Is mediation necessary?

I am the former joint partner of a family business with my brother. We completed a management buy-out (MBO) and very quickly afterwards my brother died.

This has now had some adverse tax consequences for the family and we wish to mediate with the accountants who advised us on the MBO, but did not advise on other potential consequences, such as her death.

However, they are refusing to mediate and say if we wish to contest their advice we will have to go to court. It was my understanding that commercial disputes should at least attempt mediation first – is there any way we can avoid a costly litigation?

Mediation is a process of alternative dispute resolution whereby an independent neutral third party (the mediator) assists the parties at a round-table meeting, to try and achieve a negotiated settlement outside court.

Mediation is confidential, productive and often results in a settlement. Mediation is encouraged by the courts. Any party who unreasonably refuses to mediate, but nevertheless wins their case in court, is likely to be penalised in costs.

There is no obligation on either party to mediate before the court proceedings are issued, but is still unwise for your former accountants to refuse to mediate at some point, because the trial judge may take a different view about the strength of its case, and because mediation may well settle the case and save a great deal of costs.

A carefully worded legal letter should be written.