you. So I appear on behalf of mr. and mrs. Whitcombe today. I just want to sort of set out briefly what our legal position is today, because I think it’s rather important. We are here because we feel that we have been wronged. The petition that has been put in the into court is, from my client’s perspective, wholly unjustified. We feel that many of the alleged facts in terms of breach of fiduciary duty are simply what what was the word that you used, James?

James Whitcombe 07:29

False.

Gavin Dingley 07:30

False. Yes, are false, and we feel that this is a blatant attempt to seize control of a family business, which has effectively been managed by my client for many years. He’s doing a very good job of doing that. We’re quite keen to sort of emphasise that. We feel that this entire petition is effectively a ruse to take control from James, he’s been doing an excellent job. We are obviously the majority shareholders, and we feel that this is just a fragrant attempt to get money out of the business when there’s just simply no need for that to happen. My clients are deeply upset about the fact that this has has got to this stage, but we’re ready to go to court, and we feel we have a very good case. So that’s really our position today. We feel that we have to be here, and we really want to push home the position as I’ve set out.

Robin Somerville 08:26

James, did you want to add anything?

James Whitcombe 08:29

Yes. Yeah. I I just wanted to be on record that I’m very disappointed that we’re here in the first place. You know, this is something I’ve dedicated my life to. It’s something that my dad built, and I’ve been in charge of it for 20 years. And instead of coming to me with any concerns, my sisters decided to go to lawyers, and instead file a legal petition against their own family, you know. And I think that has been enormously damaging. And even though, yes, I hope that today we genuinely can reach some kind of resolution, I want it on record that, in my opinion, the way that this has been dealt with has been an enormous breach of trust.

Sarah Whitcombe 09:19

That’s simply not true. I raised these concerns with you personally before Dad died, and you you told me keep quiet. Yeah, you you knew what was happening, and you asked me to cover it up.

James Whitcombe 09:35

None of that is true, and you know that isn’t the case. It is far more nuanced than that.

COMMENTARY – Robin and Stephen discuss the bad example

Robin Somerville 09:46

Looks like you’re all right, Stephen. This is a really good example where they’ve just the lawyers gone into lawyer mode. Comments have been made to wind the other side up. You could see her getting more and more annoyed as he carried on speaking, and we’ve taken a step back, haven’t we?

Stephen Walker 10:04

I think we have. I think we have. We’re here at mediation to try and make peace, not war. And this is well, the barrister certainly a declaration of war. Really, we want to go to court. Almost said we want to go to court. I think the mediator could have framed the conversation a bit better by emphasising that why we’re here today is to end up, if we can, with a better situation through agreement, through negotiation, and through litigation, a bit of a missed opportunity there by the mediator, I think. Yeah, not a good example. Also, a great example of how not to do

Robin Somerville 10:44

Well, we’ve got the second part, the good practice. So let’s see if we can recover, shall we, from until. It into a positive experience instead. Let’s do that.

GOOD PRACTICE – Joint opening session

Karen Baldwin 10:59

I would like to say something on behalf of Sarah Mitchell and Helen Carter, if I may. We are not here because my clients wanted to be in dispute with their family. We are here because serious concerns were raised, at great personal cost, through the proper channels, and were dismissed. The petition is the last resort of people who had tried everything else and exhausted all other opportunities. Sarah has given 15 years of her life to this, her professional life to this business. She has qualifications that she funded herself while working full time. She has held the title of finance assistant throughout. What she is asking for today is not vengeance; it is fairness. and an acknowledgement that the concerns she raised were legitimate. I should also say that I am acting for both Sarah and Helen Carter. Helen isn’t here today, but I have got her full instructions, and she can sign anything electronically that’s needed. Okay, so her interests are fully represented in this room today. We are genuinely here to find a resolution. We hope the other side is too.

Robin Somerville 12:26

Thank you, Karen and Sarah. Did you want to add anything to that?

Sarah Whitcombe 12:29

Yeah, I don’t want to damage what my father built. I just want to resolve this in a way that James and I can be in the same room as each other in five years’ time. That’s that’s what I want from this.

Robin Somerville 12:45

Margaret, we didn’t hear from you earlier. Was there anything that you wanted to add?

Karen Baldwin 12:48

I’m just disappointed it’s come to this. I generally want to also find a resolution, but I’m disappointed has come to this.

COMMENTARY – Robin and Stephen discuss the good example and close

Robin Somerville 13:00

Well, I’d like to say that from from everything, all the conversations I’ve had so far, without revealing anything confidential, that I’ve got every confidence that if people focus on problem solving and the future and trying to build a path for for all of you to move forward. I’m really confident you’ll be able to come to an agreement today to to do that to to find a path forward that you can both live with. Okay, so what I suggest now is we go back into our private meeting rooms and I’ll come spend the day from now on shuttling between the two rooms. Okay, thank you. So, Stephen, if you’re going to have a joint meeting, that’s how to do it. Karen, the barrister, she was acting as a mediation advocate in that example, which is something I know you don’t do, but I do. I do a lot of mediation advocacy, so filling Karen’s role there, and I think that was a really good example of how to do it. She didn’t focus on the legal aspects of the case at all. She didn’t focus on criticism. She focused on the positive aspects of of what they’re there for. Is that something you’d agree with?

Stephen Walker 14:10

I do. I thought it was a really good example of how to lower the temperature and get people to focus on we’re trying to get a peaceful outcome that both sides can live with, and also the mediator reinforced that towards the end what you said. So yes, that’s how it’s done, not how Gavin, I think it was, did it with his emphasis on the legals. They are important, but they are not the most important thing in my experience at most mediations, even commercial ones.

Robin Somerville 14:48

So at the end, I set out what would happen next: that we would go into private meeting rooms, and I would shuttle between the two rooms during the day. So, episode three, which is coming up next, that’s called the information gathering and part of the mediation. Let’s see if either party do better on that occasion, shall we?

Stephen Walker 15:08

Good, good idea. Good idea.

EPISODE 3 – Information Gathering

OPENING MONOLOGUE – Robin Somerville

Robin Somerville 00:01

BAD PRACTICE – Parts A and B – Post joint session and Sarah’s room pre-session

Sarah Whitcombe 02:38

Well, that wasn’t helpful, was it? I mean, he was just lying. James was just lying, as usual. And my mum was just sat there on his side of the table.

Robin Somerville 02:47

Stephen, I’m just going to jump in there. That’s a good point she’s making there, isn’t it? Why is Mum in the other room with you know they’ve three children and Mum’s with the son, and she’s got 60% of the shares, so she can actually do what she likes with this dispute anyway, without regardless of these people. So, what’s your take on that?

Stephen Walker 03:08

Well, it’s the you know use the cliche. It’s the elephant in the room, isn’t it? Mum actually controls the situation through her shareholding and the fact that she is the mother as well. But where do you put mum? Is she going to be on her own, a separate party with her own lawyer, or is she going to be in one of the rooms? Does she switch from one room to the other halfway through? That might cause real problems of confidentiality. Yes, but it’s a sort of a reality check here, isn’t it? Because mum is the 60% shareholder, and presumably she’s sitting alongside her son, who’s because he’s been running the place and is a 25% shareholder. So that’s where the power lies, and it’s a hard lesson for the two daughters who’ve got 5% One’s been in the company, the other hasn’t, perhaps to accept.

Robin Somerville 04:17

And these are the kind of issues that, as mediators, we’ve got to deal with all the time, because it’s not so much about the law often, is it? It’s about these kind of practicalities and the commercial relationships between the parties and the emotional relationships between the parties can often have a much more importance than than the actual legal issues.

Stephen Walker 04:37

Absolutely right, and of course, it’s what you’ve just said is even truer when it’s a family business, but the same thing applies when it’s not a family business. People have just been partners or shareholders in a business for for several years. They’ve got a relationship, but it’s not a family relationship. They haven’t got the childhood memories, and quite often in these things, don’t you find one shareholder, one sibling, thinks they the other. sibling has always been the favourite of the parents, and this is a time to redress the balance.

Robin Somerville 05:15

Yeah,

Stephen Walker 05:16

Anna.

Robin Somerville 05:17

Oh, let’s see how they deal with it, shall we? Let’s see how they deal with

Sarah Whitcombe 05:22

I mean, why? It was just oh, just so awkward, and just I don’t know. And they’re in that huge, massive room, and we’re stuck in this glass box. I mean,

Karen Baldwin 05:39

I don’t know if they’re still in that room. They’d probably be putting something similar to this. Oh yeah, it’s a very smart glass box. It’s lying. It’s really difficult. You did really well. It’s difficult, but look, here’s the thing: mediation-it’s not great at finding the truth and establishing the lies. How can we

Sarah Whitcombe 05:59

agree anything with somebody that lies?

Karen Baldwin 06:01

Well, my experience: people agree for their own reasons, okay. Agreeing a solution to your problem today doesn’t mean that you’re condoning James’s lies or that you’re buying into them. Okay, so we keep eye on the prize, which is to find a solution that works for you. Okay. Yeah. Okay.

