Mediation is the New Reality

As published in the Accountancy Plus. ISSUE 04. DECEMBER 2012.

West Cork FCPAs and Certified Mediators Gerard Desmond and Gearóid O’Driscoll provide an update on Mediation and ADR.

Court proceedings are quite often costly and time consuming. Other forms of alternative dispute resolution (ADR), in particular mediation, bring constructive solutions to disagreements saving time and money, helping to maintain and strengthen the relationships between disputing parties. Mediation is a flexible, non-binding dispute resolution process in which a neutral third party (the mediator) assists two or more disputants to reach a voluntary, negotiated settlement of their differences. The parties have ultimate control of the decision to settle and the terms of resolution. The mediator uses a variety of skills and techniques to help the parties reach a settlement, but has no power to make a decision. The parties remain the decision makers and may elect to draw up a formal signed agreement which then becomes legally binding.

Development of Mediation:

Development of mediation in Ireland took place around 2003 when law firms in Dublin became interested in the mediation model and since then it is not unusual to find in many commercial contracts a clause which recognises that in the event of a dispute it would be referred firstly for negotiation between the parties either through mediation or some other form of dispute resolution.

The ongoing development of mediation in Ireland has been driven very much by the courts which brought the following main changes, and which are worthy of mention-

  • The Commercial Court order 63A, which has been on the court list since January 2004, allows the court to adjourn proceedings for up to 28 days to allow for mediation or conciliation to be explored and to allow the awarding of costs to be at the courts discretion.
  • Under Circuit Court rules case progression Statutory Instrument SI No. 539 2009 was brought into effect from 1st January 2009 and under those Circuit Court rules the judge, or the county registrar at a case progression hearing, may on the application of any of the parties on notice or of it’s own motion, where it considers it appropriate and having regard to all the circumstances of the case, order that the proceedings or issue they are in be adjourned for such time, ordinarily not exceeding 28 days, as he/ she considers appropriate and invite the parties to use mediation, conciliation, arbitration or any other dispute resolution process (each of which processes is referred to in the sub-rule as an ADR process) to settle or determine the proceedings or issue.

It is quite clear therefore that the Circuit Court has gone along very much with the Commercial Court.

On the 16th November 2010 Superior Court rule order 15A rule 99 1(B) came into effect, coinciding with the publication of the Law Reform Report. The new rules of the High Court facilitate referral by the court of proceedings or issues in proceedings, to a process of mediation or conciliation and provide that the refusal or failure without good reason of a party to participate in mediation or conciliation maybe taken into account by the court when awarding costs. Mr. Justice Peter Kelly, stated that the wording of the rules for use in the Commercial Court were chosen very carefully after considerable consultation, principally with judges and practitioners in the commercial court in Belfast, London and Edinburgh.

Draft Mediation bill 2012

The Minister for Justice, Equality and Defence Mr Alan Shatter TD, published the Draft General Scheme of Mediation Bill 2012, on March 1st 2012. The Minister stated that the objective of the Bill is to  “promote mediation as a viable, effective and efficient alternative to court proceedings, thereby reducing legal costs, speeding up the resolution of disputes and relieving the stress involved in court proceedings”.

The draft Bill has incorporated many of the recommendations made by the Law Reform Commission in its 2012 Report on “Alternative Dispute Resolution – Mediation and Conciliation”.

In all there are twenty sections in the draft Bill, the key elements of which are:

  • imposition of a duty on solicitors and barristers to inform their clients, prior to the instigation of court proceedings, of the alternative means of dispute resolution by recourse to the mediation process. Where court proceedings are instigated the parties will be asked to confirm that they have been made aware of, and have carefully considered, the use of mediation.
  • where proceedings are at hearing stage, the role of the Court has been extended and the court may, if it sees fit, invite the parties to the dispute to consider the use of mediation or attend an information session on mediation as a means of dispute resolution. The Bill provides for adjournment of proceedings to enable the parties consider and/or engage with the mediation process.
  • A mediator must inform the parties to the mediation of their qualifications and experience relevant to the area of mediation being considered.
  • All communications/exchange of documentation between the parties to the mediation, including the mediator, shall be treated as strictly confidential and not divulged to any other party.
  • In the course of a mediation, the parties to the dispute may ask the mediator to propose solutions to the dispute. In this case mediation becomes conciliation and the parties have discretion over the acceptance or otherwise of the proposed solution.
  • Costs associated with the mediation must be reasonable and shared equally by the disputant parties.
  • The Bill provides for publication by the Minister of “Codes of Practice” for the proper conduct of the mediation process by suitably qualified mediators.
  • The parties involved in a mediation process shall determine (a) if and when an agreement has been reached between them and (b) whether the agreement is to be enforceable between them.
  • Where, following court intervention,the parties engage in a mediation process, the mediator shall prepare and submit a report on the outcome of the process to the court, without comment or recommendation.
  • In awarding costs in respect of proceedings, a court may, if it considers it just, have regard to (a) any unreasonable refusal of a party to consider mediation and (b) any unjustified refusal to attend an information session.
  • A mediator acting in accordance with the provisions of the Bill, shall not be liable for civil damages for any statement, decision or omission made in the process of mediation, unless such was made in bad faith with malicious purpose or in a manner exhibiting wilful or wanton disregard of human rights.

The Draft Mediation Bill has been considered in great detail by the many interested parties, such as the Mediators Institute of Ireland, and these parties have made submissions to the Joint Oireachtas Committee for Justice, Defence and Equality, in order to strengthen the proposed legislation. The committee must revert to the Minister and publication of the final Bill is expected in early 2013.

“Every conflict we face in life is rich with positive and negative potential. It can be a source of inspiration, enlightenment, learning, transformation, and growth – or rage, fear, shame, entrapment and resistance. The choice is not up to our opponents, but to us, and our willingness to face and work through them.” (Kenneth Cloke and Joan goldsmith).