Harvey is the chief executive and managing director of Haystack Ltd, a small but very successful niche manufacturing company. Over 20 years he has built the business up to the point that it was valued as being worth in excess of £100 million. He 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 breach of contract and refuses to settle a number of invoices worth around £50,000. His response to a telephone call from Spencer is “so sue me!” Both “sides” instruct solicitors and 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 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 persuade them to go to mediation. This results in both Harvey and Spencer being required not only to not only each other’s failings but to look at their own. The upshot is that Harvey, who has just been presented with a quite substantial interim bill for legal fees and a politely worded letter from his very conscientious solicitor warning about the vagaries of litigation, agrees to pay Savealot’s invoices less mutually agreed reduction 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.
In the event the mediation lasted less than a day. Harvey noted that it took much less time to prepare for than his court case and that the costs incurred were a 10th of what he had thus far paid his solicitor. He also thanked his solicitor for solicitor behaving honourably and giving him the appropriate advice.
Principal Director of ASMADR, civil/commercial, workplace, employment, family and educational mediator and trainer with a judicial/legal background. He has knowledge and expertise in dispute resolution in a wide range of areas and disciplines and mediates online.