Farming: fertile ground for mediation

Farming: fertile ground for mediation

This article first appeared in the October 2021 edition of The Journal of the Law Society of Scotland

The value of mediation is becoming recognised in agricultural disputes, and not only those relating to tenancies. Rachael Bicknell explains its particular attractions in this sector.

It has been said that Scotland was born fighting. Battles over landownership can be traced back to at least Roman times, and the bloodline of our nation is stained with centuries of clan warfare, struggles for territory with the English, and the brutal evictions of the Highland Clearances.

To this day, while the feuds are conducted in a more civilised forum, conflicts over or relating to land and property ownership are often acrimonious and costly. Probably the most notorious litigation in recent times is the bitter 20 year boundary dispute between Perthshire pensioners. It was reported they had spent £500,000 in legal fees in a seven year court battle over a strip of land less than a metre wide, before the sheriff encouraged them to drop their case, saying that it was difficult to identify the benefit in continuing when judged against the effort and expense involved.

The costs of litigation as compared to mediation have been the subject of much discussion over the last year, particularly in the context of the convenience and cost-effectiveness of remote or online mediation. While an important consideration, costs are not the only reason for parties in dispute to consider mediation over litigation, particularly when it comes to agricultural disputes.

Art of the possible

One of the main benefits is that the parties retain control of the outcome. Mediation allows them, with the help of the mediator and their solicitors, to come up with an agreement that can work for everyone, and actually solve the problem – something that is often not within the gift of a court.

Significantly, this is recognised by the Scottish Land Commission and the Tenant Farming Commissioner, who recently set up a panel of approved mediators for the benefit of agricultural landlords and tenants. Following a two year pilot scheme the TFC reported that those who took part in mediation in the tenant farming sector said the outcomes achieved would not have been possible in a court process.

Added to this is the constant stream of changes to agricultural legislation over the past 20 years, for example relating to assignation and succession, landlord’s improvements, diversification, right to buy, rent reviews and relinquishment, meaning that, now more than ever, there are more routes to conflict. For some disputes, little case law exists to inform how a dispute might be decided by a court, making “litigation risk” difficult to assess and outcomes difficult to predict.

Why agriculture?

Of course, agricultural disputes do not only arise in the context of landlord and tenant. In the past few months alone, I have been involved in the mediation of access disputes, a partnership dispute, a professional negligence claim and a board and workplace dispute, all involving farming businesses. Disputes relating to succession planning within farming families are common, as are trust, wills and executry disputes involving farming businesses or assets. Outwith the family context, commercial disputes regularly encountered by farmers include compensation for land acquired under compulsory purchase, leases for telecommunication masts, disputes relating to access, boundary and building defects and disputes with suppliers or machinery providers.

What makes agricultural disputes particularly well suited to mediation? First, farming disputes often involve conflict within a family and can therefore be highly emotional for those involved, particularly where the dispute involves legacy conflict passed down through generations. Mediation gets to the heart of the conflict and is far more suited to resolving the “people problem”, which can be just as important as, or more important than, the substantive legal issues when it comes to finding a solution or settlement.

Secondly, farming disputes often arise in the context of an ongoing relationship. Litigation is well known for tearing apart business and family relationships. Mediation, on the other hand, often results in outcomes which preserve or restore those relationships, in part because it is a flexible process which can be adopted early in the life cycle of a conflict, before significant (sunk) costs are incurred, and positions become entrenched or escalate into formal intractable disputes.

Thirdly, commercial disputes in any context are hugely time consuming and expensive. Preparing animals for sale or slaughter, milking cows, attending auction marts, ploughing fields and sowing, spraying and harvesting crops need to be done when they need done. Everything else needs to come after that, and a farmer’s work is never really finished. Pursuing or defending a claim in court is a huge inconvenience and can add considerable stress to farming life. Further, even the most profitable of farming businesses may struggle to meet the costs of pursuing or defending a claim in court, especially since the onset of the COVID pandemic, with many farms needing to diversify to stay afloat. Mediation costs a fraction of litigation and is widely considered the most cost-effective way of resolving even the most difficult and contentious disputes.

