1. INTRODUCTION
Mediation has been a familiar concept for several decades, but its importance as a means of resolving disputes has gained greater recognition in recent years. This is particularly prevalent surrounding the ever-increasing procedural complications and costs of litigation. Not to mention the volume of cases passing through the court, which is blocking the system and causing delays in cases reaching trial.
Judges have become much more proactive in not only recommending that parties use mediation but also ordering them to do so. While it’s one among several types of Alternative Dispute Resolution (ADR), it can be regarded as a mainstream method. In this article, we consider how mediation may be used in everyday court practice.
2. MEDIATION –WHAT IS IT?
It’s easier to describe mediation by what it isn’t; the mediation day is not a formal court setting, and the mediator is not a judge. The Mediator isn’t there to judge the parties’ contentions but instead, to act as a neutral facilitator, assisting the parties in reaching their own resolution.
The prejudice-free, confidential nature of mediation are the two key aspects that enable mediation to work. The ‘without prejudice’ nature ensures the matters disclosed and conceded during the process cannot be used in later court hearings. The confidentiality factor, especially in caucus sessions, encourages participants to be open with the mediator.
In the UK, mediation has become firmly embedded in the dispute resolution psyche.
3. THE ENGLISH COURTS’ PERSPECTIVE
English courts aren’t just supportive of mediation, they’ll even order the parties to opt for the process. The English Civil Procedure Rules set out pre-action protocols for different types of disputes (e.g. personal injury, professional negligence and construction) and, just in case anything has been missed, there is a general preaction protocol where a specific protocol does not exist. All the protocols have a common theme: the parties must “consider the use” of alternative dispute resolution before issuing proceedings in the UK.
A refusal to engage in ADR without a reasonable excuse may be met with a penalty in the form of an adverse cost award against the refusing party. There were often lengthy arguments before the courts over whether there was a good reason to decline to take part in mediation, and the outcomes were not always consistent.
There had, for many years, been debate over whether mediation should be compulsory. It is not (unlike in some countries) presently compulsory to use mediation before commencing court proceedings.
Compulsion, however, is now coming through the courts. Until 2023 courts were reluctant to compel litigants to go to mediation. In the case of Halsey -vMilton Keynes General NHS Trust [2], Dyson LJ opined obiter that ordering unwilling parties to mediate was an unacceptable obstruction to their right to access to justice and would possibly be a breach of Article 6 ECHR (the right to a fair trial).
In 2021 The Civil Justice Council concluded that mandatory mediation was compatible with Art 6 ECHR because the parties were not compelled to settle and could still resort to the courts.
This was then followed by Churchill -v- Merthyr Tydfil County Borough Council. The court had to decide whether the Claimant should have used the Defendant’s dispute resolution service before going to court.
The Court of Appeal said Halsey was not binding as the comment was made obiter and the courts could lawfully order parties to engage in a non-court-based dispute resolution process (though the Court of Appeal did not go on to order the parties to use mediation in that case).
Following Churchill there have been several instances of courts ordering parties to use mediation, despite opposition from one or both parties. A notable example is DKH Retail Ltd v City Football Group, a trademark dispute over the football kit of a Premier League club. The claimant sought mediation, but the defendant argued that mediation should only be ordered if there was a reasonable prospect of a resolution which the defendant contended there was not. Nevertheless, the court ordered the parties to use mediation; they did, and low and behold, they settled.
Recent developments make it clear: courts now actively require litigants to engage in mediation, highlighting a major shift in civil procedure.
On the other hand, in the recent case of Grijins v Grijins the court refused to make an award of costs against the successful Defendants. The Claimant failed in all his claims but argued that the Defendants’ costs should be reduced by 30%-50% because the Defendants had allegedly failed to engage in mediation. The Judge formed the view that there had not been a refusal on the part of the Defendants to use mediation but went on to say that Defendants could reasonably refuse to engage in mediation if the case against them was hopeless. This is helpful guidance in principle, but how confident can you be that a judge will agree with you that your refusal to mediate was reasonable because the case against the defendant was hopeless? That may not be an easy judgment call to justify, even if ultimately successful at trial.
4. TIMING
Is there an optimum time to engage in mediation? The answer to that is as soon as you can, or to put it another way, as soon as there is sufficient information and evidence available to enable the participants to reach conclusions on their legal and commercial positions to enable them to come to a commercial decision.
Where possible, go to mediation before costs become so high as to become an impediment to resolution.
Practitioners will often say “we must have full disclosure” before mediating. In many cases in England, disclosure is an arduous, painstaking and highly expensive exercise. Parties should consider whether the gains from taking this approach will outweigh the delay and costs of a full-scale disclosure exercise before embarking on mediation.
Ask yourself whether you need every scrap of evidence before you can mediate, because generally, you just need enough for the parties to be able to reach a commercial decision. Furthermore, questions of what might be disclosed before going into mediation can often be agreed through the good offices of the mediator ahead of the mediation day.
It is interesting to compare the approach in civil code countries where document disclosure is not the norm; they are less likely to delay mediation for that reason.
5. CONCLUSION
Mediation is a highly effective method of dispute resolution and should be considered as a mainstream means of dispute resolution. When involved in litigation or prospective litigation, it is essential to consider the use of mediation at every stage of litigation.
The timing of the mediation, however, is also important;, the parties need to have reached a stage where they are ready and willing to engage in mediation.
Generally, the earlier the better, to prevent costs escalating to the point they become an impediment to settlement.
John Abbott FCIArb
Consultant | Disputes
john.abbott@laytons.com
+44 (0)20 7842 8063
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