What Is Mediation, And Should It Be Made Compulsory For Civil And Commercial Disputes In Bermuda?

What Is Mediation?

Mediation is now universally recognised to be an effective way of resolving a wide range of domestic and international disputes, on a consensual basis, without the need for the parties to go to a final Court or arbitration hearing.

Lord Neuberger, the President of the Supreme Court of the United Kingdom and the Judicial Committee of the Privy Council (Bermuda's final appellate court), has recently identified five potential advantages of mediation over litigation (assuming that a mediation is successful, as many mediations tend to be in practice)1:

Mediation can be quicker, cheaper, less stressful, and less time-consuming than litigation or arbitration; Mediation can be more flexible than litigation or arbitration in terms of potential outcomes; Mediation is less likely to be harmful to the long term relationship between the parties; Mediation is conducted privately, under less pressure and in less artificial circumstances than a Court hearing; and It is more likely that all parties will emerge from a mediation with the feeling that they have each achieved a satisfactory outcome. The mediation process involves an independent third party mediator, appointed by the parties, who helps both sides reach a negotiated settlement agreement (with the assistance of the parties' own lawyers and other expert advisors, as may be appropriate).

The role of the mediator is to help the parties to reach a solution to their problems, and to arrive at an outcome that both parties are happy to accept, without the ongoing costs and risks of litigation or arbitration.

Although there are a variety of mediation styles and techniques, mediators generally avoid taking sides or making judgments. They are mainly responsible for developing effective communications, and building consensus, between the parties.

The focus of a mediation meeting is to reach a common sense and commercial settlement agreement that is satisfactory to all parties involved in a case. Mediation is generally a voluntary process, since it will only result in a binding settlement agreement if all the parties agree.

If the parties are unable to reach agreement, they can still go to Court or to arbitration. Mediation is also a confidential process, where the terms of discussion are not disclosed to any party outside the mediation hearing. Details about what went on at the mediation will not be disclosed or used at a Court hearing, save in the most exceptional of circumstances (such as fraud).

Generally, both parties share the cost of mediation, subject to agreement. The costs of mediation are typically modest when compared to the costs of litigation or arbitration, if contested all the way to a final hearing or an appeal.

The Use of Mediation for the Resolution of Bermuda Disputes

Mediation is occasionally used on a voluntary basis for the resolution of certain types of civil disputes in Bermuda, although (save for the family law context) whether or not a mediation takes place depends entirely on the appetite of the parties and their lawyers, in the circumstances of any particular case.

Both the reported case law and anecdotal experience suggest, however, that there is still considerable scope for the active promotion of the increased use of mediation in a larger number and a wider range of cases. There are still many reported cases where, for one reason or another, the parties and their lawyers have either ignored or rejected the possibility of a mediation, without an objectively good reason for doing so.

Mediation of Family Law Disputes

In the family law context, mediation has effectively become quasi-mandatory in Bermuda, as a result of recent amendments to Bermuda's Children Act 1998, pursuant to the Children Amendment Act 2014, which took effect from December 2014.

Similar legislation designed to make mediation a quasi-mandatory legal requirement had previously been introduced in the UK, under the Children and Families Act 2014.

The Judicial Training Institute of Bermuda has recently offered training programmes for Bermuda judges and Bermuda lawyers in the use of mediation for the resolution of family disputes.

The Bermuda Judiciary's enthusiasm for mediation in family cases is illustrated by the fact that Mrs Justice Norma Wade- Miller, a Supreme Court judge and chair of the Family Law Reform Sub-Committee, has recently been quoted as saying that "Mediation is the centerpiece of the new Integrated Family Court".

There has also been a recent reported case in which Bermuda's Family Court was reported to have ordered the parties to submit to mediation on a quasi-mandatory basis: see Re C (Variation of Access Order) [2015] Bda LR 20.

Mediation of Commercial, Civil, Corporate and Trusts Disputes?

What, then, is the Bermuda Court's current position regarding mediation for commercial, civil, corporate, and trusts disputes, whether on a voluntary or a mandatory basis?

Unreasonable Failure to...