Squaring Circles is the trading name of Squaring Circles Dispute Management Limited, registered in Scotland. Registration number SC641319. Registered office at Caledonian Exchange, 19A Canning Street, Edinburgh EH3 8HE.

Beware of dancing bears: do disputes differently

Beware of dancing bears: do disputes differently

Have you heard the one about the dancing bear? “Litigation is like dancing with a bear. You decide when the dance starts. The bear decides when it stops”. The sentiment is not a new one. In the late 19th century an American journalist wrote litigation is a machine which you go into as a pig and come out of as a sausage”.

In the UK (pre-COVID-19) disputes cost business £33 billion a year, taking up 20% of leadership time and potentially losing up to 370 million working days. In 2018 the estimated value of commercial claims mediated was £11.5 billion, saving businesses around £3 billion a year in wasted management time, damaged relationships, lost productivity and legal fees. In the US, perhaps surprisingly, it is standard practice to mediate as soon as court proceedings are raised. Similarly, in England, disputes are mediated at a far earlier stage in the lifecycle of a court action than they are here. Now, more than ever, businesses are going to need fast, efficient and cost effective disputes services.

The last 18 months has seen the Scottish Parliament Justice Committee report “I won’t see you in court”; the Scottish Mediation Network report “Bringing Mediation into the Mainstream in Civil Justice in Scotland” and a proposed Mediation Scotland Bill from Margaret Mitchell MSP, all recognising the need for a culture change to normalise the use of alternative (appropriate?) dispute resolution in Scotland. The benefits of negotiation, mediation and ADR are well known, so why are so many disputes litigated either before collaborative attempts to negotiate (in the true sense of the word) or by engaging in alternative or online DR processes? And how should businesses manage differences and disputes?

First, it is important to develop (or improve) and implement systems to identify where your business is at risk of conflict (both internally and externally) and to better manage conflict. This would include better use of dispute resolution or dispute escalation clauses in contracts; conflict policies and procedures, risk assessment tools and delivering appropriate training to those managing conflict within your organisation.

Secondly, adopt a robust risk assessment as part of an overall negotiation strategy when a disagreement or dispute arises. Parties to a dispute are susceptible to confirmation bias where they focus on the facts and evidence which support only their version of events, in turn feeding over-confidence bias. Research shows that lawyers are more susceptible to over-confidence bias than under-confidence bias when predicting the likely outcome of litigated cases. Cognitive biases can be better managed if a more systematic approach is taken to assessing prospects of success and alternatives to litigation.   

As a very basic example; you have a claim for breach of contract or negligence. If you go to court, you need to prove, first, that there was a contract between you and your opponent; secondly, that your opponent breached the contract; and thirdly, that you suffered a loss as a result of your opponent’s breach. What do the prospects of success look like on a statistical analysis? Even if your lawyer is 95% sure of proving there was a contract, if the prospects of proving that the party you are suing breached the contract are only 70%, and 60% that that party caused the loss you claim to have suffered, you actually have less than a 40% chance of winning the case overall. If your chance of proving that the party you are suing breached the contract and caused your loss both drop to 50%, you have less than a 25% chance of winning, meaning a £100,000 claim is really worth £25,000, and your legal costs to run it in court will far exceed that.

