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Making Mediation Mainstream
March 31, 2017
The way litigation is approached is set to shift. The significant proposals emanating from Lord Justices Briggs’ Civil Courts Structure Review and the outcome of Lord Justice Jackson’s Review of Fixed Recoverable Costs are creating waves. Attention may soon be placed on forms of dispute resolution other than the court process, in particular mediation. A recent example of this is the costs judgment of Mr Stephen Furst QC (sitting as a Deputy High Court Judge) in Car Giant Limited Acredart Limited v London Borough of Hammersmith [2017] EWHC 464 (TCC). Here, the timing of the offer, refusal and eventual agreement to mediate was examined as the claimant, who failed to beat the defendant’s Part 36 offer, did not agree to mediate until 17 months after it had been suggested. The defendant sought indemnity costs, unsuccessfully, on the basis of the claimant’s unreasonable delay in agreeing to mediate.
The Judge commented, ‘In my view a court should be slow to conclude that this delay is unreasonable or that, if it is, it would justify an order for indemnity costs….Whilst, in some cases, early mediation is more likely to succeed, it cannot be said to be true in all cases and it cannot be said in this case that had mediation taken place in about May 2015 it would have been or was likely to be successful’.
Each case, as always, depends on its own facts.
While some proceedings are stayed by the courts in order for mediation to take place, there are many other disputes where mediation is not contemplated. One of the reasons is a general lack of familiarity with mediation. The time may have come when specific and pro-active steps need to be taken in order that parties can genuinely consider on an informed basis whether mediation would be appropriate and beneficial in the circumstances of their case.
Examples of how mediation is becoming mainstream can be found internationally. In 2011, against much opposition from lawyers, Italy introduced a mandatory mediation scheme with an incentive that settlements under €50,000 would be exempt from tax. It was short-lived and came to an abrupt end in October 2012 when the Italian Constitutional Court ruled that the mandatory mediation provisions were unconstitutional. The scheme had been reportedly welcomed by those in disputes who perceived mediation as a way of avoiding a potential two year wait and the payment of lawyers’ fees. In September 2013 new mediation rules were re-introduced with modifications, not least that at any stage in proceedings a judge has the power to order the parties to mediate. The four year trial period of these mediation rules ends in September 2017 and the data collected will be interesting to analyse.
In Kenya, on 4th April 2016 the Mediation (Pilot Project) Rules 2015 came into effect and the Pilot in the Commercial and Family Divisions of the High Court at Milimani Law Courts, Nairobi was initiated. The Pilot is a Court-annexed scheme and offers to resolve disputes in a ‘faster, cheaper and more amicable way’. More information can be found here.
Perhaps the moment has come in England and Wales for a more directive approach such as a mediation meeting prior to the issuing of court proceedings. This would ensure parties to a civil dispute are fully aware of what mediation can offer and can reach a reasoned decision to choose mediation – or not. Such a decision could then be relied upon if and when costs are considered at the end of any court proceedings.