BAD PRACTICE – Part C – Robin in Sarah’s room: straight to the legal position

Robin Somerville 06:36

Okay, so how did that go?

Karen Baldwin 06:39

Well, it was a start.

Robin Somerville 06:41

Okay. Well, what I’d really like to do now is focus on the legal aspects of the case and the numbers, so. So, can you set out? Make sure I understand the legal position. I’ve read the papers, obviously, but just from the horse’s mouth.

Karen Baldwin 06:54

Yes, yes. Our position. This business is run through a limited company, but it’s owned and managed by the members of one family, by and large, it’s run informally, and so my clients believed on the basis of consensus, trust, and confidence. Those elements have been destroyed, or at least gravely undermined by James’s actions in taking huge sums secretly out of the company. Okay, so a petition under Section 994 of the Companies Act completely appropriate. This is a classic Ebrahimi and Westbourne Galleries case. James’s actions have all been done in the context of allegedly managing the business, and they’ve demonstrably undermined the interests of Sarah and Helen as the minority shareholders. So the right relief we say is for them to be bought out with no minority discount, and that’s the correct course, and the correct valuation approach in the case of a quasi partnership. So valuation questions. I don’t think there can be any dispute about the value of the hotel itself, or the current mortgage position, or the networking capital position. The adjusted net asset value, therefore, will be just shy of 2.5 million. The goodwill is going to be more contentious. We say that you add back all of the cash extractions, which have been really significant, and this is important: add back not just the cost to the company of buying the additional hotel, but that should also be treated. The hotel, the additional hotel, should be treated as an asset of our company. That was an opportunity that was taken and was only open because of James’s involvement with our company, and so that asset should be coming in that adds a million pounds to the goodwill figure. Yeah, James is in clear breach of his director’s duties under Section 175.

COMMENTARY – Robin and Stephen on missing the interests

Robin Somerville 09:19

Well, Stephen, I walked in the room and I said I want to look at the legals, and this is meant to be an information gathering exercise, and I haven’t gained any information there that weren’t in the papers already. I’m totally missing the point of this part of the process, aren’t I?

Stephen Walker 09:39

Yes. What was interesting was that Karen took the opportunity to state the legal position, which was different from what she did in the joint opening session, where she was stating the non-legal, and so she won’t feel that her client’s legal position has been overlooked, and she explained it very well. But whether it was all in the papers, people like to repeat what they feel that saying something conveys the message differently and usually better than on paper, and they may be right. They may be right, but by going into the numbers right from the start, I think was a bit premature, bit premature, because we still haven’t got Sarah saying exactly what she wants, what shape assessment could look like, and we haven’t really developed Mum’s position, so far as Sarah is concerned, and that’s going to be crucial, I suspect later on.

Robin Somerville 10:52

And I think, as mediators, rather than positions, I think we always look at under the bonnet and look for what people’s interests are. I haven’t gained anything from that in that respect. No, I’ve missed missed that point completely.

Stephen Walker 11:04

You have, you have, yeah.

Robin Somerville 11:06

Well, let’s see if I make any more gaffs before this session’s out, July.

Stephen Walker 11:09

Right.

BAD PRACTICE – Part D – Karen continues: early offer

Karen Baldwin 11:13

We also take exception to the normalisation. Oh, the exceptional item they’re saying about goodwill. They’re treating that as normal. It’s absolutely not normal. Flood is a one-off act of God. We’re not going to accept any calculation on goodwill that doesn’t normalise past year’s trading, as you’ve seen from the papers, that’s a quarter of a million you get EBITDA. So we take that. There’s another point. Sarah has 5% shareholding. James has 25. Helen has five. They were all gifted their shares by David. There is no reason, meaningful reason, as things have turned out, for James to be getting 25% That was supposed to reflect his contribution. Well, you’ve seen what his contribution has been. We say the shareholding should be equalised. By my reckoning, that means 35% split, a third, a third, a third, 11, just over 11 and a half percent each, 11.67% to be precise. So that gives us a maximum claim for each of Sarah and Helen, 260,000, to reflect 5% shareholding, plus the additional equalisation of 6.67% That’s an additional 346,840 pounds. So you add those two together. You’re at 606 840. And then for Sarah, we’ve got the redundancy claim as well. We’re putting that at two years of salary, and salary, in this context, is what the salary should be at market rate. Again, classic indicator of a family-run business. Nobody’s being paid market rate. James isn’t being paid market rate either. So we say two years at 55,000. So her redundancy claim is 110. So the total claim for Helen and Sarah together is 716840.

Sarah Whitcombe 11:26

Yeah, please make it clear that this is our position, and we expect a serious response.

Robin Somerville 11:33

Okay, I’ll definitely do that.

Karen Baldwin 11:35

So, so what’s the initial offer then? If you think it will be helpful, yes, we’ll we’ll lead with opening offer. So, opening offer for Sarah’s shares 300,000. For Helen shares 300,070, 5000 for the redundancy for Sarah. Yeah, that’s us against 110. That’s a significant move, and we would like you to take that to the other side, please.

COMMENTARY – Robin and Stephen on going straight to offers

Robin Somerville 12:03

Okay, so 375. Okay, I’ll do that. All Right. Well, this is meant to be information gathering.

Stephen Walker 12:19

Yes.

Robin Somerville 12:20

And I have said expressly said, I want to cut all of that out. Perhaps the most important part of the whole mediation for the mediator to understand the dispute and understand their interests. I’ve gone straight to the negotiation stages. Is that how you would do it?

Stephen Walker 12:35

No. Early on, I ask, where would you like to be in three months’ time or three years’ time? Not asking for offers, just asking for where their expectations are. Also asking what shape should a settlement, what things have got to be included for you, and sometimes, of course, they’re not monetary at all. Sometimes they are things that only could be granted through negotiation. A court could never give them that. And once you start to get some of those things out, you can start saying, “Well, how do you think we might achieve that today? So yes, it’s getting what the what mediators call the underlying interests out, and then asking them how they think that can be achieved. You do want to get momentum going because you can’t spend five hours talking about issues and until half past three and then start exchanging offers. Sooner or later, you have to do that. But yes, put the put the interests on the table, let them think about it, and then when you’re out talking and having the same conversation with the other people, they can start be thinking about well how they’re going to actually make a proposal. But yeah, too quick, too soon.

BAD PRACTICE – Post-session – Sarah and Karen after Robin leaves

Robin Somerville 14:02

I agree. Well, let’s see what happens next.

Sarah Whitcombe 14:06

They didn’t ask me anything that mattered.

Stephen Walker 14:09

I know.

Sarah Whitcombe 14:10

He doesn’t know about the bank cover letter, about Thomas, about what Helen’s review found.

Karen Baldwin 14:17

No, no, he doesn’t. But this won’t be the last conversation we have, and we know. Those things matter, and we’re factoring them in to how we’re thinking about any proposal that’s coming back from the other side.

Sarah Whitcombe 14:34

Yeah,

Karen Baldwin 14:34

yeah. It’s three weeks, right? The bank is going to review.

Sarah Whitcombe 14:38

Yeah.

Karen Baldwin 14:39

Yeah. So. Yeah, we need to be able to tell them that it’s settled and the problem’s gone away.

Sarah Whitcombe 14:47

Yeah,

Karen Baldwin 14:47

you haven’t heard anything from the bank about the petition yet. They’ve not picked up on it. No. Okay. Well, let’s see. If they didn’t know yesterday, hopefully they don’t know today. Okay. And we can tell them before they find out that it’s it’s all sorted. Okay then. But yeah, yeah. Eye on the prize.

COMMENTARY – Robin and Stephen on Sarah not feeling heard

Robin Somerville 15:09

Well, there’s some golden nuggets in there that I totally missed by being so focused on straight into the you know the settlement because I want to go to the theatre early and I want to make sure it’s all done quickly. I’ve missed the really important things that might be the real drivers of this dispute, or at least form form the settlement, and what do you think? How have I left her feeling? Do you think?

Stephen Walker 15:31

I think that she’s still feeling shortchanged. She’s not really been able to explain how she feels about the whole thing and what she really wants, and she’s not been heard by James and probably her mum, and she’s not being heard by you. And part of your job is to make yourself available for her to talk to you, so she feels heard.

Robin Somerville 15:59

Well, let’s see if I can do a better job next time in the next room and find out what this bank issue is all about.

Stephen Walker 16:06

Yeah.

GOOD PRACTICE – Information gathering: James’s room

Robin Somerville 16:12

So, how was did you find the joint meeting?

James Whitcombe 16:16

Yeah, it was it was all right. It was a little tense, but you know, move on. Yeah, I noticed that they’ve they’ve got the bigger the room out out the two, have they,

Robin Somerville 16:29

James? They might have a bigger room, but look at the view, St Paul’s Cathedral.