Thirdly, as part of the robust risk assessment conduct an objective analysis of each party’s best (or worst) alternatives to court. Without such an analysis, it is impossible to develop an effective strategy to determine whether you are better to negotiate and what a good result looks like. For example, you have a £2 million claim. It has cost you £100,000 on legal fees and £50,000 on expert reports to investigate. You are told court action is likely to cost £400,000 in legal fees, and you have a 60% chance of success. You anticipate your opponent’s legal costs will also be £400,000. The true value of your claim is therefore £940,000 (60% x 2,000,000 – £160,000 (40% of your irrecoverable judicial expenses) – £100,000 pre-action costs, assuming you will get full recovery of your experts’ fees). Or put another way, your best alternative to negotiating an agreement is £940,000. On this scenario it would be unwise to decline a settlement offer of £1 million, which is more than your best alternative in court. If no such offer was on the table, it would be wise to consider mediation or arbitration as an alternative. If parties were to agree to arbitration, particularly fixed fee or online models which simplify the procedure, keep costs to a minimum and cap the sums that the successful party can recover in costs, the best alternative would look quite different. If parties were to mediate “the pie” would be instantly bigger because significant legal costs would not yet have been incurred. The robust risk assessment is the only way to inform the decision on how best to proceed to resolve the dispute.

Finally, instead of raising court proceedings “to protect positions” (unless of course there are concerns a claim may time-bar and parties cannot agree to arbitrate to stop the clock) consider whether the better use of your resources is to de-escalate the conflict, explore workable solutions through negotiation, or engage in ODR or ADR. The threat of court is always there whether court proceedings are raised or not.

Squaring Circles is the trading name of Squaring Circles Dispute Management Limited, registered in Scotland. Registration number SC641319. Registered office at Caledonian Exchange, 19A Canning Street, Edinburgh EH3 8HE.

Be More Cat

Be More Cat

One of my favourite television adverts was the genius O2 campaign “Be More Dog”. You might remember it follows a day in the life of a cat – “I used to be a cat, aloof till lunch then coldly indifferent after”. Suddenly the cat realises its tedious existence could be exciting and fun if only it could “be more dog”. Cue the cat, now a cat’s head on a dog’s body, launching out the cat flap to Queen’s Flash, chasing a ball, catching a frisbee and digging holes (“running…amazing, chasing cars…amazing, sticks…amazing!”). In a comical way, the cat epitomised what can be achieved by total commitment to a change of mindset. Never more pertinent in these unprecedented times of social distancing and economic freefall. So how should businesses be dealing with differences and disputes?

Be more cat. Commit to a change of mindset and embrace new ways of working and doing business. Get into a routine for working from home (cue stand in the bath holding the shower rail to replicate bus or tube travel). Social distancing does not mean that business must grind to a halt. Video conferencing and phone are effective ways of keeping in touch, conducting business, negotiating deals or mediating disputes.   

Be proactive. Plan ahead by assessing where you might be at risk of disputes. Proactively contact the parties you do business with, such as your clients or landlord to keep the relationship strong. Where you anticipate a problem (such as “keep open” clauses in a lease or the need for extensions to credit), address it as soon as possible. Being proactive means that issues have the potential to be dealt with before matters escalate into a dispute.

Negotiate, negotiate, negotiate. Suppliers, contractors, lenders, debtors, creditors, landlords and tenants can all be approached to explore ways of finding solutions that are mutually beneficial to all parties. Accept that difficult conversations will need to be had. Plan how you are going to conduct those conversations and negotiations to maximise the opportunity of better outcomes for your business (and theirs).

Put empathy at the heart of your business. Research shows that businesses which understand their emotional impact on others and make changes as a result retain the best people, create environments where diverse teams collaborate and thrive, improve growth and reap the greatest financial rewards. Empathy (to be contrasted with sympathy) is the ability to truly understand a situation from another’s perspective. It is achieved by actively listening and asking questions to understand that person’s interests, concerns and fears. By being empathetic you increase your ability to influence. By properly labelling those interests, concerns and fears (“it seems like…it sounds like…it looks like…”) to validate the emotions of the other person, you are one step closer to getting the outcome you need.

Be honest and fair. The notion of fairness in negotiation is interesting. Accusations of unfairness can be a tactic to manipulate and trigger irrational concessions. Be aware of those and plan how you are going to deal with them. More positively, set the tone for honest and empathetic conversations and negotiations by addressing fairness at the beginning of discussions. By making it known to the other person that you sincerely want them to feel like they are being treated fairly at all times, and giving them the opportunity to stop the discussions at any time to address any perceived unfairness, you are setting yourself up as a fair and honest broker, which will also bolster your reputation for future business dealings and negotiations.  

