THE WHITCOMBE MEDIATION

Programme 4

Glossary of Terms

Covering all six episodes and the key concepts from Winning in Commercial Mediation and Shareholder Disputes by Robin Somerville

This glossary covers the mediation process terms used throughout the six episodes of The Whitcombe Mediation, the legal and procedural terms relevant to the case study, and the key concepts from Winning in Commercial Mediation: A Business User’s Guide and Shareholder Disputes: A Practical Guide for Business Owners, Directors and Family Businesses by Robin Somerville. Terms are listed alphabetically. Episode references indicate where each term appears in the programme.

A

ADR – Alternative Dispute Resolution

A collective term for processes that resolve disputes without going to court. Includes mediation, arbitration, adjudication, and negotiation. Mediation is widely regarded as one of the most effective and cost-efficient forms of ADR for commercial disputes.

See also: Mediation; Arbitration; Litigation

Featured: Episodes 1–6 (context throughout)

Agreement to Mediate (Mediation Agreement)

The contract signed by all parties and the mediator before the mediation begins. It sets out the basis on which the mediation will be conducted, including the mediator’s fees, the confidentiality obligations of all participants, and the without prejudice status of the process. The agreement binds absent parties such as funders or insurers where they have signed it. In the Whitcombe mediation, it would also bind Helen Carter, who signed remotely.

See also: Confidentiality; Without Prejudice

Featured: Episode 5 (Stephen raises whether George has signed)

Arbitration

A private adjudicative process in which a neutral third party (the arbitrator) hears evidence and makes a binding decision. Unlike mediation, the parties do not control the outcome. Arbitration is generally faster and less public than litigation but more expensive and less flexible than mediation.

See also: Mediation; Litigation; ADR

B

Bank Covenant

A condition attached to a commercial loan that the borrower must continuously satisfy or the lender may call in the debt, increase the interest rate, or impose other penalties. Common covenants require the borrower to maintain a minimum level of profitability, disclose material legal disputes, or keep debt within a specified ratio. In the Whitcombe case, the hotel faces a covenant review within three weeks of the mediation, and the bank has not been told about the section 994 petition. A breach could trigger immediate financial pressure on the business.

See also: Section 994; Litigation

Featured: Episodes 3 and 4 (covenant deadline identified as existential threat)

BATNA – Best Alternative to a Negotiated Agreement

The course of action a party will take if no settlement is reached at mediation. Understanding your BATNA is essential preparation because it defines your walk-away point. A weak BATNA (for example, litigation that will take 18 months and cost significantly more than the settlement on offer) should increase your willingness to settle. A strong BATNA gives you genuine leverage. In the Whitcombe mediation, both sides claim their BATNA is litigation, but the covenant deadline and Thomas’s potential departure significantly weaken James’s true BATNA.

See also: WATNA; ZOPA; Litigation

Featured: Episode 4 bad (Robin asks Sarah about her BATNA without challenging it)

Binding Settlement

A settlement agreement signed by the parties at or following mediation that is legally enforceable in the same way as any other commercial contract. In mediation, nothing is agreed until everything is agreed and the agreement is in writing and signed. Oral agreements reached at mediation are not enforceable. Where court proceedings are already issued, the settlement may be recorded as a Tomlin Order to give it the status of a court order.

See also: Settlement Agreement; Tomlin Order

Featured: Episode 6 (agreement signed by all parties)

Buy-Out Order

The most common remedy granted by a court in a successful unfair prejudice petition under section 994 of the Companies Act 2006. The court orders one shareholder (usually the majority) to purchase the shares of the petitioning minority shareholder at a fair value determined by the court. In quasi-partnership companies the court will usually order the purchase to be at a pro-rata value with no minority discount. In the Whitcombe mediation, the parties replicate this outcome through negotiated settlement, avoiding the cost and delay of a court order.

See also: Section 994; Minority Discount; Quasi-Partnership

Featured: Episode 4 good (Robin introduces the concept of a negotiated buyout)

C

Caucus (Private Session)

A private meeting between the mediator and one party (and their advisers) without the other party present. The caucus is the primary tool of the shuttle mediation model. Everything said in a caucus is confidential and will not be disclosed to the other side without express permission. Most commercial mediations in England and Wales are conducted predominantly through caucuses rather than joint sessions. The term is sometimes used interchangeably with private session or breakout meeting.