James Whitcombe 16:33

Yeah, well,

Robin Somerville 16:34

swings and roundabouts. Well, I just wanted to stop here, Stephen, because in the previous session, do you remember that Sarah was complaining about being stuck in a glass box, and now James is complaining that they’ve got the nicer room. Is this a metaphor for how people, you know, perceive information differently?

Stephen Walker 16:58

I think it’s both sides wanting to be sure that the other side is not being treated better than they are. It’s all about this fairness, I think. Is it a metaphor? Well, it could be, but I think it’s just people not wanting to feel that they’re not. The other side have got better and more than they have, and that’ll come out in the negotiation as well. I should think.

Robin Somerville 17:25

Let’s see.

James Whitcombe 17:27

Yeah, I suppose so.

Robin Somerville 17:29

So, what I’d really like to focus on for this initial stage is just to gather some information, really. So, if I could wave a magic wand and like all of this dispute was to disappear, what what would the future look like? What what does the business look like in 18 months or two years time or so.

James Whitcombe 17:48

Blimey! Well, obviously up and running, and all the you know the the nightmare of the flood damage. You know that’s all gone, and we’re you know money’s coming in again. And in an ideal situation, I think so much because the size of our business, so much of it is to do with reputation. So Thomas, our chef, still being there because I think he’s actually quite a big part of that. And from a personal point of view, I suppose you know the the family not being at each other’s throats anymore. Ideally, yeah.

Gavin Dingley 18:55

but but you’re quite worried about what’s potentially going to happen here, though, aren’t you, Jake? Absolutely. I mean, you’ve been accused of a number of things which, rightly, as you as you told me, are completely unjustified, and we. Feel that those issues really need to be addressed, particularly the allegations about misuse of funds. Wouldn’t that be right?

James Whitcombe 19:14

Absolutely.

Gavin Dingley 19:15

I mean, they’ve they’ve deeply affected you, haven’t they, in terms of the ramifications of that, both personally and and in terms of how the business is going to deal with that. Wouldn’t that be right, George?

James Whitcombe 19:24

Yeah, and all the timings of it as well. You know, with the the covenant and all the other stuff that’s going on, and the fact that we had this added problem of the flood, you know, that that’s just added another layer of problems to this. So tell me a bit more about the the covenant and the flood, then. So tell me, what what do you mean about the covenants? Well, just that we did, you know, our takings this year are basically nothing,

Robin Somerville 19:46

right?

James Whitcombe 19:46

In terms of the flood, and and we we’ve got to start moving on this soon because the the insurance payout for that was just less than we expected, and so we’re just in this pit at the moment of of losing money. And what my sister has done is she’s, you know, she’s she’s just stirred that. She’s made it worse by not coming to me and keeping this as sort of a an internal family thing that we could have worked through, and I think that’s where my anger comes from,

Stephen Walker 20:13

really.

Robin Somerville 20:14

And the Covenant Review, I think, is is it given three weeks’ time? The Covenant Review, is there a clause in there about something about you have to disclose disputes or something? Is that right?

Gavin Dingley 20:24

Yeah, there is something in that. I think one of the other things that we were just sort of pivoting towards would be how we deal with that in the context of resolving this dispute. I know that James has some anxiety about that. We weren’t the ones who brought this petition at the end of the day. No, it came as a bit of a surprise to you, didn’t it?

Robin Somerville 20:42

And and what would the impact of the breach of the covenants be with the banks?

James Whitcombe 20:47

Yeah, there’s all of a sudden, the banks would be, I think, far more interested in sort of looking in in a more sort of forensic manner into our finances, and you know, there’s there’s a sort of question of tax liability stuff like that. It would it would just be another layer of just pain we’d have to go through, and it couldn’t have come at a worse time.

Robin Somerville 21:12

And how do you feel about somebody looking into the finances? Relaxed about that, or

James Whitcombe 21:19

I’m not concerned with any sense of it being you know they’re going to find things out that have been done badly. But it just you know we are in a pretty poor state at the moment because of things that have happened that are beyond our control, and I could do without that.

Gavin Dingley 21:34

It’s not that we have dead bodies to hide, wouldn’t it? No, God, no. But we just, as with any business owner, you have a certain degree of anxiety when HMRC are deciding to yeah

James Whitcombe 21:42

absolutely into

Gavin Dingley 21:43

something. Who

James Whitcombe 21:44

wants to be audited by HMRC?

Robin Somerville 21:47

And Margaret, what does the future look like for you?

Margaret Whitcombe 21:50

Well, I need my income back. When this dispute started, my dividends stopped. I’ve got the house. I can’t sell the house, so I’ve got no money coming in. I’m actually worried about the money in a way I haven’t really spoken to anyone before. I actually also want my family. I want them back together. I want them to be able to be in the same room together. I don’t really want this to be what David’s life has amounted to. I mean, these are my feelings, so I haven’t really expressed it before. But

Robin Somerville 22:24

and and if that income situation was to stay the same, what what impact would that have on on you going forward?

Margaret Whitcombe 22:32

What without having an income? Well, that’s not a good situation. I I rely on that. I don’t know whether David you’ve thought about it in that way.

James Whitcombe 22:47

No.

Margaret Whitcombe 22:47

I think it was important to say though. So

James Whitcombe 22:51

no, I’m. Yeah, I’m glad you did actually. I’m sorry I didn’t appreciate quite how how serious it had got for you. Another reason why, of course, we want to kind of get this moving and get it resolved. And yeah, I’m sorry about that, Mum.

Margaret Whitcombe 23:06

Thank you.

Robin Somerville 23:09

Okay, I’ll I’ll leave you to it now. I’ll go and speak to the other side for a while. Well, Stephen, there’s a lot of information there. We’ve got flooding. We’ve got financial difficulties. We’ve got the bank. We’ve got the son, who seems to be really pivotal as the chef, who’s really material in the in the business. We’ve got Margaret’s money concerns. Where of all of those issues that I’ve just described, where where are they in the papers?

Stephen Walker 23:39

Well, presumably the flood was mentioned. Yeah, but yeah, probably not. And so, what you did, if you don’t mind saying so, was what I described earlier as sort of asking people what the future is, what’s the shape of the settlement, without asking for offers, and now you’ve identified the real drivers, the real concerns, especially it seems to me three. I don’t know whether you agree, Margaret and her. Income, the bank, and the chef-I mean, all of those are existential threats to the business. Well, people better focus on that.

Robin Somerville 24:22

And we often say, don’t we, that the dispute’s not about what they say it is; it’s about something completely different. And isn’t that exactly what’s going on here. I

Stephen Walker 24:30

think you’re right. I think you’re right.

Robin Somerville 24:32

Well, let’s see if that produces a shift in their thinking. Once I’ve left the room, let’s see what they talk about after I’ve gone.

Stephen Walker 24:38

Yeah.

Gavin Dingley 24:39

So, how do you think that went?

James Whitcombe 24:43

Well, yeah, good. I think actually. I mean, he’s slightly wrong footing me. I wasn’t really expecting to be asked quite those questions, and I’m also just reading a little bit from what Mum just said. Yeah, no, no, no, no, no. I’m, I’m really glad. Um, yeah, I’m sorry. I didn’t, I didn’t realise quite how much of an effect this was having on you. So, we will, we’ll sort this. Okay, we’ll get it sorted.

Gavin Dingley 25:07

Do you feel that there are any particular points that you really want us to push towards him, or

James Whitcombe 25:13

Gavin Dingley 25:15

you want to sort of play it by ear as it goes?

James Whitcombe 25:17

I guess I’m slightly wrong foot at the moment, so yeah, maybe playing it by ear is a better idea. I’m sort of, yeah, the wind has slightly been taken out of me at the moment. Shall

Margaret Whitcombe 25:25

we see what they’ve got to say as well? Yeah, that might be a wise

Gavin Dingley 25:27

decision. Yeah, let’s see what he comes back with, and we can sort of make a decision. I’ve made a few notes, obviously, as we’ve been going along. So let’s have a have a think about what he comes back with, and we can sort of play it by him. Yeah, sound like a plan.

James Whitcombe 25:40

Okay, yeah, sounds good.

Robin Somerville 25:42

Okay, so we can see he says he’s taking the wind at ourselves. He’s wrong-footed me, so that might be a fundamental shift in their thinking. So instead of being obsessed about the legals and what the legal rights and responsibilities are, or who’s going to win or who’s going to lose, aren’t they beginning maybe to focus on what’s more important? And maybe now that we might get some progress in terms of settlement further down because they’ve got a shift in thinking,

Stephen Walker 26:10

I think you have achieved that through the indirect questions that you asked. You’ve now got them focusing on some real problems for them, and they’re not quite sure what to do because they hadn’t thought about it beforehand, as they made clear they should have done. But you’ve now got them thinking.