Don’t compromise. There is a big difference between collaboration and compromise. If you have completed a piece of work and you are due to be paid, compromising and splitting the difference is not an option. Why should you accept £10,000 if it was agreed you would be paid £20,000. Be prepared to deal with hard bargaining tactics aimed at getting half the pie. Don’t compromise on your goals and your business, particularly in times of economic uncertainty.

Squaring Circles advises clients on devising and implementing negotiation strategies. Please email rachael@squaringcircles.uk if your business needs advice to negotiate or resolve a difference or dispute. 

Squaring Circles is the trading name of Squaring Circles Dispute Management Limited, registered in Scotland. Registration number SC641319. Registered office at Caledonian Exchange, 19A Canning Street, Edinburgh EH3 8HE.

Disputes in the Time of Coronavirus

Disputes in the Time of Coronavirus

As handshakes are replaced with head nods and the economic impact of the COVID19 pandemic begins to take hold in the UK, businesses need to be more innovative now than ever before. It is difficult to comprehend how quickly things have moved on in the last two weeks, and the speed with which UK businesses are going to need to react to make the best of whatever economic position we find ourselves in.

Whilst the UK is not yet in official lockdown, businesses have already been urged to implement social distancing by ordering employees to work from home. And further social distancing measures are only going to increase in the weeks to come. 

Dispute resolution will be a vital part of propping up the Scottish and UK economy whilst we ride the curve, and it will be crucial to economic recovery when the curve peaks and begins to flatten. Unresolved conflict is bad for businesses, economic development and recovery. As economic conditions remain uncertain, many businesses are already considering ways to cut costs, additional funding needs or implementing restructuring advice. Differences and disputes need to be resolved efficiently and cost effectively. Online negotiation and mediation are viable options. 

We can all agree that in a perfect world face to face negotiations and mediations are the ideal scenario. But online negotiations and mediations also have their benefits. Increased convenience through virtual meetings. Increased opportunities to create space in communications. Reduced travel and hosting costs, carbon emissions and travel time. And, significantly, no risk of spreading infectious diseases. 

Zoom, Skype and other virtual communication platforms are used daily by businesses across the globe. Many CEOs, executives, mediators and negotiators advocate that such technologies facilitate successful rapport building, despite participants not being in the same room. Adobe Sign and similar packages provide secure e-signature capabilities and documents can be shared in online portals or via email. Like anything, it can be difficult to embrace change. Of course, we may soon have no choice.

From 23 March 2020, Squaring Circles will be offering a new Online Mediation service, including telephone mediation for certain cases. Please email rachael@squaringcircles.uk for more information about these services.

 

Squaring Circles is the trading name of Squaring Circles Dispute Management Limited, registered in Scotland. Registration number SC641319. Registered office at Caledonian Exchange, 19A Canning Street, Edinburgh EH3 8HE.

When Harry met Meghan: A Royal mess fit for a mediator

When Harry met Meghan: A Royal mess fit for a mediator

Yesterday’s statement from the Duke and Duchess of Sussex, that they will be stepping back from the Royal Family and work, sent shock waves through the media and the nation. It quickly transpired that the announcement was made without consulting the Queen or Prince Charles, leading the press to describe the unprecedented move as a “bombshell” which “blindsided” the Royal Family. The official Palace response made it very clear that Harry and Meghan’s desire for a “progressive new role” was far from being agreed. Oh, to be a fly on the decadent walls of the Palace!  

Today, whilst journalists across the country are digging for the dirt, negotiators and mediators will be pondering the complex and delicate situation the Queen and the Royal Family finds itself in.  

The Royal Family, as a collective institution and the individual members affected, have much to lose if this situation is not handled appropriately (and much to gain if it is). This latest rift is hot on the heels of Prince Andrew being stripped of his Royal duties following the Epstein Affair. But the issues run much deeper. The competing interests are divisive, and the protagonists of this Royal Drama have much work to do. This would seem like a good time to appoint a Royal mediator to facilitate discussions and assist with understanding and balancing the competing interests at stake.