See also: Shuttle Mediation; Joint Session; Confidentiality

Featured: Episodes 3–6 (all private room sessions)

Companies Act 2006

The primary statute governing companies in England and Wales. Key provisions relevant to the Whitcombe case include section 994 (unfair prejudice petition), section 175 (duty to avoid conflicts of interest), and section 260 (derivative claims). The Act also governs directors’ duties generally, share transfers, and the rights of minority shareholders.

See also: Section 994; Section 175; Unfair Prejudice

Featured: Episodes 2 and 3 (legal basis of the dispute introduced)

Conditional Fee Arrangement (CFA)

An agreement between a lawyer and client under which the lawyer’s fees are contingent on the outcome of the case. Commonly known as a no win no fee arrangement, though the terms vary. In the Whitcombe mediation, Karen mentions that a conditional fee arrangement is under discussion as part of Sarah’s litigation funding options.

See also: BATNA; Litigation Funding

Featured: Episode 4 bad (Karen confirms litigation funding is in place)

Confidentiality

The cornerstone of the mediation process. Everything said and done in a mediation is confidential and cannot be used in subsequent court proceedings without the agreement of both parties. Confidentiality operates at two levels: the without prejudice rule (which is a legal protection) and the contractual confidentiality obligation in the mediation agreement. The mediator is also bound to keep confidential everything told to them in a private session unless they are given express permission to share it. A breach of confidentiality by a mediator in a corridor conversation is one of the most serious professional errors in the process.

See also: Without Prejudice; Mediation Agreement; Corridor Conversation

Featured: Episode 5 bad (Robin breaches confidentiality in corridor)

Corridor Conversation

An informal conversation between the mediator and a party or their representative that takes place outside the formal caucus setting, for example in a corridor, at a coffee station, or during a comfort break. Corridor conversations carry the same confidentiality obligations as formal sessions. A mediator who discloses information about one party’s position during a corridor conversation with the other side commits a serious breach of the process. Equally, a skilled advocate can use a corridor conversation constructively, as Karen demonstrates in Episode 5.

See also: Confidentiality; Caucus

Featured: Episode 5 bad (breach) and good (Karen’s advice to Robin)

D

Derivative Claim

A claim brought by a shareholder on behalf of a company (rather than in their own name) to recover loss suffered by the company as a result of a director’s breach of duty. Governed by section 260 of the Companies Act 2006. In the Whitcombe case, the section 175 argument about the second hotel could form the basis of a derivative claim in addition to the section 994 petition.

See also: Section 175; Section 994; Fiduciary Duty

Featured: Episode 3 bad (Karen sets out the full legal case)

Direct Access Barrister

A barrister who can be instructed directly by a member of the public without the need for a solicitor as an intermediary. In the Whitcombe mediation, both Karen Baldwin (acting for Sarah and Helen) and Gavin Dingley (acting for James and Margaret) are direct access barristers. Direct access instructions are particularly common in mediation advocacy.

See also: Mediation Advocate; Barrister

Featured: Episodes 1–6 (both advocates are direct access barristers)

Directors’ Duties

The statutory duties owed by a company director to the company under the Companies Act 2006. The seven general duties include the duty to act within powers, the duty to promote the success of the company, the duty to exercise independent judgement, the duty to exercise reasonable care and skill, the duty to avoid conflicts of interest (section 175), the duty not to accept benefits from third parties, and the duty to declare interests in transactions. Breach of directors’ duties is a central allegation in the Whitcombe case.

See also: Section 175; Fiduciary Duty; Unfair Prejudice

Featured: Episodes 2 and 3

E

Ebrahimi v Westbourne Galleries Ltd [1973] AC 360

The leading House of Lords case establishing the quasi-partnership doctrine in company law. The case held that where a company is formed on the basis of mutual trust and confidence between its members (a quasi-partnership), the court may wind it up on just and equitable grounds when that trust has broken down, even if no technical breach of the articles of association has occurred. The quasi-partnership principle is applied by analogy in unfair prejudice petitions under section 994. Karen cites this case in Episode 3 when setting out the valuation basis.

See also: Quasi-Partnership; Section 994; Minority Discount

Featured: Episode 3 bad (Karen cites the case during information gathering)

EBITDA – Earnings Before Interest, Tax, Depreciation and Amortisation

A measure of a company’s operating profitability before the effect of financing decisions, accounting choices, and tax environments. Commonly used as the basis for valuing businesses using a multiple of earnings. In shareholder disputes, the agreed EBITDA figure and the appropriate multiple are often among the most contested valuation questions. In the Whitcombe case, the flood damage distorts the most recent EBITDA figure, requiring normalisation to arrive at a fair valuation.