Robin Somerville 26:32

And I think preparation or failure to prepare seems to me to be the major cause of when something doesn’t settle. It’s because one or both of the two parties have failed to think about mediation properly, failed to analyse the real situation, the commercial situation properly, and that means they come to mediation. They haven’t thought these things through. Then they spend hours having to get to grips with, waste all of this precious time that they have at mediation. Sometimes I can leave a party in a room. They say, “Can you come back in a bit? And then an hour later, not exaggerating, an hour later, I’m still outside the room because they’re still processing. So preparation, would you would you agree that’s a key issue? Absolutely,

Stephen Walker 27:15

but I think you have to have some sympathy, both for the lawyers, and and also for the clients because these are difficult situations. Someone really doesn’t want to think about it, and so they put it off, And the lawyers may not be given the instructions; they may not be given the money, because often cash flow. So I think you have to be a bit understanding. But you’re right; the better you’re prepared, the more chances are that you’ll get a settlement on the day which you will like.

Robin Somerville 27:51

And I think it’s so incumbent on the lawyers. I do sympathise, but it’s so incumbent on them to make sure that the the client’s looking at the right things, and to be bold and to be and give their best advice about making sure bringing them back to to how to how this thing might get settled. Yeah,

COMMENTARY – Robin and Stephen wrap up and introduce Episode 4

Stephen Walker 28:09

I agree.

Robin Somerville 28:10

So, Stephen, in this episode, we’ve been looking at information gathering. The next episode, episode four, that’s going to be all about reality testing. So, we heard James and his lawyer just a moment ago talk about there’s no skeletons in the cupboard, nothing to worry about on the financials. He’s got three quarters of a million pounds he’s bought his own hotel with, with company money. He’s taken other money out of the company. Not quite sure what the taxman might have to say about that. So I think at the next stage I’m going to have to ask him some questions about that, just to see how serious that is. And this can go badly sometimes, can’t it? When you start challenging people?

Stephen Walker 28:51

It can. We call it reality testing. Is often the interesting part of the of the mediation, but it’s vital because you need to sort of get the the real issues. Good points and bad points into people, the front of people’s minds, preferably out in the open before you can start meaningful negotiation. Well, that’s my experience anyway. Let’s see, shall we? Let’s see.

EPISODE 4 – Reality Testing and Options

OPENING MONOLOGUE – Robin Somerville

Robin Somerville 00:01

BAD PRACTICE – Reality testing: Sarah’s room

Sarah Whitcombe 02:56

Well, Karen’s told me that I’ve got a 70% prospect of success.

Robin Somerville 03:00

Right. Okay. Well, you can’t both be right, can you? So, where do you where do we go from here?

Karen Baldwin 03:14

Well, the petition’s filed. The litigation process is really clear. We have a conditional fee arrangement under discussion.

Sarah Whitcombe 03:27

Helen’s offered to fund it.

Karen Baldwin 03:29

She has as well.

Sarah Whitcombe 03:30

Yeah.

Karen Baldwin 03:31

So, if if that’s what it comes to, we’re ready to proceed.

Robin Somerville 03:38

So your best alternative to a negotiated outcome is is basically to litigate. That’s right.

Karen Baldwin 03:43

Yes,

Sarah Whitcombe 03:44

it is. Sorry, this is George. Hello. Yeah. Okay.

Robin Somerville 03:56

Who’s George? Who’s George?

Sarah Whitcombe 03:58

Yeah. Oh, we are.

Robin Somerville 04:01

Okay.

Sarah Whitcombe 04:02

We’re not going to him. It’s going well. So,

Robin Somerville 04:06

what’s the husband’s position on it?

Sarah Whitcombe 04:09

We will. Yes, she’s doing a great job. So, I think it’s yeah. Okay, we’ll do. Yeah, I’ll let you know. Bye. Thanks. Okay. Yeah. Bye. Bye.

Robin Somerville 04:29

Okay. So, best best alternative just to carry on litigating. I think you said Helen’s going to fund it.

Speaker 1 04:36

Is that right?

Robin Somerville 04:37

Okay. Well, I’ll just tell him that then, shall I? Just I’ll just tell him that you’re going to litigate, and that’s the end of it.

Karen Baldwin 04:45

That would seem to be the only alternative. Yes.

COMMENTARY – Robin and Stephen on the 70% problem

Robin Somerville 04:48

Okay. All right. Thanks. Oh dear, Stephen. All I said was you can’t both be right. You best litigate. That was the extent of my so it was aggressive, adversarial, unhelpful. Is there any saving saving grace in there, or is it just complete car crash?

Stephen Walker 05:11

No, I mean, when both sides are telling you they’re going to win, they both can’t be right. They can both be wrong. It’s a brutal truth, and you exposed it. You could have done a bit more following the exposure, but yeah.

Robin Somerville 05:30

How common would you say that both sides say they’ve got great prospects of success to you? So you got both rooms saying, “Oh, we’ve got 60% or we’ve got 70% chance of success. Is that common?

Stephen Walker 05:41

I reckon both sides tell me they’ve got between 60 and 70% chance of winning in 70% chance of mediations. I think.

Robin Somerville 05:52

Yeah, I agree, and it is true they can’t both be right. You know, trials are binary. Someone’s going to win, someone’s going to lose, so someone’s not right.

Stephen Walker 06:01

That’s nearly always the case, and of course you don’t necessarily always win 100% or always lose 100% There is sometimes a middle ground, and that’s often where you start to find the the deal zone for negotiation.

Robin Somerville 06:16

Okay, let’s let’s let’s carry on watching. Yeah.

GOOD PRACTICE – Part A – Karen’s pivot line post-session

Sarah Whitcombe 06:27

That was better. Yeah, I think we have a strong case.

Karen Baldwin 06:32

Yes, Sarah, I remain really confident about the legal and the litigation position. And I stand by my advice to you of the 70% chance of success. But here’s the thing: I’d like you also to consider my mediation advice. The value to you of a settlement today might very well be more than the value of the best litigation outcome in 18 months’ time. Does that make sense?

Margaret Whitcombe 07:15

Yeah,

Sarah Whitcombe 07:17

I know. I just I need James to acknowledge what he did. I’m not settling just to make it go away.

Karen Baldwin 07:29

That’s what the recognition clause that we drafted and talked about before. That’s what that’s to do. And we’re not going to be settling unless that point is taken care of, okay. Eye on the prize.

COMMENTARY – Robin and Stephen on Karen as a good mediation advocate

Robin Somerville 07:53

Stephen, she is such a good mediation advocate. She’s just done exactly what I should have done, hasn’t she?

Stephen Walker 07:59

Absolutely, absolutely. She’s reassured. Reassured. She’s also warned that 70% chance is not 100% chance, and she has made it clear to her client who wants to hear this that the recognition point is upfront and will will not go away. It will be part of any settlement. Absolutely right.

Robin Somerville 08:31

And she also said something interesting there. She said a mediated settlement might be better, even if you go on to win at court, which isn’t that true.

Stephen Walker 08:40

Oh, I think I thought she put that really well. A settlement now could be worth more than your best day in 18 months’ time, and she uses this phrase, “eyes on the prize. It’s one I use.

Robin Somerville 08:50

Me too. Let’s see what happens in the other room.

Stephen Walker 08:54

Right. Hi

GOOD PRACTICE – Part B – Reality testing: James’s room

Robin Somerville 09:05

again. Thank you for your patience whilst I was with Sarah there. I just wanted to speak a little bit more about something we spoke about earlier, which is this banking covenant.

James Whitcombe 09:17

Yeah.

Robin Somerville 09:17

I know you said that you weren’t too bothered about the forensics and so on, but can I just ask you a bit more about what would the impact be of the covenant?

James Whitcombe 09:26

As you say, it’s not anything that we’re worried about. We’re not hiding anything. It’s more that when, if this isn’t resolved, then you know the bank could easily get spooked. You know they could see us as you know breaking the covenant, and therefore, you know, financially things could get bad quite quickly. And if that also becomes known in terms of our staff and our suppliers, you know, as I’ve said many times before, that the reputation of a business like this is so important. You know, if we lose that, people can just walk away from us, and it can spiral out of control very quickly. I think that’s in terms of the government. That’s the bit I’m worried about losing control of a situation, and it just goes downhill so quickly.

Robin Somerville 10:10

Margaret, what do you think about if the staff got wind of this and the suppliers? What impact do you think it would have?

Margaret Whitcombe 10:16

Well, yes, negative. I would say. I mean, we have a reputation, don’t we? Yeah. We worked so hard to build that reputation? Yeah, that’s not good. And

James Whitcombe 10:28

Thomas, our chef, is sort of being the the son, you know, of of my sister. It it just adds an extra layer to it as well because if he goes, he’ll make sure everybody knows why, you know, according to him, and yeah, I can just see a situation where this just falls apart.

Robin Somerville 10:45

He’s a good chef, right?

James Whitcombe 10:46

He’s an amazing chef. I really want to keep him. You know, I don’t want to have any kind of a bad feeling between us as well. We’ve always got on very well, both as family members, but also as people who work together. And I, I am desperate to maintain that. You know, he’s very much a cornerstone of the business.

Robin Somerville 11:02

What impact on the restaurant do you think it would have if he left?

