Mediation: Refuse And Be Damned?

Introduction

Lord Woolf's Reforms to the Procedural Rules governing litigation ("the CPR"), introduced in April 1999, were designed to streamline the litigation process, reduce delay and costs and, in general, provide 'access to justice' for all. At the same time, however, the Reforms looked beyond the Court precincts to encourage parties to explore other means of settling their disputes. Commercial disputes were and are frequently subject to arbitration agreements, the law in this area having been regularised by the Arbitration Act 1996. Parties who include arbitration clauses in commercial contracts or who agree to refer disputes to arbitration continue to recognise the benefits of resolving their disputes in private and the value of a binding arbitration.

Increasingly, parties have also recognised the benefits of alternative dispute resolution whereby a dispute can be settled with the assistance of an independent third party who, while unable to impose a solution on the parties, can facilitate both parties finding a mutually acceptable solution to their dispute. As far back as 1996, Waller J said, in a practice statement, that the settlement of claims by way of ADR can:

save costs;

reduce delay;

preserve existing and ongoing commercial relationships and market reputations;

provide a much wider range of settlement solutions than those offered by the Court; and

make a substantial contribution to the more efficient use of judicial resources. Waller J's comments remain at the forefront of the judiciary's thinking today when considering ADR.

The law

Both existing practice requirements and recent case law have highlighted the role of ADR in modern litigation in the right circumstances.

The Pre-Action Protocol for defamation, for example, requires both parties to provide evidence to the Court that alternative means of resolving a dispute have been considered. The same Protocol refers to the possibility of resolving a dispute by way of determination by an independent third party or by mediation or any other form of ADR. There is a prima facie duty on both parties to consider settling their dispute without recourse to the Court and increasingly the Court may make enquiries of the parties at a later stage as to what efforts were made to settle a claim without the need to litigate.

Waller J's sentiments are reflected throughout the CPR. For example, in the Guides to the Chancery and Queen's Bench Divisions and the Commercial Court, the Rules confirm his comments and encourage both parties to consider the use of ADR. Solicitors are also required to inform their clients about the most cost-effective means of resolving a dispute, including the possibility of ADR.

ADR is a voluntary means of settling a dispute, whereas litigation is necessarily imposed upon the Defendant against its will. The general view is often that ADR requires a desire by both sides to find a mutually acceptable solution to a dispute. Where one party is reluctant to mediate, then, until recently, all hope of relying on ADR was often considered lost and a case would progress as usual to Court.

It is not uncommon, however, for media defendants, perhaps after publication of an apology (either agreed or unilaterally) to consider the residual issues of costs and damages as suitable for mediation yet for their adversary claimants to be reluctant to explore ADR, preferring to rely upon a tried and tested route through the Courts. There are, obviously, clear costs benefits in resolving a dispute at an early stage by way of ADR rather than allowing a matter to drag on through the litigation process to trial. Mediation also offers a less public forum for settlement and, while this may be seen as unattractive by reluctant parties, it is easily overcome by the fact that any mediated settlement can include appropriate confidentiality terms, thus alleviating a Claimant's desire to have his day in Court. Notwithstanding the general view that ADR requires a common desire to participate, some recent case law has shown the Court as favouring a much more 'hands-on' attitude towards the possibility of settlement outside the litigation process, whatever the views of a reluctant party.

The first section of the Allocation Questionnaire, which is automatically sent to both parties by the Court after a Defence in any action is filed and which allows parties for the first time to identify proposed witnesses, anticipate costs and suggest a forward-looking timetable for the litigation process, asks "Do you wish there to be a one-month stay to attempt to settle the claim, either by informal discussion or by Alternative Dispute Resolution?". The fact that this is the first question asked of both parties by the Court at this stage speaks for itself.

Recent case law re-affirms the Court's desire to reduce delay and minimise recall to the Courts. A series of recent cases has shown the Court's firm commitment to mediation and the requirement on both parties to explore all other avenues by which a claim, of whatever nature, could be settled without litigation.

Lord Woolf, sitting in the Court of Appeal in Frank Cowl and Others -v- Plymouth City Council1, referred to the...