See also: Goodwill; Normalisation; Valuation

Featured: Episode 3 bad (Karen refers to EBITDA normalisation)

Equalisation

The argument that the shareholding of the parties should be treated as if it were equal, regardless of the shares actually held, where the original allocation was based on expected contribution rather than a genuine reflection of ownership value. Karen argues in Episode 3 that James’s 25% shareholding (compared to Sarah’s and Helen’s 5% each) should be equalised given the evidence of misconduct.

See also: Section 994; Valuation; Minority Discount

Featured: Episode 3 bad

Evaluative Mediation

A style of mediation in which the mediator expresses views about the merits of each party’s case, the likely outcome of litigation, and the reasonableness of settlement proposals. Evaluative mediators may recommend settlement figures or express views on legal issues. Contrasted with facilitative mediation, in which the mediator refrains from expressing views and focuses solely on helping the parties reach their own agreement. Many commercial mediators in England and Wales adopt a mixed style.

See also: Facilitative Mediation; Transformative Mediation; Reality Testing

F

Facilitative Mediation

The most common style of mediation in England and Wales. The mediator does not express views on the merits of either party’s case but instead focuses on helping the parties communicate, identify their underlying interests, and find their own solution. The mediator’s role is to create the conditions for agreement rather than to drive or direct it. Most of Robin’s interventions in the good practice scenes are examples of facilitative technique.

See also: Evaluative Mediation; Transformative Mediation; Interests

Fiduciary Duty

A legal obligation requiring a person (the fiduciary) to act in the best interests of another (the beneficiary) rather than in their own interest. Company directors owe fiduciary duties to their company. These include the duty under section 175 of the Companies Act 2006 to avoid situations where their personal interests conflict with those of the company. In the Whitcombe case, James’s purchase of a second hotel using company money is alleged to be a breach of this duty.

See also: Section 175; Directors’ Duties; Derivative Claim

Featured: Episodes 1 and 3 (Karen identifies the section 175 breach)

Flood Damage

In the Whitcombe case, the hotel has suffered significant flood damage resulting in reduced trading income and an insurance payout below the anticipated amount. This creates both a valuation complication (the most recent year’s trading is not representative of normalised performance) and a cash flow crisis that intensifies the pressure to settle at the mediation. The flood damage is one of the three existential threats identified by Stephen in the Episode 3 commentary.

See also: EBITDA; Bank Covenant; Normalisation

Featured: Episodes 3 and 4

G

Goodwill

The intangible value of a business over and above its net tangible assets, reflecting factors such as reputation, customer relationships, brand, and the quality of its management and staff. In the Whitcombe hotel dispute, goodwill is one of the most contested elements of the valuation. Karen argues that the goodwill should be increased by adding back the cash extractions (treating them as diverted company profits) and by treating the second hotel opportunity as a company asset under section 175.

See also: EBITDA; Valuation; Section 175

Featured: Episode 3 bad (Karen sets out the goodwill arguments)

I

Information Gathering

The third stage of the mediation process. The mediator meets privately with each party to understand their underlying interests, concerns, and priorities rather than focusing solely on the legal position or the numbers. Skilled information gathering surfaces the real drivers of the dispute that are rarely visible in correspondence or legal documents. In the Whitcombe mediation, the key pieces of information are Margaret’s income loss, the bank covenant deadline, and Thomas’s importance to the business. The contrast between Robin’s bad and good approaches to information gathering is the subject of Episode 3.

See also: Interests; Caucus; Reality Testing

Featured: Episode 3 (entire episode)

Interests

What a party actually needs or wants from a resolution, as distinct from their stated legal position. Interests may be financial, personal, relational, reputational, or operational. Mediation is most effective when it addresses underlying interests rather than just legal positions. In the Whitcombe case, James’s interest is the survival and stability of the hotel; Sarah’s interests include financial compensation and acknowledgement that her concerns were legitimate; Margaret’s interests are family reconciliation and restored income.

