Mediation In Inheritance Disputes

Mediation continues to be on the rise and is a more popular method of resolving disputes than trial at Court, particularly so in trust and inheritance dispute cases.

Individuals who are to receive an inheritance from family and friends are reluctant to risk losing their inheritance through the costs of litigation. This is the same for charities that regularly receive legacies under a Will. The trustees of the charity are under a duty to ensure that the charity receives the maximum benefit from that legacy. Mediation is therefore an extremely attractive and popular tool for resolving this type of dispute.

What is mediation?

Mediation is an out of Court method of resolving disputes. An independent third party, the mediator, will assist both sides to come to an agreement that will end the dispute.

Both parties will prepare their best case for mediation and their legal representatives will advise on offers made that they consider should or should not be accepted, in order to avoid the risks of litigation.

A meditation will usually last anywhere between a few hours up to a whole day. In more complicated disputes they can be spread over several days. The parties will sit in separate rooms and the mediator will travel between each room to deliver offers and information made by one party to the other.

Sometimes, mediators find it beneficial to have a joint meeting with both parties present at the beginning of the mediation so the parties can try to understand the other’s case. This may not always be a good idea where emotions are high between family members. The mediator will only suggest this if both parties feel comfortable with it.

The mediator’s job is to push the parties toward the direction of settlement. They will remind the parties of the reality of taking the case to Court proceedings, the risks involved in it and the benefits of resolving the dispute early on. The mediator will not force the parties into a settlement that they are unhappy with but the idea is that both parties come to a resolution that they can both live with in order to avoid the risk of their worst-case scenario.

The Court will take a negative view of a party that declines mediation or another form of ADR (Alternative Dispute Resolution), especially when one party is willing and the other refuses. A party may win at trial after refusing an offer to mediate from the other party, but the Court may see their refusal as unreasonable conduct and lower their award for their costs to be paid from the other party as a result.

Advantages of mediation in inheritance disputes

  • Time – Parties can decide to go to mediation at any point in a dispute. A case from start to finish could take up to 18 months or even longer. Litigation can be very stressful for all parties involved and mediation could assist with a settlement much earlier on. Mediations often settle on the day or shortly afterwards as both parties could be close to a settlement but may need more time to think it over.
  • Control – Parties have more control over the terms of the agreement whereas at trial, a Judge will decide on the outcome.
  • Costs – There are costs involved in mediation, solicitors and mediator’s fees; however, the costs are going to be substantially lower than the costs involved to trial. Your legal representative will advise on the potential cost outcomes. It is important to remember that the settlement sum that you accept at mediation may not be your best outcome, but if you weigh the costs risks of going to Court, you could end up in a worse position overall.
  • Confidentiality – Discussions in mediations are without prejudice, which means that parties cannot refer to the discussions and offers made at mediation should the case not settle that day. If the parties reach an agreement, a settlement agreement will be drawn up and this should contain a confidentiality clause so that the terms of the settlement are kept confidential. This differs to Court proceedings, which are in public and the decision made is a matter of public record.

It is important that parties obtain advice on the settlement at the early stages of the case, especially when the estate is of modest size and could be depleted quickly with legal costs. Parties should seriously consider the risks involved in Court proceedings and be open to mediation, which could save a lot of time, stress and costs.

How Nelsons can help

If you have any questions concerning the topics discussed in this article, please contact a member of our Dispute Resolution team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online enquiry form.

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