James Whitcombe 11:06

We’d have to start from scratch, you know. People come because he’s the chef, and I’m not saying that we couldn’t we couldn’t get there again. But I don’t want to have to start again. You know, what he’s created, and we’ve given him an awful lot of licence to be creative, though I think he’s done an incredible job, and and I’d say that is at least half the reason why people come to stay at our hotel.

Robin Somerville 11:29

Okay, Gavin, in terms of generating some options like a shape of a settlement, have you had any any thoughts?

Gavin Dingley 11:37

No, because at the moment we just we feel that we’ve got a really strong case. I think you know. The reality is that this matter is going to be resolved between 12 and 18 months. I don’t see at this stage why we would necessarily need to do that. Yeah. Sorry. Do you think it

James Whitcombe 11:50

would take that long?

Gavin Dingley 11:52

Yeah. I mean, the reality of the court system at the moment is. I thought we discussed this previously, but just just to reiterate, I mean, even if you have the strongest case in the world, you’re looking at minimum 12 to 18 months for a decision.

James Whitcombe 12:05

And you think we do have a strong case, though?

Gavin Dingley 12:07

I do, but I think the the problem that you have here is it’s the 12 to 18 month window, isn’t it?

Speaker 2 12:13

Yeah,

Margaret Whitcombe 12:13

absolutely.

James Whitcombe 12:15

Especially with what Mum has just said as well previously. Okay.

Gavin Dingley 12:20

I mean, it doesn’t detract from the strength of our case, let’s just be clear about that. Yeah.

James Whitcombe 12:23

Okay.

Gavin Dingley 12:23

But I think this is a sort of reality check for you to think timeframes. What are we looking at, and and how long it’s going to take for us to to put to get vindicated on this? Really, I mean that’s just the reality of how long these things take.

James Whitcombe 12:40

Right. Shit. Okay,

Robin Somerville 12:44

Gavin, am I right in thinking that, and I’m not taking a view about the strengths of either party’s case, but if Sarah was successful, am I right in thinking that the most common order a court would make would be a buyout order? Is that right? Where they would ask James to buy Sarah’s shares?

Gavin Dingley 13:02

Yes, that that would be the case. I think we haven’t spoken much about numbers at this stage.

Robin Somerville 13:07

Okay,

Gavin Dingley 13:07

and I haven’t sort of explained that to James in maybe the the layman’s terms is that that it needs to be in. But there is a trigger you could say that allows that to happen.

James Whitcombe 13:21

Yeah,

Robin Somerville 13:22

what does that shape of settlement look like to you? If you were to acquire Sarah and Helen shares, is that something that would be attractive to you?

James Whitcombe 13:29

I haven’t honestly given that an awful lot of thought, but I guess the moment I’m just seeing the barriers to it. You know, I don’t have that money. I don’t think that will be the problem with it, but I mean, in terms of in an ideal world, yeah, that that actually makes probably quite a lot of sense, doesn’t it?

Robin Somerville 13:53

And if you haven’t got the money now, do you think you might, over maybe a period of time, you might be able to fund it with maybe annual payments or borrow some money from the bank or something to make some payments, or

James Whitcombe 14:03

Potentially, I think I would just have to do things like try and yeah restructure the the mortgage, remortgage it if I have to. If that were possible, then yeah, yeah I might be able to. It’s slightly dependent on things like the the business picking up after all the damage that was caused, but yeah, that that actually might be doable as long as I could renegotiate.

Robin Somerville 14:30

Okay, well, Gavin, can I leave you some time alone with James and Margaret to see if that’s a flying opportunity? I

Gavin Dingley 14:37

think so. That’d be really useful, Robin, because at the time I need to sit down with them now and just go through sort of if that is an option that we’re looking towards, how we how we structure that and how we put that together from a legal perspective, and outline the risks and mitigation on on each side. I think would be quite useful. So we’d really appreciate the time. Great, I’ll leave you to

James Whitcombe 14:47

Yeah, is that doable?

Gavin Dingley 14:51

It is. I think we do need to have a chat about finances. I mean, but from a legal perspective, effectively, to be frank, what you’re looking at is the same two options, but in different forms, really, aren’t you?

James Whitcombe 15:00

Right. So I’m gonna I’m gonna be left at this argument potentially anyway. So

Gavin Dingley 15:05

I wouldn’t. I mean, I wouldn’t call it that, but I mean, the ultimate outcome, which one of the options the court can do, is exactly more or less what Robin suggested. So they

James Whitcombe 15:15

do it now, in our own time. Yeah. Okay. All right.

James Whitcombe 15:27

Okay.

Speaker 3 15:28

All

James Whitcombe 15:30

right.

COMMENTARY – Robin and Stephen wrap up and introduce Episode 5

Robin Somerville 15:32

Well, Stephen, do you think they’ve grasped the reality of the situation?

Stephen Walker 15:36

With a bit of prompting, I liked the way that you asked the barrister. Well, what do you think you know is likely to happen at court, and it’s a share buyback? And well, it’s going to take 18 months, and suddenly, hey, if that’s going to happen in 18 months’ time.” Why can’t we think about it now? And the problem was, there had been no preparation, thinking about the structure of the deal, which is one of the biggest problems that we discussed earlier that happens at mediations. But you’ve got them on track now

Robin Somerville 16:16

because they haven’t got 12 to 18 months, have they? Because the financial situation, they’re going to have to declare to the bank. There’s a dispute. They just we’re never going to get to court, are we? Because things will implode by that point, won’t they?

Stephen Walker 16:28

I would guess so. As I said, phrase earlier, these are existential threats to them.

Robin Somerville 16:34

Okay, so that’s reality testing. Next episode, episode five, the fifth part of the six stages of mediation is about negotiating and see what how they can try and get to a figure that they can both live with.

Stephen Walker 16:51

Eyes on the prize. Name of the game. Yep.

Robin Somerville 16:54

Let’s watch.

Stephen Walker 16:55

Let’s do that.

EPISODE 5 – Shuttle, Negotiating and Corridor

INTRODUCTION – Robin and Stephen on the negotiation phase

Robin Somerville 00:01

Stephen Walker 03:14

Well, up to a point, if the clients feel comfortable in talking turkey, getting down to brass tacks, as they often put it, why not let them?

Robin Somerville 03:28

Okay, different angle.

Stephen Walker 03:30

Yeah. All

BAD PRACTICE – Part A – James’s room: counter offer delivered

Robin Somerville 03:31

right. Well, let’s see how the parties play how it plays out in this scenario. So, thanks again for being with me whilst I was in with with Sarah. Okay, so I’ve got an offer for you. So it’s it’s the shape that we talked about previously, where you buy Sarah’s and Helen’s shares, and also Sarah’s obviously looking for some redundancy as well. So their their offer is 300,000 each for the shares and 70,000 for the for the redundancy,

James Whitcombe 04:10

I mean, it’s not serious, is it? I mean, they’ve barely moved. It’s we’re just wasting our time here. This is this was my fear coming in that we’re just going to get like we’re just going to get dicked around, and and I think this is showing it. It’s it’s really frustrating, you know. I feel like we’ve we’re acting in good faith. We’re trying to move it along, and we just get that, you know, just mucking around. I

Gavin Dingley 04:35

have an idea.

James Whitcombe 04:36

Okay.

Gavin Dingley 04:37

What do you think about counter proposal?

James Whitcombe 04:41

Yeah.

Gavin Dingley 04:42

Does that look?

James Whitcombe 04:42

I think that’s far more reasonable. Absolutely.

Gavin Dingley 04:45

Think so?

James Whitcombe 04:45

Yeah.

Gavin Dingley 04:46

Okay. So we’ve obviously had a had a thing, and we would like to go back with 225,000 pounds for Helen and 225,000 for Sarah with a 40,000 pound redundancy payment.

Sarah Whitcombe 05:16

Okay,

Gavin Dingley 05:16

and that-that’s really our final offer. Yeah, we’re not really willing to negotiate after that. No, I think I think that isn’t that’s

James Whitcombe 05:22

that’s very fair.

Sarah Whitcombe 05:24

Yeah,

James Whitcombe 05:24

more than fair.

Speaker 1 05:27

Okay, leave

Robin Somerville 05:28

it with me. See what see what I can do.

James Whitcombe 05:35

I just think that they just you know this is this is what I mean about you know them doing this in bad faith. They I don’t really think they want to engage in this process at all. It’s ridiculous.

Gavin Dingley 05:48

But I mean, we had a little discussion about those figures before we came in.

James Whitcombe 05:51

Yeah,

Gavin Dingley 05:52

and we can put that to them, see where we get to from there. But as you you rightly said, that’s not a serious offer, is it? No. We’re wasting our time here. Let’s just go to court.

James Whitcombe 06:01

Okay. Well, what do you think they’ll say about the the 225?

Gavin Dingley 06:06

I just, you know, I think I can maybe get something out of him by by just going up and seeing if I can have a chat with him.

James Whitcombe 06:14

Really?

Gavin Dingley 06:15

Yeah, yeah. I think I think there might be something there.