See also: Positions; Information Gathering; Recognition Clause

Featured: Episodes 3 and 4 (contrast between bad and good information gathering)

J

 Joint Opening Session

A meeting at the beginning of the mediation day in which all parties and their advisers meet together in one room. The mediator sets the ground rules and each side has the opportunity to make an opening statement. Joint opening sessions are less common in England and Wales than they once were, partly because they can allow adversarial advocates to escalate conflict before the private sessions have begun. Stephen Walker is sceptical of their value; Robin cites academic research suggesting marginally better settlement rates when they are held.

See also: Opening Statement; Caucus; Shuttle Mediation

Featured: Episode 2 (entire episode)

L

Litigation

The process of resolving a dispute through the courts. Litigation is typically slower, more expensive, more public, and less certain in outcome than mediation. The costs of commercial litigation in England and Wales are substantial: even relatively straightforward cases regularly cost each party £100,000 or more in legal fees by the time they reach trial, and cases often take two years or longer. Settlement rates in commercial litigation are high (typically over 95% of cases settle before trial) but most of those settlements occur very late, after most of the costs have been incurred.

See also: BATNA; ADR; Mediation

Featured: Episodes 1–4 (litigation as the alternative consistently discussed)

Litigation Funding

Third-party financing of legal proceedings, usually in exchange for a share of the proceeds. In the Whitcombe mediation, Helen Carter is prepared to fund Sarah’s litigation. Third-party funding can strengthen a party’s BATNA by removing the financial barrier to litigation.

See also: BATNA; Conditional Fee Arrangement

Featured: Episode 4 bad

M

Mediation

A voluntary, confidential, and without prejudice process in which an independent neutral (the mediator) helps parties in dispute reach a mutually acceptable settlement. The mediator does not decide the outcome; the parties retain full control over whether and on what terms they settle. Commercial mediation in England and Wales typically takes place over one day at a neutral venue, though it can take longer in complex cases. Settlement rates are consistently high, typically between 75% and 85% of mediations that reach a mediation day.

See also: Mediator; Caucus; Joint Session; Settlement Agreement

Featured: Episodes 1–6 (the entire programme)

Mediation Advocate

A legal representative who acts on behalf of a party during the mediation process. Effective mediation advocacy requires different skills from courtroom advocacy. A good mediation advocate prepares a near-complete draft settlement agreement before the day begins, manages their client’s expectations honestly (including the mediation advice alongside the legal advice), uses the joint session and private sessions to advance settlement rather than to argue the legal merits, and understands that the goal is a deal, not a verdict. Karen Baldwin is the model of good mediation advocacy throughout the programme.

See also: Direct Access Barrister; Caucus; Opening Statement

Featured: Episodes 1–6 (Karen throughout; Gavin as contrast)

Mediator

The independent neutral who facilitates the mediation. The mediator does not have the power to impose a decision on the parties. Their role is to help the parties communicate, identify their interests, reality-test their assumptions, and find a resolution they can both accept. Commercial mediators in England and Wales are typically accredited by one of the recognised bodies such as the Civil Mediation Council or the Chartered Institute of Arbitrators.

See also: Mediation; Facilitative Mediation; Reality Testing

Featured: Episodes 1–6 (Robin as mediator throughout)

Minority Discount

A reduction applied to the valuation of shares held by a minority shareholder to reflect the fact that a minority stake does not carry control of the company and may be difficult to sell. In unfair prejudice petitions involving quasi-partnerships, the courts have consistently held that no minority discount should be applied when ordering a buy-out, because it would be unjust to penalise a minority shareholder twice – first through the misconduct that drove them out, and again through a reduced valuation. Karen argues there should be no minority discount in the Whitcombe case.

See also: Quasi-Partnership; Ebrahimi; Section 994; Valuation

Featured: Episodes 1 and 3

MLATNA – Most Likely Alternative to a Negotiated Agreement

A more nuanced version of BATNA that focuses not on the best possible alternative but on the most realistic one. Parties often overestimate the attractiveness of their BATNA; MLATNA encourages honest assessment of what is actually likely to happen if the mediation fails.

See also: BATNA; WATNA; Reality Testing

N

Normalisation

The process of adjusting a company’s financial results to remove the effect of exceptional or non-recurring items so that the underlying trading performance can be assessed on a like for like basis. In the Whitcombe case, Karen argues that the goodwill calculation should normalise past trading to remove the effect of the flood, which was a one-off event. Normalisation is commonly required in business valuations for shareholder disputes.

