Mediating relationship disputes involving small property pools

Property settlements involving small pools are often among the hardest disputes to mediate.

The "pool" is the term lawyers use to describe the net value of the property arising from the relationship after deducting the liabilities.

The mediator must of course recognise that even a very modest pool is important to the parties.A problem that can arise is the proportion that the legal costs of the parties bears to the total size of the pool if the dispute is not resolved at mediation and has to go to court.

Regardless of the small size of the pool, the emotional issues between the parties can be just as intense and sometimes more so, with an additional layer of anger arising from a party having to move on from a low asset base.

If the matter has to proceed to court, then it must go through the same steps and stages as a more complex dispute and consequently the legal costs will still be significant, further depleting the already small pool.

The difficulty for the mediator is that he or she may know that it does not make sense for the matter to go to court, however unfortunately the disputing parties may be driven by emotion rather than logic.Regardless of the legal costs that may flow from proceeding to court, pride, emotional pain or wanting to rectify a past wrong may come between a party and settlement, with one or other or both parties refusing to compromise.This is not of course to suggest that one party should compromise for the sake of it where the other party is being totally unreasonable, however if the gap between them narrows to the point where settlement is possible then potential costs should become an issue.

The mediator can only point out the importance of trying to reach a resolution to preserve as much as possible of the pool for the parties.The mediator can feel additional pressure in these circumstances to help the parties achieve a resolution in their own interest, and feel disappointment if not successful.

Sometimes where parties are clearly acting emotionally rather than logically, the answer may lie in referring them to counselling to deal with their emotional issues before attending or returning to mediation and sense may eventually prevail with a settlement being reached before significant costs accrue.

Ultimately however it is the parties' dispute and if a resolution is not achievable then court with consequent costs may unfortunately result.

Mike Emerson