"We should be doing more to encourage (and perhaps direct) the horse to go to the trough. The more horses approach the trough the more will drink from it. Litigants being like horses we should give them every assistance to settle their disputes in this way. We do them, and the justice system, a disservice if we do not". This is a powerful statement from Sir Anthony Clarke, Master of the Rolls (given at a recent speech on The Future of Civil Mediation), that parties should be encouraged and perhaps directed to engage in mediation. It is the nearest to advocacy for compulsory mediation that has been seen in recent years. Add in the approval of a new EU directive on mediation; alternative dispute resolution provisions in the proposed pre-action protocol for general litigation; as well as changes to the allocation questionnaire and there can be little doubt that there is a renewed momentum in favour of mediation.
EU directive on mediation
The European Parliament and the Council of the European Union have both approved a directive on mediation covering cross-border disputes in civil and commercial matters.
The directive covers the following main areas:
- It gives every judge of all member states the right, at any stage of the proceedings, to invite the parties to attend mediation (or an information session on mediation if available).
- It enables parties to give an agreement concluded following mediation a status similar to that of a court judgment by rendering it enforceable. This is to be facilitated by allowing mediation settlement agreements to be certified and thereafter enforced in the courts of member states.
- As with mediations in England and Wales, it ensures that mediation takes place in an atmosphere of confidentiality.
- The provision of the directive on periods of limitation and prescription will ensure that, when the parties engage in mediation, any such period will be suspended in order to guarantee that they will not be prevented from going to court as a result of the time spent on mediation. This is designed to allow parties to access mediation without fear of jeopardising their right to bring proceedings in court.
Member states will have 36 months to convert the new rules into national law.
Proposed general pre-action protocol
Pre-action protocols were introduced to facilitate the settlement of disputes (or at the very least, the narrowing of live issues) before the parties resorted to the courts. They stress the importance that is placed on parties considering whether some form of alternative dispute resolution would be more suitable than litigation.
The Civil Justice Council recently consulted on a new general pre-action protocol to apply to all cases that are not currently covered by an existing pre-action protocol. The proposed protocol provides that the parties must consider whether some form of alternative dispute resolution (ADR) might enable them to settle the dispute without starting a claim. The court may require evidence that the parties have considered some form of ADR.
The courts take the view that starting a court claim is a step of last resort, and that claims must not be started prematurely when a settlement is still actively being explored. One of the options given for resolving disputes without starting a claim is mediation. The protocol adds that the parties must keep open the possibility of negotiating a settlement at all times. This still applies after a court claim has been started, up to and during any trial or final hearing.
The court's case management allocation questionnaire (which is sent out to the parties and asks a number of questions about the case) has also been amended. It now provides that the parties should make every effort to settle their case by discussion or negotiation (such as a roundtable meeting or settlement conference) or by a more formal process such as mediation. The court will also want to know what steps the parties have taken to resolve the matter.
Legal representatives are now required to confirm that they have explained to all clients the need to try to settle, the options available and the possibility of costs sanctions if they refuse to settle. All parties are now required to:
- Indicate whether they want to settle the claim
- Confirm whether they want the court to order a one month stay
- Indicate whether they wish the court to assist in arranging a mediation
- Give reasons if they indicate that it would be inappropriate to settle the claim at this stage.
In light of the comments of the Master of the Rolls that parties should be encouraged and perhaps directed to engage in mediation, parties can expect (and should be prepared for) more robust directions from judges to encourage mediation at an earlier stage in litigation than we have seen in the past.
If you want to encourage the other side to mediate at an early stage, you will have in mind the views of the Master of the Rolls, the EU directive on mediation, the proposed general pre-action protocol and the changes to the allocation questionnaire as part of your armoury. Equally, you may find that if the other side is keener on mediation than you are, these developments are thrown at you!