See also: EBITDA; Goodwill; Valuation

Featured: Episode 3 bad (Karen sets out the normalisation argument)

O

Opening Statement

A statement made by a party or their representative at the start of the joint session setting out their position, interests, and approach to the mediation. An effective opening statement in mediation is very different from an advocate’s opening in court: it should aim to lower the temperature, focus on resolution, and say something that only a human being in a room can say – rather than rehearsing the legal arguments that are already in the documents. Karen’s opening statement in Episode 2 good is the model.

See also: Joint Session; Interests; Mediation Advocate

Featured: Episode 2 (contrast between Gavin’s adversarial and Karen’s interest-based statements)

P

Position

A party’s stated legal or financial claim – what they say they want or are entitled to. Positions are typically set out in the position statement or letters before action and repeated in the joint session. Effective mediation goes beneath positions to identify the underlying interests that the position is designed to protect. Two parties whose positions are diametrically opposed may nonetheless have interests that are compatible.

See also: Interests; Information Gathering; Position Statement

Featured: Episodes 2 and 3

Position Statement

A document prepared by each party before the mediation setting out their case, their legal position, their financial claim, and their approach to settlement. Position statements are exchanged between the parties and provided to the mediator. They are without prejudice and confidential to the mediation. A good position statement also signals willingness to settle and identifies the party’s underlying interests, not just their legal position.

See also: Position; Without Prejudice

Featured: Episode 1 (Robin has received position statements but not read them)

Pre-Mediation Call

A private conversation between the mediator and each party (separately) before the mediation day. Normally conducted by video call. The pre-mediation call allows the mediator to build rapport with each party, understand the key issues and dynamics, identify the real drivers of the dispute, give practical guidance on how to prepare for the day, and address any procedural questions. A well-conducted pre-mediation call significantly improves the quality of the mediation day. Robin’s contrasting approaches in Episode 1 illustrate the difference.

See also: Rapport; Information Gathering

Featured: Episode 1 (entire episode)

Prospects of Success

A lawyer’s assessment of the likelihood that their client will win at trial, usually expressed as a percentage. Commercial litigation lawyers rarely advise prospects above 70% because of the inherent unpredictability of litigation. When both sides in a dispute are told by their lawyers they have 60–70% prospects of success, one side must be wrong. The mediator’s role in reality testing is to help each party hold their legal confidence alongside an honest assessment of what litigation actually involves in terms of cost, time, and risk.

See also: Reality Testing; BATNA; Litigation

Featured: Episode 4 bad (Robin endorses the 70% figure without challenge)

Q

Quasi-Partnership

A private company which, though incorporated, is run on the basis of mutual trust, confidence, and understanding between its members in a way that resembles a partnership. The concept was established by the House of Lords in Ebrahimi v Westbourne Galleries [1973] AC 360. Where a company is a quasi-partnership, the courts are willing to look behind the strict legal structure and grant relief based on the reasonable expectations of the members, including ordering a buy-out at full pro-rata value with no minority discount. Whitcombe Hotel Limited is a classic quasi-partnership: a family company run informally on the basis of mutual trust, without a shareholders’ agreement.

See also: Ebrahimi; Section 994; Minority Discount; Buy-Out Order

Featured: Episodes 1 and 3 (Karen identifies the quasi-partnership basis for the petition)

R

Reality Testing

A key mediator technique in which the mediator asks questions designed to help a party honestly assess the strength of their legal position, the realistic outcome of litigation, and the commercial wisdom of their current stance. Effective reality testing does not require the mediator to express a view on the merits; instead, it uses questions to help the party reach their own honest assessment. The distinction between challenging someone and inviting them to reflect is central to the technique. Episode 4 contrasts Robin’s failure to reality-test in Sarah’s room with his effective oblique questioning of Gavin in James’s room.

See also: Interests; BATNA; Prospects of Success

Featured: Episode 4 (entire episode)

Recognition Clause

A clause in a settlement agreement that acknowledges the contribution, concerns, or conduct of a party. In the Whitcombe settlement, the recognition clause acknowledges that Sarah served as finance assistant for 15 years, that her professional contributions were valued, and that the concerns she raised were legitimate and properly motivated. For Sarah, the recognition clause is as important as the financial settlement, and possibly more so. Karen identifies this early in the process; Robin only addresses it effectively in the good practice scenes. Stephen’s final lesson is that the mediator should read the recognition clause aloud.

