| |
|
Mediation Case Studies
Case Study A
The first party to this dispute was an independent financial adviser which had a number of appointed representatives, one of which had advised a corporate client to replace a final salary pension scheme with a defined contribution pension scheme. The second party, the corporate client, followed this advice. However, the final salary scheme was never wound up and some years later the corporate client was required to make additional contributions to the final salary scheme to meet the minimum funding requirement, and claimed these extra costs from the IFA on the grounds that the appointed representative was negligent in failing to receomend that the scheme had been wound up. Litigation commenced for a claim in excess of £1m but the case was referred to mediation. By this time the IFA was no longer trading and had virtually no assets, but it strenuously denied liablity and it did have a valid professional indemnity policy for £500,000. The PI insurers for the IFA offered £400,000 in full and final settlement (to include costs), failing which it threatened to pay the full £500,000 to the IFA and allow it to continue the litigation with the proceeds (costs had already reached about £150,000 on each side). The corporate client accepted the £400,000.
Case Study B
The first party to this dispute was a father who had purchased some shop premises, allegedly on behalf of his son. The premises were adjacent to shop premises already owned by the son. The property was registered in the father's name until the costs of purchase had been recovered from rental income from a flat above the shop. The son occupied the shop rent free for a number of years and considerable sums were expended on knocking the two premises into one unit and improving the new purchase. The dispute arose when the son wanted to sell the premises and both sides claimed that they were the party that had spent the money on improvements, with the father also stating that he had never intended to transfer the title to his son. As this was a mediation it was neither practical nor appropriate to consider the merits of the respective arguments, but the case was settled on the basis that both shops would be sold as one unit and the son would receive £72,500 from the proceeds with the father receiving the balance.
Case Study C
The first party in this case was a firm of loan arrangers that entered into a complicated arrangement for the provision of finance with a family of farmers in return for substantial and ongoing fees. The second party (the farmers) did not fully understand the arrangement, felt that the firm had not delivered what was promised, and sought to extricate themselves from the arrangement. Outstanding fees of some £50,000 were being claimed. Neither party was committed to the mediation process and it was not possible to achieve any movement from their initial positions, so the mediation failed. Neither party was legally represented at the mediation.
Case Study D
This case was a fairly straightforward dispute (although many of the issues were complex) between an independent financial adviser and its client, who alleged that she had been given negligent advice, resulting in a claim of some £150,000 plus costs. Litigation had been going on for some time and both sides were represented at the mediation by solicitors, barristers and their expert witnesses. Some movement on both sides was achieved but the offer made by the IFA of £100,000 including costs was not acceptable to the client and the mediation failed on the day. However, negotiations continued in the days which followed and the case was settled a few days later for only slightly more than that figure.
Case Study E
This was a boundary dispute between neighbours which had been ongoing for a number of years with both sides trying to avoid litigation but achieving nothing except the escalation of legal costs. Finally, the parties agreed to mediate and agreed that a right of way would be granted over the disputed land to one party in return for a small strip of garden being transferred to the other party, with each party bearing their own costs.
Case Study F
This dispute was between a financial services network and a former appointed representative ("AR"). The network had paid compensation in respect of a portfolio of investments which it alleged had been mis-sold by the AR and sought recovery from the firm for the amount expended plus interest and costs. The mediation was in danger of becoming bogged down with legal arguments between the lawyers but once the mediator had side-stepped this issue (which was not appropriate for a mediation anyway) the matter was quickly resolved, with the settlement being a fraction of what the AR would have paid had it lost the case at trial.
|
|
 |