Whilst the Queen’s ultimate interest is in protecting the reputation of the monarchy and its future, Harry and Meghan clearly have other needs indicating that they intend to live a life independent of the traditions which accompany royal life yet continuing to support the Queen. The Queen needs to ensure the negotiations for Harry and Meghan’s departure – whatever that becomes – are conducted constructively and with integrity. This is particularly important now that the “breath taking” division within the Family is being played out in public, with negotiations in relation to use of tax-payers funds likely to be under public scrutiny.  

As siblings once very close, it is of paramount importance for Harry and Prince William to repair the previously unbreakable bond seen between them for many years. But repairing this relationship would also greatly serve the wider interests of the Queen and the Royal Family. The Princes’ relationship is the most important in building bridges between the Royal Family and Harry and Meghan and could be pivotal in finding a way to move forward. The Duchess of Cambridge, at one time a close friend of Harry’s, could play a crucial role in bringing the Princes together. 

Understandably, emotions are running high. The Palace is said to be “hurt”, “disappointed” and “very upset”. Prince Charles is likely reeling with Harry’s decision to go public without consulting the Palace and before full details of any arrangement had been agreed, airing the Royal’s dirty laundry in public and deepening divisions within the Family. Prince William is likely saddened by his younger brother’s haste in releasing a personal statement and not being in a position to have provided him with guidance. Harry and Meghan have made no secret of their feelings towards certain aspects of royal life and were visibly emotional when discussing the intense media attention in the ITV interview which aired last year.

Then there is the issue of what the “progressive new role” will look like. There is likely to be a lengthy negotiation to thrash out how this is all going to work. Are Harry and Meghan abandoning royal life? What royal duties, if any, will they continue to carry out? Will they keep their titles? Will they be free to earn an income? Will they continue to live in royal accommodation? Will they continue to receive publicly funded services such as security or other royal privileges? Which also brings into sharp focus whether the public have an interest in the negotiations. 

So, as head of the monarchy, the Queen has an important role to play as the “Third Side” not only in negotiations between Harry and Meghan and the Palace, but also in attempting to reconcile the relationship between Harry and Prince William, reported to be a major trigger in the souring of Harry’s relationship with the Royal Family; and in managing public opinion in the weeks and month ahead. 

The Third Side is a creative approach to managing conflict. It was developed by William Ury, one of the world’s leading negotiation experts, and is best explained in his 2010 TEDx Talk when he tells a story from the Middle East about a father who dies and leaves his 17 camels to his three sons. One half of the camels are to go to his eldest son, one third to his middle son and one ninth to his youngest son. But problems arise when the brothers start to negotiate the division of the camels and realise that 17 does not divide by 2 or 3 or 9. The brothers consult a wise old woman who questions her ability to help but instead offers the brothers her camel so that there are 18 camels. The eldest brother takes his one half share – 9 camels. The second brother takes his one third share – 6 camels. The youngest brother takes his one ninth share – 2 camels, which totals 17 camels, and allowing the 18th camel to be returned to the wise old women. The story is a masterful expression of what it means to be a “third-sider” and a mediator: seeking to understand both sides of the disagreement; viewing matters from the perspective of finding common ground; encouraging cooperative negotiation; and striving for a resolution that satisfies the legitimate needs of the parties and the wider community – in this case, the Royal Family and perhaps also the public. 

It is now imperative for the Queen, Prince Charles, Prince William and their aides and representatives to adopt effective negotiation, mediation and conflict management techniques to attempt to find a workable solution. They will need to develop an understanding of the real drivers behind yesterday’s announcement. Equally Harry and Meghan will need to work hard to restore trust and mutual respect, acknowledging the consequences of their statement. They will all need to focus on the five core concerns (referred to in one of my earlier blogs) to generate positive emotions to enable creative solutions to be explored. The reputation of the “progressive” Royals and the Royal Family as a whole depends on it. 

