Harvey is the chief executive and managing director of Haystack Ltd, a modest sized but very successful niche manufacturing company. Over 20 years he built the business up to the point that it was valued as being worth in excess of £100 million. Harvey is a rather vexatious character with a liking for litigation and tends to get results by riding roughshod over other people, not least suppliers and competitors. He has a lot of well established business contacts and is not averse to bad mouthing people whom he doesn’t like.
Harvey enters into a new contract worth many thousands of pounds with Savealot Ltd for the supply of essential raw materials. Harvey is aware that Savealot, whose MD is Spencer, is perhaps not the most reliable of companies and in manufacturing circles it does not have the highest of reputations.
Whilst there is nothing wrong with the materials that it provides, Savealot’s mismanagement results in late deliveries and Haystack incurring some relatively modest but not insignificant financial losses. Also, Savealot’s invoicing system is unreliable and Harvey receives a sequence of invoices that are quite patently incorrect.
Incensed by the delays and inefficiency, Harvey deduces that Savealot is in “fundamental” breach of contract and refuses to settle a number of invoices worth £19,000. His response to a telephone call from Spencer is “so sue me!” Both “sides” instruct solicitors, legal proceedings are started, and much to Spencer’s annoyance, Harvey gives a conflated version of events to anyone who will listen.
In his heart of hearts, Harvey is all too aware that he has perhaps gone too far. Although he is annoyed, he is aware that it would have been quite easy for him to approach Spencer informally and suggest that the invoices should be amended. Equally he is well aware that Savealot supply good quality materials at a very competitive price. Spencer on the other hand is all too aware that he is responsible for a badly managed company and that costly litigation could also result in even more adverse publicity than he is currently receiving from Harvey’s ad hoc badmouthing.
Eventually the parties’ lawyers, who have repeatedly advised their respective clients that the costs of pursuing litigation are out of all proportion to the true value of the dispute, persuade them to use the ASM PLUS small disputes claims resolution service and within a week of initial contact having been made an online mediation is arranged. This process prompts both Harvey and Spencer being encouraged not only to address each other’s possible failings but also to look at their own.
The upshot is that Harvey, who has just been presented with a quite substantial interim bill for legal fees considerably in excess of his share of the modest charge of £350 plus VAT for the mediation, agrees to pay Savealot’s invoices less a mutually agreed reduction of £3500.00 to account for Haystack’s losses. Informally, Harvey and Spencer shake hands and agree that for the duration of their current business arrangements, they will stay in touch and will be upfront with one another.
In this not untypical case, initially neither party wished to accept responsibility for any wrongdoing and focused entirely on the failings of the other. Neither Harvey nor Spencer wanted to be seen as losing face and initially, each thought that agreeing to mediation would be construed as a sign of weakness.
All concerned found the mediation process to be very constructive and matters were resolved within the three-hour time limit. It was arranged at the convenience of Harvey and Spencer and they did not incur any travel or waiting time.
Harvey noted that it took much less time to prepare for than his court case and that the costs incurred were a fraction of what he had thus far paid his solicitor. He also thanked his solicitor for behaving honourably and giving him the appropriate advice. Spencer is pleased at the outcome, not least because he is able to maintain an economically beneficial relationship with a good client and the damage to his company’s reputation is minimised. Equally, he finds himself with time on his hands that can be devoted to running his business and generating income that he might otherwise not have had.