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DEC App 1.7 Setting up the mediation

DEC App 1.7.1G

Once the parties have agreed to mediate, and a mediation notice has been sent to the mediation provider, the mediation provider will liaise with the parties in order to deal with the matters set out in DEC App 1.7.2 G to DEC App 1.7.11 G.

Appointment of mediator

DEC App 1.7.2G
  1. (1)

    The mediation provider will maintain a panel of suitable mediators, and recommend in each case a mediator to the parties. The parties are free to accept or decline the recommendation. If either party declines the recommendation, the mediation provider will seek to obtain agreement on another mediator from the panel.

  2. (2)

    If the parties cannot agree a mediator within 7 days of the mediation notice being received by the mediation provider, the mediation provider will appoint a mediator.

  3. (3)

    The mediators on the panel will all be:

    1. (a)

      experienced commercial mediators; and

    2. (b)

      accredited by or registered with a recognised mediation organisation.

  4. (4)

    Experience of and expertise in the financial services sector will not be compulsory for panel mediators, but may be desirable.

  5. (5)

    Mediators will, in accepting appointments, be required to confirm to the parties that they have no conflicts of interest in doing so.

Date for mediation

DEC App 1.7.3G

The mediation provider will liaise with the parties and the mediator to agree:

  1. (1)

    a suitable date for the mediation; and

  2. (2)

    a timetable for the mediation process as a whole, including the date for submission of case summaries and exchange of documents referred to in the case summaries.

Duration of mediation

DEC App 1.7.4G
  1. (1)

    Most mediations should last no longer than one full day, but in complex cases more time may be necessary. The mediator will assist the parties in deciding how much time to set aside. If the mediation requires more time than allotted to it, the parties may ask the mediation provider to set up a further day or days.

  2. (2)

    The parties and the mediator will use their best endeavours to complete the mediation as soon as practicable.

Mediation timetable

DEC App 1.7.5G
  1. (1)

    In complex cases, the agreed timetable may extend beyond the initial extension agreed by the RDC, in which case the parties may request a further extension from the RDC (see DEC App 1.6.4 G).

  2. (2)

    If the mediation has not started within the allotted timetable, the FSA may decline to mediate, and the matter will be referred to the decision notice stage.

Venue

DEC App 1.7.6G

The mediation may take place at any venue acceptable to the parties and the mediator. This may be at the offices of the mediation provider, the mediator (if different), the FSA or elsewhere.

Mediation agreement

DEC App 1.7.7G
  1. (1)

    Each mediation will take place in accordance with the terms of a mediation agreement. The agreement will set out the terms on which the mediation will take place, in particular, the agreement will provide that:

    1. (a)

      the mediation will be on a "without prejudice" basis and confidential; and

    2. (b)

      the parties who attend the mediation will have authority to agree proposed settlement terms (subject, in relation to the FSA staff, to App 1.7.9G).

  2. (2)

    The mediation agreement will be signed by the parties, the mediator and the mediation provider.

Confidentiality

DEC App 1.7.8G
  1. (1)

    Confidentiality is a key element of the mediation process. It means that:

    1. (a)

      matters disclosed in, and documents created for the purposes of, the mediation cannot be referred to in the public domain; and

    2. (b)

      matters disclosed by one party to the mediator in confidence will not be disclosed to the other party without consent.

  2. (2)

    Under the mediation scheme, however, confidentiality will be limited in that:

    1. (a)

      if any information indicating potentially criminal conduct is disclosed to the mediator, the mediator will not be required to keep that matter confidential (and may choose to terminate the mediation);

    2. (b)

      the terms of any settlement reached will, if approved by the RDC, be incorporated in a decision notice, and subsequent final notice or second supervisory notice, or (where appropriate) notice of discontinuance which may be made public;

    3. (c)

      the FSA may publish information regarding the operation of the scheme on an anonymous basis in the FSA's annual report; such information may include, for example, the number of mediations conducted under the scheme and the number of those mediations which have resulted in agreed settlements.

  3. (3)

    In all other respects, documents prepared for the purposes of, and discussions taking place in the course of, the mediation will retain the confidential status they had during the mediation itself.1

Authority to settle

DEC App 1.7.9G
  1. (1)

    A key feature of mediation is the requirement that those who attend the mediation on behalf of each party have full authority to agree proposed settlement terms. In general, the FSA's decision making procedure for regulatory enforcement cases requires that the RDC approve any decision to take or refrain from taking disciplinary action. (The exception is some cases involving late submission of reports, see DEC 4.5.2 G to DEC 4.5.6 G) Therefore, the RDC must approve any proposed settlement terms agreed at the mediation.

  2. (2)

    The FSA will be represented during the mediation proceedings and at the mediation itself by the FSA staff who initially recommended that disciplinary action be taken. In order to minimise the risk that the proposed settlement terms agreed at the mediation will not be approved, the FSA will endeavour to ensure that the relevant members of the RDC, or as many of its relevant members as possible, are available for consultation by telephone during the mediation. This is to enable a clear indication to be given to the parties and the mediator whether the RDC will find the proposed settlement terms acceptable.

  3. (3)

    However, no involvement of the RDC in the mediation will in any way compromise its right subsequently to decline to approve the settlement terms.

  4. (4)

    If the RDC decides to decline to approve the settlement terms agreed at the mediation, the parties may, with the consent of the RDC, return to the mediation process if they wish to explore further settlement options. If they do, the RDC will ensure that its views are clearly stated as to why the terms previously agreed were not acceptable.

Paperwork for the mediation

DEC App 1.7.10G
  1. (1)

    Mediation requires the parties to be able to discuss the dispute in an informed way. Therefore, each party attending the mediation will be required to produce:

    1. (a)

      a short case summary setting out the issues in dispute; and

    2. (b)

      any documents referred to in the case summary.

  2. (2)

    These documents must be submitted to the mediation provider in triplicate at least one week before the mediation. The mediation provider will be responsible for the exchange of documents.

  3. (3)

    The parties and the mediator may agree to dispense with the requirement to produce documentation before the mediation.

Costs

DEC App 1.7.11G
  1. (1)

    The costs of the mediation provider in administering and conducting the mediation process (including the fee payable to the mediator) will be agreed between the FSA and the mediation provider when the mediation provider is appointed.

  2. (2)

    For each mediation, the mediation provider will invoice the parties for the anticipated costs of administering and conducting the mediation in advance. The FSA and the person will bear half of these costs each. Any additional costs incurred by the mediation provider will be invoiced after the mediation. These costs will also be shared. The costs referred to in (1) and (2) do not include legal or other costs that the FSA or person may incur in relation to the mediation, which will be the responsibility of the parties.