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Andrew Hildebrand, an independent mediator

Mediation: the most effective option

Andrew Hildebrand is an independent mediator and specialises in resolving media, entertainment, franchising and brand licensing disputes. He has extensive commercial experience, both as a solicitor (and former Mishcon de Reya partner) and working in industry brokering deals, managing relationships and resolving disputes. He also runs bespoke practical negotiation and dispute resolution courses. Andrew works both independently and as a panellist with UK mediation provider In Place of Strife External Link.

In this practical guide to mediation Andrew explains: the commercial options, the key considerations in assessing which option may be best for you, and why mediation is often the most effective one for resolving copyright and other Intellectual Property (IP) disputes.

What are your options if you have a dispute you don’t feel you can resolve yourself?

You can back down, though you may resent doing so and probably the other party too. Instinctively, most business people hire a litigator. It isn't surprising. That's what we have been taught to do and what we see on television. Litigation is often the right strategy where it is important to establish some form of precedent or where there is an overriding principle (e.g. fighting piracy), or a compelling reason (e.g. where getting the other side’s attention is proving difficult).

That said, businesses increasingly view litigation and arbitration as last resorts, rather than default positions. Just as hiring a divorce lawyer isn’t necessarily the best way to resolve a marital dispute, let alone save a marriage, businesses recognise that mediation offers a more effective way of resolving disputes.

Mediating is not the same as negotiating. Introducing someone impartial, often with the right business background, to fight on behalf of the deal changes the dynamics. It works like marriage guidance but in a business context.

At the very least, you get one more bite at the cherry without appearing to be reaching for your litigator. That is why in many IP related industries, contractual mediation clauses are now fairly common, often as part of an escalation procedure with arbitration/litigation as the fall back.

Why is mediation such an effective tool for businesses?

1. It works: 90% of UK commercial mediations settle. 70% on the day. Settlements can be enforced in much the same way as a court order.

2. Speed and Cost-effectiveness: It is four times quicker than litigation and a quarter of the cost, enabling parties to save tens, if not hundreds, or thousands settling their disputes.

3. Relatively stress free: I have been a client. Lawyers rarely understand how stressful litigation can be for the client or how often litigation fatigue is a major driver in settling disputes.

4. Key relationships can be preserved and disputes can stay confidential.

5. With mediation, there’s no risk of an unwelcome judgment being made against you, and

6. It is much easier than suing or enforcing abroad.

What should you do before deciding which is your best option?

Don't do what most people do. Don't let emotions dictate decision-making. You may end up having to live with the consequences for years. Instead, consider these questions. Be rigorous but be realistic.

  • What do I want to achieve?
  • How likely am I to do so?

People generally over-estimate the strength of their case. In purely financial terms, when litigants are advised they have a 'strong' case that rarely means more than a 65% shot of winning all, or most, of their claim and the 'winner' generally still ends up paying 1/3 of their own legal costs.

That means that, in net terms, the odds of you 'winning' more than 50% of your claim are probably less than 50/50.

What is it likely to cost me and my business?

If you are contemplating litigation, calculate the potential collateral cost to the business, both financially and in terms of lost business time. Treat it as you would any long-term project and be sure to review the position quarterly, as odds and costs can keep changing. Remember, pressing the litigation button is easy. Unpressing it is an entirely different matter.

What types of copyright/IP disputes benefit most from mediation?

Disputes involving: Royalties/Audits

Settlements can be agreed privately and non-precedentially (handy where satellite third party claims may exist). Also, once key terms have been agreed in principle, deals can be restructured more effectively and tax efficiently than any court might allow e.g. involving reconfiguring rights, payments, cashflow etc.

Disputes involving: Rights

Unlike some patent disputes, where only one 'winner' may be possible, in most copyright and passing-off disputes, the project itself can be protected by mediation. Projects (especially those with a limited shelf life like films, programmes and commercials) can ill-afford to lose vital distribution deals or release/campaign windows, which is often what happens when there are ‘Mexican stand-offs’ over chain of title and the project gets ensnared in litigation.

Disputes involving: International Distribution/Co-Production

For distributors, licensors, brand licensors, and co-producers mediation is considerably more effective than suing or enforcing abroad. Film and TV distribution contracts often stipulate Independent Film and Television Alliance (IFTA) arbitration but very little IFTA arbitration takes place outside Los Angeles.

Disputes involving: Deadlines (e.g. production, delivery, release promotion/publication)

In my experience, even convoluted disputes tend to get settled in a day. More time, ironically, is usually spent getting people to agree when to meet.

Disputes involving: Cashflow issues

Mediating should flush this out, enabling you to settle on the best available terms without wasting time or expense. Settlements can be converted into consent orders, preventing liquidators from disputing proofs of debt.

Disputes involving: Reputations, or relationships

It allows broadcasters, publishers, fashion houses, brand licensors and insurers to resolve thorny disputes with stakeholders, suppliers, talent and other counter-parties without alienating each other, or damaging projects, brands or reputations.

Negotiations take place away from any media glare, which also explains why mediation is preferred where public figures or works of art are involved.

Disputes involving: Outcomes that could impact future business

e.g. possible long-term financial repercussions or potentially damaging knock-on effects.

Disputes involving: Outcomes that could be impacted by third party fall-out, e.g. franchising disputes

Disputes often start between Franchisor and Franchisee before escalating because third-party franchisees inside the territory (or master-holders outside it) perceive either potential impact or personal advantage. When that happens, the warring parties may end up deciding to share a lifeboat.

Disputes involving: SME’s - and also for internal company issues

Where disputes entail having to make accounting provisions, mediations can enable provisions to be released or allocations reduced, significantly improving year-end figures.

Conversely, while suing for less than £125,000 rarely makes commercial sense, recovering relatively small debts can be vital for SME's.

HR niggles, inter-departmental spats and partnership wrangles can also be expensive and time-consuming and are best nipped in the bud before they escalate.

Disputes involving: Multi-party projects

Finally, hiring an independent 'go to' person at the outset to help everyone handle whatever disputes crop up often makes sense. This is mainstream in industries like construction and outsourcing and can be particularly helpful for projects where individual partners are operating outside their primary sector or customary business model.

Andrew Hildebrand Mediation Limited
Andrewhildebrand515@yahoo.com
+44 (0) 207 286 0272
+44 (0) 7767 618 086

The IPO is grateful to Andrew for kindly providing this unique and practical insight into mediation.