Karen Baldwin 06:18

Okay. And I still want to know what they want. You know, as we’ve discussed, what they’re really looking for.

BAD PRACTICE – Part B – The corridor confidentiality breach

Robin Somerville 06:21

Hi, Gavin. You okay?

Gavin Dingley 06:22

Yeah. How’s it going? Not too bad. So, how do you think that’s going? I think it’s going pretty good for us. For us, don’t you think?

Robin Somerville 06:29

Yeah. Well, it’s going quite well, but we’ve got this impasse. I think we’re like 100 grand or 150 or so apart. They’re obviously at 370 or something. So yeah, a bit stuck at the moment.

Gavin Dingley 06:41

So what is it like? 250? Do you think we need to to push towards?

Robin Somerville 06:46

I definitely think they’re going to come down quite a lot. I think she’s.

Gavin Dingley 06:51

So do you think I should go back and tell my client to maybe up up the ante and get get what we what we need on the table in terms of funds?

Robin Somerville 06:58

Yeah, I think well, money talks to everyone, doesn’t it? So if you could like, you know, show a bit of improvement on your side, and I’ll do my best to sort of. I’m really keen for them to settle, and they are as well. So I’ll try and talk them down.

Gavin Dingley 07:12

Do you think there’s anything that we could do, maybe to make it a little bit better in terms of what we can get from this?

Robin Somerville 07:18

Well, I know it never really happens, but she’s after like an apology or like a recognition of fault or something on James’s part. So, I think if if he was to sort of make some movement on that, I think that might be helpful.

Gavin Dingley 07:33

Okay, I have to think about that. I don’t think my client’s quite there yet with the apology for our best reasons. That’s

Robin Somerville 07:41

usual. Yeah, I mean everything is without prejudice, so it doesn’t need to ever meet the light of day. But still,

Gavin Dingley 07:48

so do you think I can go back and tell my client that we can move the. I don’t see why not. Yeah. Okay.

Robin Somerville 07:54

All right.

Gavin Dingley 07:55

Good.

COMMENTARY – Robin and Stephen on the confidentiality breach

Robin Somerville 07:57

Stephen, I think I’ve just committed professional suicide, both as a mediator and a barrister. Breached confidentiality. There was even someone walking past in the corridor. They might have heard, “What a Car crash.

Stephen Walker 08:11

Absolutely, it’s very tempting when you’re into mediation. You come out of one room, if you’ve got someone with you, say an observer or an assistant, to start talking about it before you’ve got any distance from anywhere. That’s one thing you have to go against. And here, you’ve gone to the coffee station. They’ve come up to you, and there you are. Bridge your confidentiality. Anybody could have overheard you, and I’m not sure that I understood the figures. I’m not sure whether offers were actually accurately reflected, but that might be me misunderstanding. The thing to do if you get, I don’t know, propped like that because the other side is coming to try and sound you out is to go into another room. But even so, you have to be careful what you say, don’t

Robin Somerville 09:06

you? Yeah, I mean this entire process, the bedrock of mediation is confidentiality, and to have to build that trust with the party that if they tell you something, that you’re not going to reveal it to the other side.

Stephen Walker 09:18

Absolutely.

Robin Somerville 09:19

And in this case, I said, yeah, they’re desperate to settle. I mean, I’m I’m influencing the the settlement, and that is not what we’re about,

Stephen Walker 09:27

is it? No, it’s not what we’re about.

Robin Somerville 09:30

Well, there might be another corridor conversation that may be slightly better. Let’s have a watch.

Stephen Walker 09:38

All right.

GOOD PRACTICE – Part A – The corridor conversation with Karen

Robin Somerville 09:43

So, obviously, we’re at a bit of an impasse, and I would be really grateful for your help, sort of corridor informally style. If you could had any ideas about how we might be able to bake the impasse and progress a little bit.

Karen Baldwin 09:58

Thank you for asking, Robin. I appreciate it. Here’s what I think. She does not yet feel that she’s been heard as a person, as opposed to being processed as a claimant. She raised serious concerns at real personal cost, and she was told to keep quiet. She’s not yet had a moment in this mediation where she has felt that what she did has been genuinely acknowledged. The numbers matter, Robin, but they’re not going to move her on their own. Okay,

Robin Somerville 10:42

so it’s the recognition piece.

Karen Baldwin 10:44

Give her that moment.

Robin Somerville 10:45

Okay.

Karen Baldwin 10:46

Before you give her the number.

Robin Somerville 10:47

Okay.

Karen Baldwin 10:48

That’s my suggestion.

Robin Somerville 10:50

All right. So if I come and see you, I’ll ask her some questions about how she’s feeling and what’s motivating her, and then we’ll take it from there. Yeah. Really grateful for the help because sometimes we say things informally they make all the difference.

Karen Baldwin 11:08

We’re here to get the result for the clients, if we can.

COMMENTARY – Robin and Stephen compare the two corridor conversations

Robin Somerville 11:11

All right. Thanks. Thanks. So it is still a corridor conversation, and I think I might have been able to hear some voices in the background. So there is still the confidentiality piece, the general confidentiality, but at least I didn’t share anything that time, did I? I didn’t. I didn’t say anything that the other room had told me, and I didn’t. No, no, you didn’t

Stephen Walker 11:38

break your confidence. No, you didn’t. No, you didn’t.

Robin Somerville 11:40

Well, at least I got that right. You got

Stephen Walker 11:42

that right. But I still think the dangers of having these chats at the coffee station, which exist, you have to resist. You have to resist them, or at least make sure there is nobody around. And in a place like the IDRC, where there’s all these corridors and corners, it’s it’s very difficult.

Robin Somerville 12:01

Yeah,

Stephen Walker 12:02

going to another room.

Robin Somerville 12:03

Okay, I’ll make sure I do that next

Stephen Walker 12:05

time. Okay,

GOOD PRACTICE – Part B – Sarah’s room: open question and husband discussed

Robin Somerville 12:07

what happens next? Okay, so things have stalled a little bit. The the offers are where they are. Both parties are sort of resolute in in in their positions in respect to those offers. So, I just wanted to have a discussion with you, Sarah, about how you’re feeling about things. How about the negotiation?

Sarah Whitcombe 12:31

Yeah, I mean, I just need this to be over in a way that I can live with.

Robin Somerville 12:38

Okay, and what what does that look like to you? It being over in a way that you can live with. What does that feel

Sarah Whitcombe 12:45

like? I mean, I need the agreement to say that I was right to raise what I raised.

Robin Somerville 12:49

Okay.

Sarah Whitcombe 12:51

And just acknowledge what happened, and and and I would need it to say somewhere in writing that I was legitimate to say what I said.

Robin Somerville 13:07

Tell me why that’s important to you.

Sarah Whitcombe 13:09

Um. Because it’s the truth, and it’s what happened, and that’s what we’ve been working for and and fighting for, I guess. And otherwise, you know, what’s the point? I need to, I need to have that for the family, and for my family as well. I

Robin Somerville 13:37

remember when I was in here a little while ago, earlier on this afternoon. You took a call. Yeah. Tell me, tell me about the call you took.

Sarah Whitcombe 13:47

That’s my husband, just just just checking in. Okay. Yeah. What does it? What’s he saying about it? Well, he’s quite you know stick to your guns. Just you know, just just be firm. Be you know, don’t don’t be talked into anything else. So that’s you know Supportive, but it’s quite tricky in

COMMENTARY – Robin and Stephen on absent parties

Robin Somerville 14:17

some matters. So, Stephen, we’ve got two absent parties in this mediation. So we’ve got the husband. We don’t actually know what that conversation. You know what what the driver is there. We’ve also got Helen. How do you deal with it when there’s somebody inside the room but outside the room?

Stephen Walker 14:35

Well, first of all, I make sure they’ve signed the mediation agreement so that they’re bound by the confidentiality, and I do ask the person who’s having the conversation, say Sarah with her husband. Well, how’s he feeling about things? Because it’s right, isn’t it, that these types of disputes are family decisions. So she will talk to her husband about it because it affects how they are together, quite apart from her mum and her siblings. So I just ask now. Sometimes I get told. Sometimes I suggest that they join the mediation on Zoom.

Robin Somerville 15:17

Because the difficulty is that George, the husband, he hasn’t heard anything that’s happened. So it’s all very well somebody, you know, fearing somebody up outside the room, you know, go for it. But if they haven’t heard the conversation or heard what’s important and what’s going on. They’re not really in a position to. They might have come to a completely different view if they were sat in a room.

Stephen Walker 15:39

That is one of the big problems. I don’t. I’m not sure there’s a magic answer to it, but you just have to. I think just ask the decision maker, are you are you you able to make a decision without anybody else’s consent? And usually they say yes. Usually they say yes, but sometimes they don’t, and sometimes mediations do not reach a settlement on the day because of what you’ve just described. And therefore, I suggest you leave whatever the offer is on the table for 48 hours, then go home, talk about it all, and usually they come to a deal. Not always, but usually.

