The Ministry of Law ("MinLaw") launched on 17 March 2016 a public consultation on the draft Mediation Bill ("Bill"). The introduction of the Bill gives effect to one of the recommendations made by the International Commercial Mediation Working Group ("ICMWG") to strengthen the overall framework for mediation in Singapore.
The ICMWG was commissioned in 2013 to propose plans to develop the international commercial mediation space in Singapore. Its recommendations were accepted by the Government in December 2013. The other three recommendations made by ICMWG related to:
- the establishment of the Singapore International Mediation Centre (“SIMC”) to provide world-class mediation services;
- the setting up of the Singapore International Mediation Institute (“SIMI”) to set professional standards for mediators; and
- the extension of relevant tax exemptions and incentives applicable for arbitration to mediation.
The above proposals have been implemented. The SIMC and the SIMI were launched in November 2014, while withholding tax exemptions for non-resident mediators have been available since in April 2015. MinLaw now seeks feedback from relevant stakeholders and the public in general to give effect to the ICMWG’s last key recommendation. In preparing the draft Bill, MinLaw took into account other existing mediation legislation including UNCITRAL Model Law on International Commercial Conciliation. The public consultation closes on 28 April 2016.
Key Features of the Draft Bill
Stay of court proceedings
The draft Bill will provide a statutory basis for parties to apply to court to stay the proceedings while parties enter the mediation process. It also allows the Court to make interim or supplementary orders to preserve the rights of parties pending the outcome of the mediation.
Confidentiality of mediation proceedings
While a mediation process is regarded as private and confidential, the scope of such confidentiality is not clear. The draft Bill codifies the general duty of confidentiality applicable in mediation, and sets out the circumstances in which disclosure may take place. The circumstances under which disclosure may take place include that where the disclosure is made with the consent of all the parties to the mediation, and where the mediation communication has gone into the public domain. A mediation communication may also be disclosed if there are reasonable grounds to believe that the disclosure is necessary to prevent or minimise danger or injury to any person.
The draft Bill also stipulates that a mediation communication may be admitted in evidence in court, provided leave of court is obtained and the reasons for such disclosure are those enumerated in the legislation.
Recording of mediated settlement agreement as Court Order
The draft Bill allows parties to apply to court by agreement to record a written and signed mediated settlement agreement as an order of court if the mediation has been (a) administered by a designated mediation service provider and (b) conducted by a certified mediator. The application must be made within a prescribed period or such longer period as the court may allow.
Legal Profession Act Exceptions
The ICMWG had proposed to extend to mediation the existing Legal Profession Act exceptions that are applicable to arbitration. These exceptions provides that participation by foreign arbitrators and foreign- qualified counsel in arbitration proceedings involving Singapore law does not amount to unauthorised practice of Singapore law.
Mediation, unlike arbitration, does not typically involve the practice of law, and often does not refer to legal principles at all. Nonetheless, in certain cases discussions in mediation sessions may touch on certain laws and legal principles. The draft Bill stipulates that, similar to arbitration, the participation by foreign mediators and foreign-qualified counsel in such mediation sessions does not constitute unauthorised practice of law.
In conclusion, the draft Bill is a timely and much needed piece of legislation because it finally accords legislative recognition to the importance of mediation as a recognised and established form of dispute resolution, allowing mediation to now formally discard its sometimes unfortunate label of being an "alternative dispute resolution" process.
Given that mediation does not focus squarely on legal merits and jurisdictional issues, it would also serve to broaden Singapore's appeal as a port of call for International Mediation cases. Mediation may not be suitable as a dispute resolution tool for all types of cases, but it is surely reassuring to know that it has been given the proper standing to ensure that for those who do choose to use it, whether to save costs, preserve relationships or generate solutions that litigation or arbitration as adjudicative processes do not allow for, the law in Singapore will now support and provide the enforcement framework for this choice.
This unavoidable trend and increasing support for the use of mediation as one of the recognised forms of dispute resolution comes with a proven track record of its effectiveness in resolving disputes, not just in small claims or family disputes where the flexibility of the solution can be readily appreciated. Even for complex and high value disputes, the potential for mediation as a tool to effectively and efficiently assist parties in reaching a mutually amicable solution is one that is often underutilised until hefty legal costs have already been incurred.