The Mediation Act (the “Act”), which was signed into law on 2 October 2017, places a new statutory obligation on litigants to consider mediation as a means of resolving a dispute. It is due to commence in the coming weeks. This is a welcome development in so far as it will relieve the backlog of cases currently before the courts and will significantly reduce time and costs involved in resolving a dispute for those who engage in the mediation process.
Obligation to Advise Parties to Engage in Mediation
Prior to issuing court proceedings, the Act requires a practising solicitor to advise the client to consider mediation as a means of attempting to resolve the dispute and to provide the client with information in respect of mediation services and the advantages of engaging in mediation. In the event that court proceedings nonetheless commence, the practising solicitor will have to swear a statutory declaration to the effect that this obligation was complied with. If, for any reason, the practising solicitor fails to comply with this obligation, the court has the power to adjourn the proceedings for such period as it considers reasonable to facilitate the solicitor to comply with the obligation. Importantly, in-house solicitors are considered “practising solicitors” for the purposes of the Act and so too must ensure compliance with this obligation.
The Mediation Process
If parties to a dispute do agree to engage in the mediation process, they sign a mediation agreement to that effect. This stops the clock running temporarily under the Statute of Limitations for a specified period to facilitate their engagement in the mediation process. They then have the opportunity to resolve the dispute through negotiation in an informal setting. The role of the mediator is to assist the parties in negotiating a resolution to the dispute. At the request of the parties, the mediator may make proposals with respect to the resolution of the dispute but it remains in the parties’ hands whether or not they decide to accept these proposals.
In the event that a settlement is not reached, the parties to the dispute are at liberty to have the matter re-entered before the court. Under the Act, the mediator is obliged to provide a report which details the outcome of the engagement in the mediation process. However, this report will not provide details as to what transpired between the parties during the process.
Confidentiality and Disclosure
In accordance with this Act, all communication, records and notes relating to the mediation are confidential and cannot be disclosed in subsequent court proceeding with some exceptions. These exceptions include where disclosure is necessary to implement or enforce a mediation agreement, is required by law, is necessary to prevent physical or psychological injury to a party, is necessary to prevent or reveal the commission of a crime, concealment of a crime or a threat to a party or is necessary to prove/disprove a civil claim involving negligence or misconduct on behalf of the mediator.
Refusal to Engage
If a party unreasonably refuses to engage in the mediation process, the Act provides the court with the power to impose a cost sanction on the party. This may result in that party having to incur the costs of the other side. However, in light of the constitutional right of party to bring a dispute before the court, it will be interesting to see the extent to which the courts will exercise this new power.
Mediation is a collaborative process that can prove very beneficial in resolving the most complex disputes. Not only does it provide parties with a means of controlling the manner in which they resolve a dispute, but it can furthermore significantly reduce the costs and time involved. While the engagement of the mediation process will not be appropriate for the resolution of all disputes, this new onus on parties to consider mediation will nonetheless have a significant impact on the nature in which disputes are involved.