Is Compulsory Mediation the Answer?
Phoenix is beginning a series of articles exploring the case for introducing mandatory mediation into the civil justice system in the United Kingdom. Contributors will include practitioners, judges, policy makers and academics from the field presenting arguments for and against more compulsory forms of mediation.
Charles is an experienced Legal 500 barrister practicing from Queen Square Chambers (Bristol) and Magdalen Chambers (Exeter).
In England and Wales, the move towards mandatory mediation has been slow, although there seems to be a trajectory.
Some commentators1 have suggested that mandatory mediation is the answer, but on a temporary basis only. There is considerable force in this argument. As mediation use increases, and it becomes more mainstream, awareness builds, and it creates its own gravity. Most litigation is driven by lawyers. Litigants look to them for guidance. Lawyers, as human beings, are inclined to follow the path they know. It is often only when you stumble across something new that you realise its utility – whether that be a new piece of IT, or a quicker journey to work.
The Civil Justice Council2 identified three challenges to the growth of ADR:
- Awareness (amongst the public, professions and the bench);
- Availability (both in terms of funding and logistics, and quality and regulation); and
- Encouragement (by Government and Courts)3.
It said progress can only be made if strategies are developed to cope with all three of these challenges. That is probably right, although once mediation has reached its critical mass, encouragement loses relevance.
As a common law system, English law requires precedent to develop. It has been said that a move to mandatory mediation would undermine that4. Of course, such a criticism is not so much an attack on mandatory mediation, as on the concept of mediation generally, and indeed ADR itself. It is a conceptual rather than a real criticism. Cases which create useful precedent are a tiny percentage. Those which do are often in reality brought and funded by an interested party (for example a union), or maybe identified as a test case with interveners joining in. In fact, precedent is better made in these cases, rather than “genuine” disputes between individuals where creation of new law is an incidental by-product. These relatively rare cases are, in any event, identified by courts and an early stage, and it would not be difficult for them to be removed from any mandatory scheme.
Another criticism made, is that an imbalance in power could lead to an unjust result. In court, the judge is there to prevent injustice. A mediator cannot step in to prevent a weaker party from making a bad decision. To a degree, this is a risk. It may, however, be a risk worth taking. An imbalance in power (often lack of funds) may lead indirectly to some injustice at trial even before the most fair-minded of judges5. In fact, mandatory mediation may result in a weaker party achieving a better (and fairer) outcome by avoiding the full cost of litigation. It may empower someone who would struggle to bring a case to trial. The risk can be mitigated by appropriate training for mediators. A mediator should not advise a party that the agreement they are about to make is a bad one, but they can keep the parties physically separate. They can remind a party who may be being bulldozed that they can leave the mediation (temporarily or permanently) at any time.
In Halsey v Milton Keynes General NHS Trust6, Dyson, LJ felt that “to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the Court…7” under article 6 of the ECHR. With the greatest of respect to the Court of Appeal, it is suggested that this view is wrong, or at least outdated. The Court of Justice of the European Union did not see article 6 as a bar to a mandatory mediation provision in Alassini v Telecom Italia8, albeit in a scheme which was free at the point of use. To suggest otherwise misunderstands a vital ingredient of mediation – namely that parties should be free to disengage and seek adjudication at any point.
It may seem counterintuitive to require parties to engage in a consensual process where one or more does not wish to engage. The law recognises that it cannot require parties to reach agreement9. Mandatory mediation does not mean that parties are required to settle. It means that the parties are required, to some degree, to engage with the process. It may seem silly to require them simply to sit staring at the wall. On the other hand, it is common for parties to make dramatic shifts in position at mediation10. This may be because they have taken control of the process from the lawyers, or because by getting the other side to the mediation they feel some sort of vindication. It may be because (perhaps with the help of the mediator) they realise that their case is not as clear cut as they first thought. Whichever way, it is not possible to work out which cases, when drawn involuntarily to mediation, are likely to settle. It is no use asking the parties. Yes, failed mediations add to the overall cost of a case, but is £2,000 “wasted” on a failed mediation significantly different to £2,000 wasted on a PI expert report which fails to show causation on a particular symptom?
