In England and Wales, recent case law highlights that parties in commercial litigation risk adverse costs sanctions if they unreasonably refuse to mediate or if they ignore a request to mediate without providing any justification. Whilst judges cannot compel parties to mediation, many judges appear to take an active role in case management issues and are keen to encourage parties to agree to mediation.
Whilst mediation is not compulsory (unless there is a contractual clause to that effect), there is a growing trend towards parties attempting it, even in cases where it is unlikely to be successful. It is worth remembering that the use of mediation has also long been encouraged in the US. Against this background, it is interesting to canvass the views of lawyers practising in 12 other jurisdictions to ascertain whether the cultural shift towards mediation in the UK is reflective of what is generally happening around the globe.
- France: “There is a clear willingness in France to make mediation more attractive and widely used in commercial and civil disputes, as well as cross-border ones, as confirmed by the recent reform bringing some uniformity between judicial and conventional mediation” Jean-Georges Betto, Partner at Betto Seraglini (Paris);
- Russia: “The use of mediation is increasing in Russia. The Russian Parliament adopted a law on mediation in 2010. The law outlines general principles of use of the mediation in Russia. The law requires the parties to conclude a mediation agreement in order to start the mediation procedure. One of the soundest cases of mediation in Russia was in 2013 when Roman Abramovich became a mediator between Russian businessmen Mr Deripaska and Mr Potanin in relation to their interests in Norilsk Nickel”Alexander Gorlov, General Counsel at Russian Machines (Moscow);
- South Korea: “In South Korea, a mediation is mainly pursued under the Korean court’s supervision in connection with pending or threatened lawsuits. A mediation is often recommended by judges to resolve a dispute finally and conclusively. Mediation by a private mediator is not used very often given the lack of any binding procedure or effect” Jung Ked Suh, Partner at Kim & Chang (Seoul);
- Australia: “Mediation and negotiated settlement are now first ports of call and it is no longer regarded as a sign of weakness to suggest these alternatives. While there is a place for litigation, it is regarded by commerce as slow, distracting and expensive” Sid Wang, Partner at Clayton Utz (Sydney);
- Thailand: “Mediation in Thailand is very common especially court-supervised mediation. In 1996, the president of the Supreme Court issued practice suggestions encouraging all civil court judges to start court-supervised mediations whenever the presiding judge believes there is a reasonable chance of amicable settlement among the parties” Thawat Damsa-ard, Partner & Chief Litigator at Tilleke & Gibbins (Bangkok);
- Israel: “In light of the heavy workload of the courts in Israel, the courts have become very active in trying to refer proceedings before them to mediation, and are making efforts to try and receive the parties' consent to adjudicate matters vis-à-vis mediation or other forms of ADR. Therefore, many cases are referred to mediation (there are also mandatory pre-mediation meetings in claims up to 1 million NIS). Since the mediation process in Israel is privileged, and parties cannot use any of the information exchanged during the mediation in future court proceedings, plaintiffs and defendants alike are inclined to agree to refer claims to mediation, even if those are not resolved eventually” Zohar Lande, Partner at Barnea & Co Law Offices (Israel);
- Italy: “Italian mediation law provides a mandatory pre-trial mediation in relation to some subjects which is mitigated by an “opt-out” mechanism. This system led mediation to be commonly used, even in subjects where it is not mandatory” Prof Giulio Ponzanelli, Partner at Bonelli Erede Pappalardo (Milano);
- Turkey: “Turkey, both in judicial culture and public awareness, is certainly not yet ready for such a flexible and voluntary alternative dispute settlement method and thus the new born “mediation” will need a long time and hard work. Moreover, there is a serious question mark how cross-border practice in disputes with foreign element will develop since it is mandatory to be Turkish citizen in order to be a registered mediator and a foreign entity would most probably refrain from being a party to a mediation proceeding with a Turkish entity” Efe Kınıkoğlu, Senior Associate at Cerrahoğlu Law Firm (Istanbul);
- New Zealand: “With increasing pressure from the Courts for parties to explore ADR options including the use of judicial settlement conferences, mediation remains a preferred forum of choices for parties to litigation in New Zealand” Angus Wakeman, Solicitor at Jones Fee, (Auckland);
- Switzerland: “Mediation has all it needs to succeed: training programmes and bar certifications for mediators and counsel; and a new civil procedure code inciting parties to mediate. However, there is still marked reluctance by counsel and parties to depart from the old ways and give mediation a try” Guillaume Tattevin, Partner at GCG Tattevin (Geneva);
- Morocco: “Mediation is indeed possible under Moroccan law and is regulated in the Civil Procedure Code. It is subject to the parties' consent further to a dispute. Mediation is starting to be more widely used in Morocco”Rachid Benzakour, Partner at Benzakour Law (Casablanca);
- Jersey: “Mediation is common in contentious litigation in Jersey and leads to the resolution of a substantial proportion of cases before the Royal Court. The importance attached to mediation by the Royal Court in Jersey cannot be underestimated. The Jersey civil procedure rules require the timing and feasibility of mediation to be discussed early on when directions are given for the conduct of the proceedings following close of pleadings, and there are costs sanctions for unreasonable failure to mediate. Mediations in high value claims will normally involve London-based mediators and follow the same process as will be familiar to litigators in the city. If parties have not attempted to mediate then the Court will penalise in costs. All practitioners are, accordingly, on notice and we have not done a significant case recently where mediation has not been, at least, attempted” Marcus Pallot and Andreas Kistler, Partners at Carey Olsen (Jersey).
Mediation, as a global trend, appears to be increasingly popular and widely used, even though the practice varies from one country to another mainly due to the cultural and legal differences existing in each jurisdiction, including in civil law jurisdictions which are perhaps more well-known for aggressive litigation rather than alternative dispute resolution (ADR).
Most lawyers in this jurisdiction would be against a more dramatic change in England and Wales whereby mediation becomes compulsory. This is because mediation will generally only be an effective method of ADR if parties want to mediate, genuinely consent to and engage in the process and do so at the right time. In any event, there will be a rise in the number of mediations in England and Wales so long as litigants are placed under increasing pressure by the Courts to explore other methods of resolving claims. From a quick glance at the foreign lawyers’ comments above, we also expect that trend to be reflected in most other jurisdictions, although it may be quicker in some jurisdictions than others.