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Timeshare mediation in the legal profession is a relatively new concept. It is widely introduced and is becoming an effective way of resolving timeshare related disputes without the need to go to court. Timeshare mediation involves an independent third party i.e. a mediator who supports both sides, to come to an agreement about the issues which they have with each other.

Mediation is a very fluid and flexible process and can effectively be employed to settle many disputes in a complete range of situations such as:

  • Timeshare constitutional disputes
  • Timeshare contract disputes
  • Club disputes
  • Damage related disputes
  • Exit disputes
  • Maintenance fee-related disputes
  • Gerrymandering and voting-related disputes

The role of the independent mediator is to support parties in reaching a solution to a problem and to arrive at an outcome that both parties are happy to accept and consent to. Mediators avoid taking sides, making judgments or giving legal or moral guidance. They are simply responsible for developing effective communications and building an accord between the warring parties. The focus of a mediation meeting is to grasp a common-sense settlement which is agreeable to both parties.

Timeshare mediation is entirely a voluntary process and will take place if both parties are in full agreement. It is a confidential process where the terms and discussion are not disclosed to any party outside the mediation hearing.

If parties are incapable of reaching an agreement, they can still go to court. Details about what went on at the mediation will never be disclosed to the court and/or used at any forward court hearing.

Both parties share the cost of timeshare mediation and such costs will entirely depend on the value and intricacy of the claim.

Mediation can be faster, less stressful and more economical than going through the litigious process and a potential trial at court.

Once a settlement has been reached a mediation covenant can be drawn up. Parties tend to keep to the mediation agreement because they have prepared the terms themselves.

What if a party refuses to consider timeshare mediation?

In a recent UK Court of Appeal, judgment demonstrated a clear endorsement of mediation between disputing parties. It makes it abundantly clear to a party who refuses to acknowledge or engage in an invitation to participate in mediation can face significant cost penalties.

In PGF II SA v OMFS Company 1 Limited [2013], the court found that the defendant had “unreasonably refused to mediate” and was consequently deprived of costs to which it would otherwise have been entitled. The defendant had received two “serious and carefully formulated” invitations to mediate and failed to respond to them both. This silence amounted to a refusal to mediate, and the court found that the refusal was unreasonable.

This judgment endorses the advice given in the Alternative Dispute Resolution (ADR) Handbook.

The silence of one party to an invitation to participate in ADR is, as a general rule, unreasonable, regardless whether the party has actually refused. If however, a party refuses to engage in the type of ADR requested, or to do so at the time requested, that might have been justified by the identification of reasonable grounds.

While it has long been established that an unreasonable refusal to mediate can be penalised in costs, PGF II SA v OMFS is the first judgment to confirm that a party’s silence, when invited to mediate, can equally be considered as unreasonable and have consequent costs sanctions. It has been common for some firms/companies who operate in the timeshare industry to ignore consumers and play games in silence.

Last modified: 3rd September 2020