theAustraliancorporatelawyer
MEDIATION – THE USE OF EVIDENCE
TO ACHIEVE THE BEST OUTCOME
An interview with John-Henry Eversgerd and Andrew Moffat
John-Henry Eversgerd a Forensic Partner from McGrathNicol, and Andrew Moffat a Commercial Mediator at
Constructive Accord, share their thoughts on the best use of evidence to achieve a positive outcome through
litigation or mediation.
W
hat are your thoughts
on the recent growth of
commercial mediation?
Eversgerd: It is no surprise there is increasing
reluctance to take matters to court. Clearly,
mediation can save significant time and
money in many situations. But due to the
‘human factor’ the best strategies to achieve
a good outcome in mediation can be very
different to the best strategies to win a
court case.
John-Henry Eversgerd
John-Henry Eversgerd, a Forensic Partner at
McGrathNicol, prepares commercial forensic evidence
for court, mediation and arbitration. He prepares
clear and concise evidence for court proceedings
and also on a consulting basis to help to both sides
of a disagreement better understand the potential
quantum of damages in commercial disputes.
Moffat: Mediation has evolved rapidly, from
being an interesting “alternative” to traditional
court-based dispute resolution, to an integral
and unavoidable stage of almost all disputes –
mandated by legislation, ordered by court, or
contractually required. But not all participants
have fully adjusted to this, and many still
conduct themselves as they would in formal
litigation, depriving themselves of the
opportunities that mediation creates.
Why do litigation and mediation
require different approaches?
Eversgerd: We certainly see a real difference in
the use of expert evidence, including forensic
accounting work. When it comes to the maths
and calculating the financial component of
a settlement, the most logical and accurate
quantitative analysis and the “right” answer
– the information needed for trial – isn’t
necessarily what the parties need to make the
best decisions in mediation.
Moffat: The decision making process is
very different. In court, the task is simply to
convince the judge. Mediation has additional
complexity; a party needs their expert
evidence to fulfil potentially four distinct roles:
1. Allow themselves to make an informed
assessment of the likely outcome of trial
(quantum and likelihood)
Andrew Moffat
Andrew Moffat, of Constructive Accord, is a
Commercial Mediator who draws upon his former
life as an investment banker and commercial
banker to help parties resolve disputes before
commencing potentially lengthy, expensive, and
risky court proceedings.
36
VOLUME 25, ISSUE 1 – MARCH 2015
2. Create doubt in the other side so that
they are motivated to agree to a
favourable settlement
3. Provide clarity on the underlying situation
so they know their own
financial parameters
4. Articulate the commercial justification for
the other side to agree a “fair” settlement
How do these two paths differ?
Eversgerd: The parties present at mediation
are likely to include business people who
are very close to the matter, and emotionally
invested in the outcome. So, it is necessary
to analyse what the financial outcome would
likely be if the matter ultimately ends up
in court, but those calculations should be
presented quite differently when used for
mediation, keeping the audience and their
perspectives in mind. In essence, the key
function of expert evidence is guiding the
parties to best understand their own risks, as
well as reminding the other side of the risk
they might face if resolution is not achieved.
But what if mediation doesn’t
result in a settlement?
Moffat: Whilst the logic for aiming to settle
at mediation is compelling, there will often
be such a divergence of views that parties
will not be able to find common ground, at
least at first. Mediation is not about finding a
perfect answer, but merely one which is better
than the alternative – and the alternative is
usually litigation. So not reaching a settlement
should not necessarily be seen as a “failure”,
but an acceptance that expectations may be
too far apart. In that case, the expert evidence
already prepared should usually be suitable for
use at trial, or easily adapted so that it can be.
So practically, what differences
would disputants expect to see?
Eversgerd: I recommend not necessarily
providing all of your claim analysis up front.
If the quantum is significantly different from
what the other party expects or wants it has
the risk of putting them on the defensive early.
Strategically consider beforehand what would
be most effective convincing you if you were in
their shoes. One strategy is to focus initially on
the independence and expertise of the expert
you have engaged to perform the analysis.
Before jumping to the numbers, explain
what questions the specialist was asked to
objectively answer. This will paint a picture
of what the outcome might be from a court
judgement. In other words, demonstrate
what the cost may be if they don’t negotiate
acla.com.au
in earnest. Again, the use of evidence in
mediation can be more powerful if one
doesn’t jump to the technicalities right away
unless the conversation naturally goes there.
The evidence will be more powerful if it is
presented using the following rules:
2. Disputes may formally arise between two
organisations, but in fact the key decision
makers will be individuals with their own
thoughts, perspectives and KPIs, so time
spent understanding these can yield
valuable insights.
1. Present the evidence in a summarised,
succinct manner
2. Utilise graphical illustrations of the key
findings and a range of possible outcomes
3. Even financial disputes are rarely just
about money, so understanding the nonmonetary drives to the dispute will avoid
wasting money.
3. If the evidence is technical in nature, use a
consulting expert to assist and hold a dress
rehearsal in advance of the mediation with
enough time to adjust the presentation
4. Newton’s Third Law always applies – one
side acting aggressively will always provoke
an aggressive response, so be moderate in
tone unless aggression is tactically helpful.
Is there anything else to keep in mind
to improve mediation outcomes?
Eversgerd: Just a few more recommendations
when it comes to expert witness evidence.
Moffat: Mediation allows flexibility that
doesn’t exist in most other stages of the
dispute resolution process, so this flexibility
shouldn’t be wasted. Other observations:
1. Do a run through of your opening
statement with your experts ahead of the
mediation and hold back on content that
1. Thoughtful decisions on the timing of
mediation can improve the chances of a
good outcome – rather than just waiting
for Directions from the court.
3. Understand whether the other side’s
evidence is from an independent expert
who has a duty to the court or from a
consulting expert who can instead act
as an advocate.
Mediation is no longer just a stage in
the litigation process, but often the key
dispute resolution mechanism – and this
is increasingly becoming understood by
litigants and their advisors. So we expect
to see growing sophistication from experts
and those who retain them, in ensuring that
the way they use expert witness evidence is
optimised for mediation. Those who don’t
understand and appreciate the differences
will fail to make the most effective use of the
expertise at their disposal, and will be less
likely to achieve a good outcome early.
will fall on deaf ears, no matter how accurate
and convincing it would be in court.
2. Have the detail of your evidence handy,
in an easily digestible format, in case it
is needed.
VOLUME 25, ISSUE 1 – MARCH 2015
37