GOOD PRACTICE – Part C – Sarah’s room: Karen rejoins, counter offer, recognition named

Robin Somerville 16:31

Well, actually, I have got another counter offer. So they’ve increased their offer in respect of the shares to 225,000 pounds each, and then in respect of Sarah’s redundancy, it would be 40,000.

Karen Baldwin 17:00

Okay. Well, if the counter reflects movement towards the quasi partnership basis, that would be encouraging because the gap would then be a difference between us on the calculation of the goodwill rather than the framework. That’s a different type of gap. That’s closable. Yep. Okay. We can think about that.

Robin Somerville 17:31

And is there anything else as well as the financials, is there anything else that might make that offer, that counter offer, more appealing to you, Sarah?

Sarah Whitcombe 17:44

I mean, I just want some acknowledgement from James, and then I feel that we can’t. start to negotiate more, you know.

Karen Baldwin 17:59

That your concerns were legitimate, that you raised valid points.

Sarah Whitcombe 18:04

Absolutely. Yeah.

Karen Baldwin 18:07

And

Sarah Whitcombe 18:10

I think writing as well.

Karen Baldwin 18:12

Oh yes, absolutely writing.

Sarah Whitcombe 18:14

Yeah,

Karen Baldwin 18:15

and I think the methodology, how we’re arriving at the number, I think that’s also important. The basis for it.

Robin Somerville 18:24

So you’d like me to try and understand how they’ve come to those figures.

Karen Baldwin 18:27

That would be helpful, thank you. Yeah.

Robin Somerville 18:34

Okay, I’ll go away and get that information for you. Thanks. Okay.

Sarah Whitcombe 18:43

Thank you. Yeah, he asked me what I actually need.

Karen Baldwin 18:47

Yes.

Sarah Whitcombe 18:47

Not just what I claimed.

Karen Baldwin 18:49

Yeah. No, you said exactly the right thing. That will land now, and hopefully we’ll be able to keep that in the mix as we close in on some agreed numbers. Good. Well done. Thank

Sarah Whitcombe 19:02

you.

COMMENTARY – Robin and Stephen close the episode and introduce Episode 6

Robin Somerville 19:04

So, Stephen, the parties have been able to narrow the gap. It looks like on the money front they’re all agreed. So now it’s just one remaining item, which is this sort of apology or recognition clause, as they describe it. So settlement discussions steps phase seems to have worked quite well. Final furlong now.

Stephen Walker 19:23

Yep.

Robin Somerville 19:24

Now we’re into the nitty gritty. Sometimes this can take an awfully long time, can’t it? The next phase.

Stephen Walker 19:30

What draft of the settlements? Yeah. Just yes, just one thing that can speed that up is if someone’s asking for an acknowledgement or an apology or something, ask them. Well, have you got a wording? And you can then take that wording into the other room, and they can be thinking about it rather than just up in the air. Because the last thing you want is having to people psychologically having done a deal and then to fall out over the wording.

Robin Somerville 19:59

Okay, well let’s see if they’re able to find that wording and get get all of these words down and in a settlement agreement in this final stage, the sixth stage, the the close. Yeah, the close.

EPISODE 6 – Agreement and Close

OPENING MONOLOGUE – Robin Somerville

Robin Somerville 00:01

Have you got a legal dispute and you’re thinking about attending mediation, or are you advising somebody who is, or maybe you’re a mediator in training, or thinking about refreshing your skills, or would you just like to know more about mediation? I’m Robin, and I’ve been a mediator, mediation advocate, and a barrister for 15 years. I can’t show you inside a real mediation because it’s covered by confidentiality, but I can show you the next best thing. In these six videos, I’m going to show you a fictional case study based on my experience as a mediator. It’s a family business dispute based around a family hotel. Welcome to the Whitcombe family. Okay, so we’ve had five of the six stages of mediation. This is the the last, the final hurdle. Sometimes it can go wrong, but normally it goes okay. Can be a bit long, but normally we get there. So this is the stage where they’ve basically agreed the the numbers, the the the deal, if I can put it that way, and now lawyers take over and they need to put that deal down on a bit of paper so that it’s nice and binding, and they can have good parties can have closure and move on with their with their lives and put this behind them. So let’s see what good and bad practice we can spot in this episode. Okay, so I put your counter offer to Sarah, and subject to one clause, which I’m about to talk to you about, you’ll be pleased to hear that they’re okay with that.

BAD PRACTICE – Part A – Recognition clause and Gavin drafting from scratch

James Whitcombe 03:14

Great. Okay.

Robin Somerville 03:15

So I just need to talk to you about this last clause, because it might be a sticking point. I don’t know. So basically, they want like a recognition clause, which is basically Sarah thinks she had legitimate concerns. She’s raised them. That she’s contributed a lot to the business, and she’s really insistent that if if she’s going to accept that offer, that she really does need that clause in there to to recognise the contribution she’s made.

James Whitcombe 03:45

Fine, fine. I mean, if that gets them to sign, I can. Yeah, yeah. Just give them that. Fine.

Robin Somerville 03:53

Okay, great. So, Gavin,

Gavin Dingley 03:57

just bear with me, Robin. I’m just trying to put something together for for today. Okay, I haven’t really had the chance to do that before this conversation. So I’m just trying to do that now. All right.

COMMENTARY – Robin and Stephen on drafting from scratch

Robin Somerville 04:14

Okay. So the main point there is a lawyer has come to mediation for a shareholder dispute, and they know roughly what the various outcomes done. And he’s now starting to draft something from scratch. Is that you often see that

Stephen Walker 04:30

more often than we should? I think it’s close to being negligent not to have prepared a draft that your client understands and is subject to the fine tuning of the terms, but the basic structure that they’re happy with that to come without one. One, it suggests you hadn’t thought the whole thing through for as part of your preparation, and two, you’re going to waste an awful lot of time and energy, and the thing could fall apart because people are tired now. They think they’ve given enough, and they can become unreasonable.

Robin Somerville 05:13

And how often do you see it where people are going home at 11 o’clock at night or midnight because of this lack of preparation,

Stephen Walker 05:20

less than it used to be, simply because people now can use Judge Claude or Copilot and help get them to help you draft it.

Robin Somerville 05:33

But

Stephen Walker 05:33

yeah, still too often though.

Robin Somerville 05:35

So the lesson there is come prepared with at least a skeleton of the draft that you can fill in the details.

Stephen Walker 05:41

Yeah, and you can have alternative scenarios. We buy you out, you buy us out, and make sure you’ve discussed the tax implications

Robin Somerville 05:51

because they can be massive, can’t they? It can make a deal that looks attractive completely unattractive, or then there’s a financing. How am I going to pay the tax on such and such? And the whole thing could fall over if you haven’t thought about that.

Stephen Walker 06:04

Absolutely, and and they do.

Robin Somerville 06:07

Right. Well, let’s see whether Karen’s any better.

Stephen Walker 06:10

Let’s see.

GOOD PRACTICE – Part A – Karen’s prepared draft

Robin Somerville 06:20

Great news! They’ve accepted your offer, so it’s all done and dusted. Congratulations! So I’m

Karen Baldwin 06:28

very glad.

Robin Somerville 06:29

Really pleased for you. It’s been a hard day, hasn’t it? Lots of hard work.

Speaker 1 06:34

Yeah.

Robin Somerville 06:34

So, how long do you think you might take to produce a draft? Agreement.

Karen Baldwin 06:40

I can have a document ready in 15 minutes.

Robin Somerville 06:45

Oh, amazing! You must be one of those amazing lawyers that get these drafts done in advance of the.

Karen Baldwin 06:51

Well, I anticipated what the settlement was likely to look at look look like before today. So I have a settlement agreement drafted. I’ve got the share purchase agreement drafted. I need to put in the agreed numbers, the completion date, a few other bits. But otherwise, we’re good to go. A

Robin Somerville 07:12

mediator’s dream. Well, I’ll leave you to it.

Sarah Whitcombe 07:14

Thanks.

BAD PRACTICE – Part B – Gavin’s three amendments

Gavin Dingley 07:22

Oh look at that! There’s something here from from Karen that’s just come through. Okay. Let me just have a read of that. Get that up. Oh wow! It’s a settlement agreement.

Robin Somerville 07:38

Oh wow! Okay.

Gavin Dingley 07:40

Were you aware of that, Robin?

Robin Somerville 07:41

She did mention something that she she’d done some work on a draft, but

Gavin Dingley 07:45

I mean, first first thing I’ve seen of this. Okay. I mean, there’s a. I’m just looking at it now, James. There’s there’s a few few things that need to be ironed out here. There’s a completion date that I’m not quite sure about.

James Whitcombe 08:02

We said nine months, not six months, didn’t we?

Gavin Dingley 08:03

Yeah.

James Whitcombe 08:04

Okay.

