The Mediation Act 2017 was signed into law on 2 October 2017 and is expected to come into force in the coming weeks.

The Act encourages the use of mediation which has the potential to:

  • achieve better outcomes for the parties

  • reduce costs and therefore improve access to justice

  • ease strain on the courts system

The Act will place on a statutory footing the obligation to consider mediation. This obligation brings with it the requirement for litigants to confirm to the courts that they have considered mediation. The Act does not apply to arbitrations and certain disputes under tax and customs legislation.

Some of the changes:

  • Solicitors & the obligation to consider mediation: Section 14 of the Act requires "practicing solicitors", prior to issuing proceedings, to advise clients to consider mediation as a means of resolving their dispute and provide clients with information on mediation services. Practicing solicitors are required to make a statutory declaration evidencing that their obligations under this Section have been properly fulfilled. The statutory declaration would accompany the originating document and both are filed in the relevant court office. Solicitors are obliged to provide their clients with information on mediation services and on the advantages and benefits of mediation. Solicitors are then required to swear a statutory declaration confirming that they have provided these advices to their clients. If this is not done, the Court will adjourn the litigation proceedings until the declaration is furnished.

  • The agreement to mediate and stopping the limitation clock: According to the Act, before mediation begins, the parties and mediator must sign an agreement to mediate. This agreement sets out the formalities of the mediation including how the mediation is conducted, the location, confidentiality, the issue of costs, the right to seek legal advice and other terms which the parties or mediator may agree. Signing of an agreement to mediate temporarily stops the clock from running under the Statute of Limitations for a specified period, during which the mediation process is conducted.

  • Confidential process: Under the Act, all communications (including oral statements) and all notes and records relating to the mediation, will be confidential and will not be disclosed in any proceedings before a Court. However, this confidentiality protection will not apply where disclosure is necessary in order to implement or enforce a mediation settlement. Disclosure may also be required by law to prevent physical or psychological injury to a party or to prevent the commission or concealment of a crime.

  • Clarity on the role of the mediator: Under the Act the role of the mediator is to assist the parties in exploring ways to resolve their dispute by agreement. The Act states that it is the mediator's responsibility is to ensure the outcome of the mediation is determined by mutual agreement if possible, and the mediator can only advance his or her own proposals if all parties invite him or her to do so. There exists a provision the parties to apply to the Court to re-enter the proceedings where a settlement is not reached. In this situation, the mediator will be required to produce a report to the Court. This report will not detail what transpired during the mediation and will simply confirm the outcome. Therefore, if mediation took place but the parties were unable to reach agreement, the report will disclose the fact that no agreement was reached (but should not disclose or comment on the positions adopted by the respective parties).

Only time will tell:

  • Costs: A Court may have regard to any "unreasonable refusal" or failure by a party to consider or attend mediation when considering an award of costs meaning that a party 'unreasonably refusing' to engage with the mediation process runs the risk of having to discharge the costs incurred by the other side. The extent to which the Courts will use this provision as the basis to punish those who unreasonably opt-out of mediation is unclear, particularly in light of the parties' constitutional entitlement to have their rights determined by a Court. The Courts currently have the power to penalise parties for an unreasonable refusal to mediate as part of their inherent jurisdiction. Despite this, there has been a reluctance to utilise this power, mainly due to mediation being a voluntary process and the view that parties should not be compelled to mediate where they do not voluntarily agree to it.

  • Establishment of a Mediation Council: The Act has made provision for the possible future establishment of a Mediation Council (the Council). It remains unclear if and when such a Council will be established however; it is also not clear what useful function such a Council would fulfil in practice – the concern is that the introduction of unnecessary overheads and regulation may reduce the uptake on what is intended to be a flexible and party controlled process.

Conclusions

Welcoming the passing into law of the Mediation Act 2017, director general of the Law Society, Mr. Ken Murphy, said he believed the legislation, “can make substantial improvements to the legal system and commercial sector in Ireland”. Mr Murphy said, “The new legislation also means that any settlement reached in mediation can also be enforced by the courts, so offers a greater level of protection and certainty for business". The newly appointed Chief Justice has also welcomed the Act as an important development in improving access to justice in Ireland.

A link to the Mediation Act 2017 can be found here.