Some commentators have argued that mandatory mediation is not justice. The emphasis is not on establishing what is right but rather obtaining settlement. “The outcome of mediation … is not about JUST settlement, it is JUST ABOUT SETTLEMENT”11. That is an unfair criticism. The emphasis is (or at least should be) on coercing the parties to see whether there is some common ground rather than forcing them to settle. After all, what is a successful mediation? Few would argue that a case which settled on terms which leave a party grossly unhappy, or feeling bamboozled into settlement, was successful. On the other hand, a litigant who has failed to reach any agreement (perhaps because the other side has failed to engage) at least knows that they have no choice but to invest in trial or give up. Alternatively, a litigant may know that they have under settled, yet feel pleased with the outcome because the stress of litigation has passed.
Mandatory mediation would mean more mediations. More mediations would mean more mediators. At least temporarily, this may lead to an increase in inexperienced practitioners. That, in turn, may lead to a decreased “success” rate, and an increase in the risk of error (for example accidental disclosure of confidential information). This would undermine the credibility of mediation as a dispute resolution tool. This, it is suggested, is a risk which can and should be managed. Regulation should be used sparingly, so as to avoid damaging the simplicity and flexibility of mediation. It is for those implementing a system to get this right.
Mandatory mediation is not a single concept. It takes various forms.
Increasingly parties agree, in their contract, to refer a dispute to mediation as a prerequisite to adjudication. Care must be taken to ensure that the procedure is sufficiently prescribed in the original contract12. Strictly this is not mandatory mediation. The parties consented to mediation when they entered into their initial contract – even if they did so without realising or with little choice (because they contracted on the other party’s standard terms and conditions). With the cost of litigation rising, and the general increase of awareness of mediation among commercially astute potential litigants, clauses like this should become more common.
The current position in English caselaw is that mediation should not be mandatory in civil justice. Halsey13 really opened the door to a claim by the losing party that the winning party should be deprived of its costs because it failed to agree to mediate (or attempt other ADR). The Court of Appeal accepted the Law Society’s suggested criteria for this, as including:
(a) the nature of the dispute;
(b) the merits of the case;
(c) the extent to which other settlement methods have been attempted;
(d) whether the costs of ADR would be disproportionately high;
(e) whether any delay in setting up and attending ADR would have been prejudicial; and
(f) whether ADR had a reasonable prospect of success.
The burden of proof rests on the losing party. This has been criticised – it being argued that it should really be for the party refusing to mediate to explain why. That is, perhaps, a step too far, at least for now. Some judges are still very reluctant to depart from the default cost rule at all14.
Sanctions are applied at the end of the case15. It is true that this means that the sanction will have no bearing on parties to the case being considered. However, their effect on new disputes is great. Halsey and Dunnet both precipitated significant interest in mediation. The real issue is that, to succeed, it is likely that the putative paying party will need, or at least want, to rely upon the receiving party’s conduct during mediation. This is wholly undesirable and would drive a coach and horses through the confidential and without prejudice nature of mediation. It is a significant flaw in the current state of affairs.
The Civil Justice Council recommended that the Halsey guidelines (and court rules) should be reviewed. If these suggestions are adopted, we are likely to see more pressure put on unwilling “mediatees”, but risk either destroying the without prejudice nature of mediation, or doing injustice to the willing “mediatee” because they are hamstrung by confidentiality.
Compulsion or automatic referral
England is not yet ready for compulsory mediation in substantial cases. It has been disapproved of by Dyson, LJ16, and Sir Rupert Jackson17. The Civil Justice Council does not support blanket compulsion. That is a shame.
The default position should be that parties mediate (or engage in other ADR). A party who does not do so should be required to justify that decision at an interlocutory stage18, and do so in a witness statement19. They may end up going through the motions – but commonly the parties will surprise themselves and reach settlement. Overall, the civil justice system will be better off. They themselves will benefit because they will compete with fewer other cases.