See also: Interests; Settlement Agreement

Featured: Episodes 5 and 6 (central to the resolution)

Redundancy

In employment law, a payment made to an employee whose role is no longer required. In the Whitcombe case, Sarah has worked as the hotel’s finance assistant for 15 years and her redundancy forms part of the settlement. Karen calculates the redundancy at two years’ salary at a market rate of £55,000, giving a claim of £110,000, which settles at £40,000 in the final agreement.

See also: Settlement Agreement

Featured: Episodes 3 and 5 (redundancy figures discussed and settled)

Rapport

The quality of the relationship the mediator builds with each party, particularly in the pre-mediation call and the early private sessions. Rapport is not just warmth; it is the foundation of the trust that allows parties to share with the mediator things they would not put in a document and might not even say to their own lawyer. Without rapport the mediator has access only to the formal legal position; with it they gain access to the real drivers of the dispute.

See also: Pre-Mediation Call; Information Gathering

Featured: Episode 1 (contrast between bad and good pre-mediation calls)

S

Section 175 (Companies Act 2006)

The statutory duty requiring a director to avoid any situation in which they have or could have a direct or indirect interest that conflicts or may conflict with the interests of the company. This is one of the most commonly litigated directors’ duties in shareholder disputes. In the Whitcombe case, James’s purchase of a second hotel using company funds, in his own name rather than the company’s name, is alleged to be a clear breach of section 175. Karen argues that the second hotel should be treated as a company asset, adding approximately £750,000 to the goodwill figure.

See also: Directors’ Duties; Fiduciary Duty; Derivative Claim; Section 994

Featured: Episodes 1 and 3

Section 994 (Companies Act 2006) – Unfair Prejudice Petition

The statutory provision allowing a member of a company to petition the court for relief on the grounds that the affairs of the company are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of the members including at least themselves. Section 994 petitions are the most common form of shareholder litigation in English company law. The most frequent remedy is a buy-out order. Courts are generally supportive of mediation in section 994 cases.

See also: Unfair Prejudice; Buy-Out Order; Quasi-Partnership; Ebrahimi

Featured: Episodes 1–4 (the legal basis of the Whitcombe dispute)

Settlement Agreement

The legally binding written agreement recording the terms on which the parties have resolved their dispute. In a commercial mediation, the settlement agreement is typically drafted by the parties’ lawyers during the mediation day and signed before the parties leave. Nothing is agreed until everything is agreed and the document is signed. A good mediation advocate prepares a near-complete draft settlement agreement before the day begins. The contrast between Gavin’s blank-screen approach and Karen’s fifteen-minute draft is one of the central teaching points of Episode 6.

See also: Binding Settlement; Tomlin Order; Mediation Advocate

Featured: Episode 6 (entire episode)

Shareholders’ Agreement

A private contract between the shareholders of a company governing their relationship, the management of the company, share transfer restrictions, dividend policy, and the resolution of disputes. The absence of a shareholders’ agreement in the Whitcombe case is both a cause of the dispute and a reason why the company is treated as a quasi-partnership. Had a proper shareholders’ agreement been in place, many of the issues that gave rise to the petition might never have arisen, or might have been resolved through the mechanisms the agreement provided.

See also: Quasi-Partnership; Section 994

Featured: Episode 1 (identified as absent in the case study introduction)

Shuttle Mediation

The dominant model of commercial mediation in England and Wales, in which the mediator moves back and forth between the parties’ private rooms carrying information (with permission), offers, and ideas. The parties rarely or never meet together after the joint opening session, if there is one. Shuttle mediation allows each party to speak candidly with the mediator without the other side being present, and allows the mediator to manage difficult dynamics that might escalate in a joint setting.

See also: Caucus; Joint Session; Corridor Conversation

Featured: Episodes 3–6 (the shuttle model throughout)

T

Thomas

In the Whitcombe case, Thomas is the hotel’s head chef and a pivotal figure in the business’s commercial success. He is also Helen’s son, which makes him a material party to the family dynamics. His potential departure if the dispute is handled badly is identified by Robin in the good information gathering session as one of three existential threats to the business. Robin asks James specifically about Thomas because the case study signals his importance.

See also: Information Gathering; Interests

Featured: Episode 3 good and Episode 4 good

Tomlin Order

A court order which stays proceedings on agreed terms set out in a schedule to the order. The terms of the schedule are not part of the public record but are enforceable as a court order. A Tomlin order is used where court proceedings have already been issued and the parties wish to give their mediated settlement the status of a court order without making the terms public.