 

 

 

Squaring Circles is the trading name of Squaring Circles Dispute Management Limited, registered in Scotland. Registration number SC641319. Registered office at Caledonian Exchange, 19A Canning Street, Edinburgh EH3 8HE.

A call for collaboration, cooperation and courage

A call for collaboration, cooperation and courage

Tomorrow we take to the polls in what has been, latterly, a roller-coaster campaign trail. Only two weeks ago pollsters YouGov predicted a Conservative landslide with a 68 seat majority. Today its new projection is that Boris Johnson is on course for a majority of only 28 seats. Due to the margin of error in the forecasting model, this latest and final YouGov poll ahead of election day, throws into focus the very real possibility of a hung parliament and a return to coalition politics.

The last coalition was forged through negotiation and the skilful management of competing interests to find workable solutions to deliver a stable government. A hung parliament and a shift from bipartisan political support presents a very real opportunity to better meet the needs of the UK electorate. Working collaboratively and cooperatively to dissect manifesto promises presents an opportunity for more creative thinking to deliver innovative “non-binary” solutions, going beyond what one party could achieve alone.

We have already seen collaborative politics in action on the campaign trail in relation to Brexit. Nigel Farage’s “country before party” initiative will see no Brexit Party candidates standing in Conservative held seats to protect the pro-Leave vote. Similarly, the Liberal Democrats, the Green Party (of England and Wales) and Plaid Cymru have entered into a “remain alliance” agreeing not to stand against each other to protect the anti-Brexit vote.

But a hung parliament and an increase in collaborative politics is not going to be enough to diversify the political leadership of our nation. For that, we need (at least) two things to happen. Firstly, we need to replace the first past the post voting system with a form of proportional representation (“PR”). It is well known that most stable democracies in the world use PR as a means of maximising the voice of the electorate. The UK is in the minority, with Spain and Belarus being the only other European countries to adopt a single-winner voting system. Outside of Europe the US, Australia and Canada are the only other developed countries not using PR.

Secondly, and more importantly, we need a courageous electorate who recognises the real need for change and a willingness to challenge the status quo. Popular culture frequently tells us there is no credible alternative to the Conservatives: no-one else is capable of running our country; or that voting for the SNP dictates a preference for an independent Scotland. I for one do not accept such positions.

If you need proof of how taking a chance can change things for the better take a look at New Zealand. Jacinda Ardern was elected into office less than three months after becoming leader of the Labour Party in 2017. At that time she was also the youngest female head of government at 37 years old (with that accolade recently passing to Sanna Marin, the 34 year old PM of Finland who took office yesterday). Ms Ardern was only elected to Parliament personally (rather than as being a List MP) five months before that. Unknown quantities don’t come much bigger. Yet, she has been lauded as the one of world’s most effective leaders.

So, it is my hope that we can all be courageous like the Kiwis when we enter the voting booth tomorrow. Our fast, emotional and intuitive minds (the first system of our brain referred to in my last blog) is very effective at causing us to instinctively reduce uncertainty by choosing what our brains believe to be a familiar and safe path (“better the devil you know”). Instead, we need to mobilise our slow, deliberate and logical minds (the second system) to challenge those cognitive biases and ask ourselves, do we genuinely believe that the current political situation is one we want to continue?

And, in the event of a hung parliament, as officials work late into the night and the weekend to thrash out deals behind closed doors, the spotlight will shine on negotiation, cooperation and collaboration – the true essence of politics in liberal democracy and a fundamental skill used by dispute resolution specialists across the country. It will be those skilled negotiators at the table who, through effective negotiation, mediation and conflict management techniques, will come out winners next week. 

Squaring Circles is the trading name of Squaring Circles Dispute Management Limited, registered in Scotland. Registration number SC641319. Registered office at Caledonian Exchange, 19A Canning Street, Edinburgh EH3 8HE.