Gavin Dingley 08:04

There’s I don’t really know the way that that term is structured. I’m not. I’m not sure that that’s defined properly. To be honest with you,

James Whitcombe 08:13

I think if you know you know your your beans, if you don’t like it, change

Gavin Dingley 08:17

I just I don’t like the numbering either. I just think that clause should be there.

James Whitcombe 08:21

Okay. Do

Gavin Dingley 08:21

you agree?

COMMENTARY – Robin and Stephen on amendments and barristers as advocates

Robin Somerville 08:24

Stephen, sometimes lawyers spot important things that are wrong in settlement agreements. So, for example, here we’ve got a six-month or a nine-month issue, but then he starts talking about numbering and you know where the comma goes. Sometimes you hear, how often do you find that people get stuck on, in big picture, trivial things that aren’t really going to make any difference to anyone?

Stephen Walker 08:46

They do. Barristers, in particular, because they are generally, I think, more careful and better at drafting, and so they do, but but in the end, in the end, I’ve noticed an increasing tendency amongst clients to just cut their lawyers off and say, “Look, this is good enough, but yes, they do get stuck on the trivials.

Robin Somerville 09:21

Well, whilst we’re talking about barristers, because obviously I’m a barrister, there are some good barristers in terms of mediation advocates and mediators, aren’t there? Yes, they are well respected, but sometimes they can be a bit litigious, can’t they? And a bit they don’t really get

Stephen Walker 09:38

Robin Somerville 09:38

you think that’s improving over time?

Stephen Walker 09:40

I thought it was. Well, it did improve. No two ways about it. But it seems to have flattened and sort of got worse. Just judging on my recent experience over the last 12 to 18 months, where there have been too many barristers who have not realised that being a mediation advocate is not the same as being a courtroom advocate. We’re here to make a deal, not make a case, and they don’t really get

Robin Somerville 10:08

Well, I remember I did some specialist mediation advocacy training with a friend of ours, mr. Goodman.

Stephen Walker 10:15

Ah, yes, Andrew.

Robin Somerville 10:17

Andrew Goodman, and so I definitely recommend that if barristers are going to come along and be mediation advocates, effectively, even though they are barristers, that they really need to train or know what they’re doing, rather than just approach it in the same way they would as wearing their wig and gown in a courtroom.

Stephen Walker 10:36

I think they should, and after all, that’s what they’re telling their clients they’re going to do at the mediation for them, so they better make sure they can do it properly. Let’s see if things improve. You’re the expert here, absolutely.

BAD PRACTICE – Part B continued – Signing and James’s remark unmanaged

Gavin Dingley 10:50

So if you just allow me to do that, I think we could maybe make some traction here. Okay, it’s really helped me having that agreement sent through because it means that I don’t have to do that much. But okay, that seems to be where I’m at.

Robin Somerville 11:06

Okay, so if you send that over to Karen, I’ll go and speak to her now. Check she’s happy with those changes, and I’ll come back as soon as I’ve got some news.

Gavin Dingley 11:13

Yeah, I just want to show them the full completed thing. Okay, if that’s all right. But yeah, feel free to go and work on that in the interim. Okay. Right, I think that’s it, guys. I’ve I’ve put those. You change everything. Okay,

James Whitcombe 11:35

great.

Gavin Dingley 11:35

So let’s just have a look.

James Whitcombe 11:38

Yeah,

Gavin Dingley 11:39

I’m gonna send that off.

James Whitcombe 11:40

Okay.

Gavin Dingley 11:42

Right.

James Whitcombe 11:44

Right.

Gavin Dingley 11:45

That’s it, I guess.

James Whitcombe 11:46

Can we sign

Gavin Dingley 11:47

now? No, I’m sure that a version will be printed, and then I’ll come back in, and we’ll get sign sign the Ts, dot the I’s, and

James Whitcombe 11:55

yeah,

Gavin Dingley 11:55

off we go.

James Whitcombe 11:56

Right, lovely. Are you happy? Yes. Yes.

GOOD PRACTICE – Part B – Recognition clause read aloud and signatures

Robin Somerville 12:10

Hiya. So IDRC very helpfully have printed this off. That’s the contract, the settlement agreement, rather. So I just wanted to read out. I know that it was really important to you, Sarah, about the recognition clause. I just wanted to read it out so that you have an opportunity to hear it. Okay. So this agreement records that Sarah Mitchell served as finance assistant at Whitcombe Hotel Limited for 15 years, that her professional contributions were valued, and that the concerns you raise were legitimate and properly motivated. Okay, so if you’re happy with that, obviously make sure that it’s the right document. So and sign it if you’re happy with it.

Gavin Dingley 12:56

Thank you.

Robin Somerville 13:11

Okay, and I’ll go and get the other side to sign it.

Karen Baldwin 13:17

Great.

Stephen Walker 13:18

Thank you.

Karen Baldwin 13:18

Thanks, Robin.

Robin Somerville 13:19

Thank you. I’ll come back to say goodbye in a bit. Okay.

Sarah Whitcombe 13:22

Thank you.

Karen Baldwin 13:23

Thank you.

Sarah Whitcombe 13:25

Okay. Thank you.

Karen Baldwin 13:28

You’re welcome.

Sarah Whitcombe 13:28

I’m thrilled. Yeah. Sad that I had to come to this, but I really hope, as a family, we can move on now. It’s all.

Karen Baldwin 13:36

Yeah.

Sarah Whitcombe 13:37

Settled. Yes. Thank

Karen Baldwin 13:39

you. You’re welcome. I’m really glad it worked, and I’m so glad you took the advice to come to mediation. That’s great. Absolutely. Are you going to go and have a word with them? Do you think?

Gavin Dingley 13:50

Yeah, I’d like to. Yeah.

Karen Baldwin 13:51

Why not, eh? Yeah. Yeah, I’ll come with you.

Sarah Whitcombe 13:54

Okay.

Karen Baldwin 13:54

If you like.

Sarah Whitcombe 13:55

Yes, please.

Stephen Walker 13:56

All right.

James Whitcombe 13:56

Thank you. Let’s

Karen Baldwin 13:57

do it. Yeah.

BAD PRACTICE – Part C – James’s room: copies and close

Robin Somerville 14:03

Okay, so yeah, those changes were all fine. She’s fine with those. So printed off the agreements. Just check that you’re happy with it.

Gavin Dingley 14:13

Give me a second to move these things around.

Robin Somerville 14:16

I just forgot to make sure that you’ve just given James some advice about whether it’s binding and this whole thing means it’s completely finished. I mean, I know my view, but it’s probably best coming from you.

Gavin Dingley 14:28

Yeah. So if we just, if you have a look there, I’ll have a read through this. If you’re happy, just sign it.

James Whitcombe 14:36

Yeah. I mean, I hope I hope I hope Sarah appreciates this, because I mean, I’ll be honest with you, this is a lot more than she deserves. But you know, yeah, it is what it is,

Gavin Dingley 14:53

I guess. That seems fine to me, James. Let’s let’s go ahead.

Robin Somerville 15:10

I’ll take that back and make some copies, and then circulate the copies with you.

Gavin Dingley 15:14

Thank you very much, Robin.

Robin Somerville 15:16

Well, congratulations. I know it’s been a painful journey for you both, but you know both parties have been sensible, and now you can get back to your business, carry on building the hotel,

James Whitcombe 15:29

yeah,

Robin Somerville 15:29

and they can get on with their lives, and hopefully,

James Whitcombe 15:32

I hope we can have some life together now with the girls. Yeah, well, yeah, we’ll see. I think we’ll see.

CLOSING CONVERSATION – Robin and Stephen

Robin Somerville 15:39

Well, Stephen, they got there.

Stephen Walker 15:41

They did.

Robin Somerville 15:42

There’s a bit of sour grapes there from James, isn’t there? He’s still. He wasn’t very happy there at the end.

Stephen Walker 15:46

He’s the paying party.

Robin Somerville 15:48

Yeah, it must be more painful for him.

Stephen Walker 15:50

It is.

Robin Somerville 15:51

And but that’s the normal outcome, isn’t it? We’ve seen the shape of today going through the six stages of Mediation felt pretty familiar to me in terms of how these things go. Any final comments from from your perspective about about the videos?

Stephen Walker 16:11

I think anybody who wants to try and get the best out of going to a mediation as a whether you’re the client, the lawyer, adviser, or even the mediator, could learn a lot from these. Look at the bad bits. Think about whether you do any of those. Then look at the good bits and think: Should I copy that?

Robin Somerville 16:36

Well, Stephen, I’m. So grateful that you’ve come and helped me with these videos. With your experience and your knowledge, just shines through. We’ve been friends a long time, and I’m really pleased that we’ve been able to do this together.

Stephen Walker 16:50

Thank you. I enjoyed it, and I’ve learned something.

Robin Somerville 16:54

What’s that?

Stephen Walker 16:55

Read out the apology. Read out the recognition. As the mediator, read it out.

Robin Somerville 17:02

Good lesson, Stephen.

Stephen Walker 17:04

Thank you. Yeah.

Mediation Videos Transcripts

Mediation Videos - Transcripts