See also: Settlement Agreement; Binding Settlement

Featured: Referenced in the context of how mediated settlements can be enforced

Transformative Mediation

A style of mediation focused primarily on improving the quality of the parties’ interaction and communication rather than on reaching a specific settlement outcome. Transformative mediators help parties recognise and respond to each other’s needs and perspectives. Less common in commercial mediation than facilitative or evaluative approaches, but elements of transformative technique (such as empowering parties to speak for themselves) appear in all good commercial mediation practice.

See also: Facilitative Mediation; Evaluative Mediation

U

Unfair Prejudice

The legal test under section 994 of the Companies Act 2006. To succeed, a petitioner must show both that they have been prejudiced (that the value of their interest has been damaged or their legitimate expectations as a member have been frustrated) and that the prejudice is unfair (that it would be inequitable in all the circumstances to deny relief). Courts have consistently held that conduct in quasi-partnership companies must be assessed against the reasonable expectations of the members at the time the company was formed, not just the strict legal terms of the articles.

See also: Section 994; Quasi-Partnership; Ebrahimi; Buy-Out Order

Featured: Episodes 1–4

V

Valuation

The process of determining the fair value of shares for the purpose of a buy-out. In unfair prejudice cases involving quasi-partnerships, the court will usually order a valuation on a pro-rata basis with no minority discount, as at the date of the order or such other date as is just. Key issues in the Whitcombe valuation include the EBITDA multiple, the treatment of goodwill, the normalisation of trading results following the flood, the add-back of cash extractions, and whether the second hotel opportunity should be treated as a company asset under section 175.

See also: EBITDA; Goodwill; Minority Discount; Normalisation; Section 175

Featured: Episode 3 bad (Karen sets out the full valuation case)

W

WATNA – Worst Alternative to a Negotiated Agreement

The worst realistic outcome if the mediation fails and the parties proceed to litigation or another form of dispute resolution. Considering WATNA alongside BATNA gives a realistic range of outcomes against which any settlement offer can be assessed. Parties often focus on their BATNA and ignore their WATNA; the mediator’s reality testing helps them hold both honestly.

See also: BATNA; MLATNA; Reality Testing

Without Prejudice

A legal rule protecting communications made in genuine attempts to settle a dispute from being used as evidence in subsequent court proceedings. Statements made in a mediation are automatically without prejudice. The without prejudice rule means that concessions made, offers put forward, or information disclosed during the mediation cannot be placed before a judge if the case subsequently goes to trial. This protection is fundamental to the integrity of the mediation process and to the parties’ willingness to speak candidly.

See also: Confidentiality; Mediation Agreement

Featured: Episode 5 (Robin explains without prejudice in the good footage commentary)

Z

ZOPA – Zone of Possible Agreement

The range within which a deal is theoretically possible: the overlap between the maximum one party is willing to pay and the minimum the other is willing to accept. If there is no ZOPA (because the minimum acceptable to one party exceeds the maximum the other will offer) settlement is mathematically impossible unless something changes. Identifying the ZOPA (or the absence of one) is one of the most important tasks of the shuttle phase. In the Whitcombe mediation, the gap narrows to the recognition clause by Episode 5, and the ZOPA on financial terms is confirmed as closeable.

See also: BATNA; WATNA; Shuttle Mediation

Featured: Episode 5 good (Karen identifies the gap as closeable)

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Important disclaimer: This page is provided for general information purposes only and does not constitute legal advice. The content may not be legally accurate for your situation or at all. You must not rely on anything on this page in respect of your legal rights. Before taking or refraining from taking any legal action, you should seek advice from a qualified lawyer. I disclaim any and all liability for any loss, damage or expense howsoever caused by reliance on the contents of this page. If you would like advice on your specific situation, contact me here.

Last Updated on %post_modified% by Robin Somerville

This glossary covers the key terms used in commercial mediation, the legal and procedural concepts relevant to shareholder and family business disputes, and the specific terminology used throughout the Whitcombe Mediation training series. Terms are drawn from over fifteen years of practice as a barrister, mediator and mediation advocate, and from the books Winning in Commercial Mediation and Shareholder Disputes by Robin Somerville.

Whether you are preparing to attend a mediation, advising a client who is, studying for a mediation qualification, or simply want to understand the terminology used in commercial dispute resolution, this glossary is designed to give you clear and accurate definitions in plain English.