Elsewhere, we already have compulsory ADR in the employment field. Most claimants must contact ACAS for Early Conciliation before they can present an employment claim.
Pilot and smaller scale County Court schemes referring lower value claims to mediation have been largely successful.
In British Columbia, if a party wishes to “compel” another to mediate, it can serve a Notice to Mediate20. The parties are required to agree a mediator, but in default a rota mediator is appointed. It is possible to apply for an exemption to the process on prescribed grounds. If a party does not agree to attend a mediation the court has powers including adverse costs orders and a stay until mediation has taken place21. This seems eminently sensible. Where one party sees the benefit of mediation, the worst which could happen would be that comparatively modest money is spent on what turns out to be a failed adventure.
In Ontario mandatory mediation appears to have been successful. There is, apparently, a clear correlation between the experience of the mediator and the likelihood of the mediation settling. It has been said that the Ontario scheme was more successful than a scheme piloted in London because the exemptions were tighter22. In Ottawa, the parties had to demonstrate that they understood the mediation process, could explain why the case was not appropriate for mediation, and suggest an alternative, cost-effective form of dispute resolution. This seems to be a sensible way to approach the question of exemption, except that it may not be appropriate if the case is a “test case” or a clear candidate for summary judgment.
Compulsory mediation schemes in Turkey and Italy, and elsewhere, seem to have been successful and places where England should look to when developing its own strategy.
You can take a horse to water, but you cannot make it drink. To stretch the metaphor beyond its limit, once at the trough the horse may realise it is thirsty and drink. It may not drink, but at least then it knows that it is replete.
- for example, Quek, “Mandatory mediation: an Oxymoron? Explaining the feasibility of implementing a Court-Mandated Mediation Programme” 11 Cardoz J 92010) Conflict Resolution 479, referred to in “Towards Mandatory Mediation in England?” Helen Waller, Student Journal of Law.
- in their final report of November 2018
- paragraph 2.2
- For example, Michael Bartlet, Mandatory Mediation and the Rule of Law, Amicus Curiae, series 2, Vol 1, No1, 50, citing Lord Neuberger in R (on app of Unison) v Lord Chancellor  UKSC 51 , para 69
- For example, because the party has inferior expert evidence.
-  EWCA Civ 576
- Paragraph 9
- Walford v Miles  2 AC 128
- “Skilled mediators are now able to achieve results satisfactory to both parties in many cases which are quite beyond the power of lawyers and courts to achieve. This court has knowledge of cases where intense feelings have arisen, for instance in relation to clinical negligence claims. But when the parties are brought together on neutral soil with a skilled mediator to help them resolve their differences, it may very well be that the mediator is able to achieve a result by which the parties shake hands at the end and feel that they have gone away having settled the dispute on terms with which they are happy to live.”- Brooke, LJ, Dunnett v Railtrack plc  1 WLR 2434
- Genn, (2012:411) taken from Bartlet- see above
- Compare Sul America v Enesa Engenharis  EWCA Civ 638,  1 WLR 102,  1 Lloyd's Rep 671 with Emirates Trading Agency LLC v Prime Mineral Exports Private Ltd  EWHC 2104, for example.
- see Gore v Naheed  EWCA Civ 369 Patton, LJ said, “Speaking for myself, I have some difficulty in accepting that the desire of a party to have his rights determined by a court of law in preference to mediation can be said to be unreasonable conduct particularly when, as here, those rights are ultimately vindicated. But, as Briggs LJ makes clear in his judgment, a failure to engage, even if unreasonable, does not automatically result in a costs penalty. It is simply a factor to be taken into account by the judge when exercising his costs discretion”.
- although there seems no reason why they could not be applied at an interlocutory stage, for example by requiring a non-cooperative party to enter into mediation or pay a deposit into court.
- In Halsey
- In his final report.
- except in obvious cases – for example where an application has been made for summary judgment
- The Ungley order
- within certain time limits
- See Helen Waller (above)