1. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 How Mediation Can Benefit Charities Chris Longden October 2012 1

2. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 2 What is mediation? The appointment of a neutral and independent person – the mediator – to help parties to a dispute reach a negotiated and legally binding settlement The mediator is not a judge The process is without prejudice Mediation can take place before or during formal litigation 2

3. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 3 Mediation process Procedure is flexible Normally starts with an open discussion session The parties then retire to separate rooms The Mediator holds confidential discussions with each of the parties in their respective rooms 3

4. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 4 Mediation process (cont’d) The Mediator can receive information from each party either confidentially or for the purposes of communication to the other party. The aim is to lead to a negotiated settlement which will be contained in a written agreement 4

5. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 5 How can mediation help charities? British Diabetic Association v Diabetic Society Ltd [1995] “Charities solicit donations from the public…in the expectation that donations will be well spent on furtherance of the charity’s purposes. Even for a lawyer it is a difficult feat to recognise this very expensive litigation as helping the diabetics whose subscriptions and gifts will be the ultimate source for payment of the lawyers’ bills. I very much hope that both sides will do their utmost to see that this sort of squabbling and sniping now ceases, because it lowers the parties, and indeed charity generally, in the eyes of the general public on which charity depends for support.” Walker J 5

6. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 6 How can mediation help charities? (cont’d) Muman v Nagasena [1999] “In this case very substantial sums of money have been spent on litigation without achieving a resolution. The spending of money on this kind of litigation does not promote the religious purposes of this charity. It is time for mediation. No more money should be spent from the assets of this charity until…all efforts have been made to secure a mediation of this dispute..”. Mummery LJ 6

7. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 7 How can mediation help charities (cont’d) Mediation is statistically very successful Can mediate about internal or external disputes Saves legal costs and time of litigating If successful enables charities to continue to function without continued distraction Confidentiality 7

8. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 8 How do I mediate? Modern form governing documents will normally grant the power to trustees to enter into a compromise agreement New model governance documents from the Charity Commission require mediation for those involved in the charity before resorting to litigation There is a wide range of bodies who offer mediation services 8

9. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 9 What does it cost? Cost will vary and will largely depend on the amount in dispute The cost will always be considerably less than litigating 9

10. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 10 www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 Summary Mediation is now difficult to avoid – but very effective “To jaw-jaw is always better than to war- war” (Winston Churchill) 10

11. www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 11 www.whitehead-monckton.co.uk ©Whitehead Monckton 2012 Contact Chris Longden 01622 698032 christopherlongden@whitehead-monckton.co.uk 11