There is no overarching statute governing mediation in England and Wales. Instead, a party who wants to know about mediation must turn to the civil procedure rules, court guides and the (now) many judgments that talk about it.
Ireland is taking a different approach. Currently, the Oireachtas is considering the Mediation Bill 2017, a 24-page document that seeks to codify the mediation process and dovetail it with the courts.
Some provisions in the Bill aren’t commonplace in England and Wales. However, the fundamental principles of mediation do appear, namely the encouragement of mediation (and its voluntary nature), costs penalties for those that unreasonably refuse and confidentiality.
This blogs looks at those principles and how the Mediation Bill treats them.
Encouraging, not compelling, parties to mediate
The principle in Halsey v Milton Keynes General NHS Trust that the court’s role is to encourage, not compel, ADR is well-known. No bold judge has taken up Ward LJ’s 2013 invitation (in Wright v Michael Wright) to rule on questions about Halsey so it can be looked at again and little notice seems to have been taken of Norris J’s standard order in Bradley v Heslin imposing a two-month stay for mediation in boundary and right of way disputes.
Ward LJ was frustrated by it not always being:
“… possible to shift intransigent parties off the trial track onto the parallel track of mediation.”
Norris J felt opportunities were not being taken and warnings were not being heeded, and those embroiled in in boundary and neighbour disputes needed saving from themselves. However, many (including Kelly J in Ryan v Walls Construction Ltd), still consider that compelling parties to mediate dilutes its prospects of success.
The Mediation Bill 2017 encourages, rather than compels, parties to mediate. Parties to a dispute may engage in mediation “as a means of attempting to resolve the dispute” and participation in mediation is “voluntary at all times” (section 6). Even if proceedings are issued and/or pre-action mediation fails, further encouragement to think about or attempt it again may come from the court. This is because the Bill proposes that the court may, on the application of a party or on its own motion, invite the parties to consider mediation as a means of attempting to resolve the dispute and provide information about the benefits of mediation to settle the dispute (section 16(1)). And this power is without prejudice to any other discretionary power the court may exercise with a view to facilitating resolution of a dispute (section 16(5)).
However, the Mediation Bill does contain a different form of compulsion (in sections 14 and 15). Solicitors (and barristers who are issuing proceedings for clients not represented by solicitors) shall, prior to issuing proceedings:
- Advise clients to consider mediation as a means of attempting to resolve their dispute.
- Provide information about mediation services, the advantages of resolving the dispute otherwise than by way of the proposed proceedings, the benefits of mediation, confidentiality and the enforceability of mediation settlements.
And advising is not enough. When proceedings are issued, evidence shall be provided, by way of a statutory declaration that the solicitor or barrister (where appropriate) has done this (section 14(2)). And if no such declaration appears, proceedings will be adjourned for a reasonable period to allow the declaration to be made (section 14(3)).
Costs penalties for those that unreasonably refuse
Halsey established the principle that a successful party may be penalised in costs if it unreasonably refuses to participate in ADR. Numerous cases have followed where parties have been denied costs (for example, see PGF II SA v OMFS Company 1 Ltd) or a losing party has been ordered to pay costs on an indemnity basis (for example, see Garritt Critchley v Ronnan). It is this risk that often weighs on parties’ minds when they are considering whether to mediate.
This well-known principle appears in section 21 of the Mediation Bill. This provides that in awarding costs in respect of proceedings a court may, where it considers it just, have regard to any unreasonable refusal or failure by a party to consider using mediation and any unreasonable refusal or failure to attend mediation “following an invitation to do so” under section 16(1) (which deals with invitations to mediate on the courts own motion or the application of a party).
As section 16(1) only comes into play after proceedings have been issued, section 21 appears narrower than the position in England and Wales where all unreasonable failures (pre-action or not) count. CPR 44.4(3) (factors to be taken into account in deciding the amount of costs) says the court will have regard to the conduct of all the parties, including, in particular, conduct before as well as during the proceedings, and the efforts made (if any) before and during the proceedings in order to try to resolve the dispute. Indeed, in Garritt Critchley, HHJ Waksman referred to the letter before action that stated the claimants were willing to enter into an appropriate form of ADR, such as mediation at the appropriate time.
Mediation is confidential
The principle that (subject to limited exceptions) what happens at the mediation is confidential and without prejudice is also well-known.
Confidentiality works in two ways:
- The whole process is confidential as between the parties, and between them and the mediator (see Farm Assist Ltd (In Liquidation) v Secretary of State for the Environment, Food and Rural Affairs).
- The mediator is told things privately by the parties that cannot be repeated without the permission of the party who gave that information.
Without this protection, parties would not feel able to be open about their positions (with the mediator or each other), or engage in commercial and practical thinking.
Section 10 of the Mediation Bill says that, subject to a number of carve-outs:
“… all communications by the mediator with the parties and all records and notes relating to the mediation shall be confidential and shall not be disclosed in any proceedings before the court or otherwise.”
One carve-out appears in section 17 where, following an invitation by the court under section 16(1), the parties mediate but then subsequently apply to re-enter the proceedings. Here, the mediator shall report to the court and (unless otherwise agreed or directed) give an advance copy of the report to the parties. That report shall set out a number of matters, including:
- In a settled case, a statement of the terms of the mediation settlement.
- In a partially settled case, a statement of “such matters not resolved”.
- In a case where no mediation settlement has been reached, whether “in the mediator’s opinion” the parties “engaged fully” in the mediation.
How section 17 sits with the principle of confidentiality is unclear. The court will not be party to the agreement to mediate or the provision that the mediation is to be conducted in a confidential manner (section 7), and the mediator can never repeat matters he or she has been told about privately (to the court, other parties or otherwise). It is also unclear whether the judge may refer to what is said in the report in open court and if the report is only to be read after the judge has decided the case (and is looking at costs).
The obvious advantage of what Ireland is doing is that everything about mediation can be found in one place, whereas parties in England and Wales must instead keep in mind the fundamental principles. Of course, the fact that these principles appear in the Mediation Bill serves to emphasise their importance to all parties and practitioners in England and Wales.
And the Mediation Bill contains so much more than I have set out here. Mediators and practitioners world-wide should be watching the progress of the Mediation Bill with interest.