Peter, Paul, John, Maria and Leroy Jones are siblings. Recently, their mother, Antonia, passed away leaving an estate with an estimated value of £500,000. Most of this sum is tied up in her home which is currently occupied by Maria and Leroy.
Under the terms of Antonia’s badly drafted will, her five children will all inherit an equal share of her estate. Her executors are Peter and Leroy. Maria and Leroy were living in their mother’s home at the time of her death and have continued to do so.
The siblings also have a half sibling, Jameson, who Antonia conceived out of wedlock. With the exception of Leroy, none of the siblings have ever had anything to do with him.
Peter, Paul and John think that their mother’s home should be sold whereas Maria and Leroy consider they should be allowed to continue to reside there. They have stated they would be willing to pay their fellow siblings what they have termed “generous weekly rent” and to ensure that the property is properly maintained.
Jameson who is supported by Leroy but strongly opposed by Peter, is very resentful both about his past treatment and being left out of his mother’s will. He considers he should have an equal share of his mother’s estate and threatens to issue court proceedings. Peter, Paul and John are unhappy about what they see as Leroy and Maria’s unreasonable continuing occupancy of Antonia’s home.
Leroy and Maria consult one firm of solicitors, Jameson another, while Peter, Paul and John contact a third firm. All three firms explain to their clients that although there is a considerable amount of money in Antonia’s estate there is a danger that if the case goes to court a lot of this money will go to towards paying legal fees and the siblings will not derive very much benefit. All six interested parties are employed but none of them is well paid and they question whether they will be able to fund what Leroy terms “a full-blown court case”.
A two-day mediation is arranged. Towards the end of the second day the parties reach an agreement that is acceptable to all including Jameson. No lawyers attend the mediation sessions. Instead during breaks in the mediation their clients speak to them on the telephone and the solicitors help oversee and advise on the written terms of settlement.
Aside from the costs savings that are explained below, a case that might have taken two years to resolve has been settled in only a few weeks. The parties have not had to raise the necessary money to fund a court case and none of them has had to take too much time off work.
The table below is for guidance only and gives an outline of the cost implications of this case study.
|Costs of the two-day mediation
These included the mediator having preliminary discussions with all parties and in some instances their solicitors and reading a modest number of letters and documents.
daily rate £1250 per day plus VAT of £250.
Venue hire fee of £600 per day plus VAT £120
|Incidental legal costs for solicitor input during the course of the mediation
Approximately £500 plus VAT per firm giving a total of £300
|Additional legal costs for advice given prior to the mediation
Assume that the two firms of solicitors representing Leroy/Maria and Peter/Paul/John spend four hours per firm as an hourly rate of £300 plus VAT. (Total £720)
Jameson’s solicitors who were in the process of getting ready to issue court proceedings have spent 8 hours at £300 plus VAT (£2400)
NB. It should be borne in mind that £300 per hour plus VAT is a modest hourly rate.
|Total mediation costs||Total legal costs|
|Total = £4140 divided six ways
£690 per party.
|£4920, the equivalent of £820 per party|