Are the Courts’ days numbered?

One thing that the coronavirus has brought into focus is the drawbacks of the Court system which has struggled to cope with a growing backlog of cases and cancelled hearings. Despite working hard to quickly introduce more virtual and remote hearings, many litigants face having to wait an inordinate amount of time for their cases to be heard.

The coronavirus is likely to lead to many disputes, whether it be contractual, insurance, wills and probate, professional and clinical negligence cases, workplace/employment, debt and divorce for example. One thing is for certain, the lawyers are going to be very busy for years to come as they always are in a recession!

Many people are thinking that it is better to avoid the Courts altogether and give mediation a try. We have found an increasing number of people are willing to mediate remotely using Zoom or Microsoft Teams, or by telephone, which has the added benefit of reducing travel time and venue costs. Yes it is true that parties generally have to compromise and seldom get exactly what they want through mediation, it is still better than gambling on a trial which can be very costly. Court cases are generally “winner takes all” whereas in a mediation parties can “think outside the box” and come up with imaginative solutions they would never achieve in Court. Mediation is so much more positive than long drawn out uncertain and costly litigation.

The Cabinet Office has issued guidance in relation to "acting responsibly and fairly, support the response to Covid-19 and protect jobs and the economy".  Specifically, the guidance states:-

_Responsible and fair behaviour in contracts now – in particular in dealing with potential disputes – will result in better long-term outcomes for jobs and our economy. In complex contracting arrangements, this should apply throughout the contracting chain. It will in the long term protect businesses, supply chains and opportunities in the economy. Bad behaviour will be bad for jobs and will impair our economic recovery._

Specifically, there are references to early resolution of disputes and use of mediation specifically focussed on acting in a spirit of cooperation and aiming to achieve practical, just and equitable contractual outcomes having regard to the impact on the other party.

At the same time, the former Supreme Court president Lord Neuberger has warned that a headlong rush into litigation could create uncertainty and risk. He has said that the best policy as the economy begins to reopen is to encourage parties to negotiate rather than focus on their contractual rights, which in any event are going to be uncertain.

He has championed the 'breathing space' project set up by the British Institute of International and Comparative Law, an independent charity. Sir William Blair, a former Judge of the London Commercial Court, has stressed that 'new thinking is going to be required if the law is to play its full part in getting international commerce back on its feet - within the principle of legal certainty, space need to be found for renegotiation, and if the contract is no longer viable, equitable solutions'.

In doing so it is important to look at how other legal systems deal with the same issues. This will provide the legal certainty which has underpinned international commerce, and will be needed to underpin the recovery. According to Sir David Edward, a former Judge of the European Court of Justice, 'the law cannot insist that parties’ contracts must continue as if nothing has happened, or simply declare that frustration has brought them to an end. If commercial life is to go on, a rational and equitable solution must be found.'

It is true to say that the breathing space idea was not met with total approval from litigators who were sceptical and expressed a fear that parties may take advantage of a breathing space to justify late payment.

Solicitors are choosy about who they appoint as mediators, similarly to experts. It is not just a question of price. The annual CEDR audit demonstrates that solicitors are reluctant to use someone they haven’t used before. Mediators do not necessarily need to lawyers by profession and solicitors are keen to appoint people with some knowledge of the subject matter. So for example on a property case or boundary dispute they may appoint a surveyor. In a personal injury claim there may be an advantage in having medical experience.  That said, there has historically been a reluctance on the part of personal injury lawyers to instruct a mediator as there is a preference for joint settlement meetings. This may be changing with the increasing use of mediation by NHSR in clinical negligence claims. An understanding of legal costs can be an advantage in a mediator.

Opportunities to mediate may increase in the medium term as there is talk about making mediation “opt out” rather than “opt in” but “mandatory” has always been a dirty word for mediators who pride themselves on the voluntary nature of mediation and consider that compulsion would result in reluctant parties being dragged kicking and screaming to the negotiating table with no intention of resolving the case. I have certainly witnessed a few cases where the parties seem to be going through the motions because the Court has told them to mediate.

Many contracts have dispute resolution clauses incorporated in them. Traders have to provide details of ADR providers to customers. The Courts already have powers to recommend mediation and to impose costs sanctions on those who refuse to take part or ignore an invitation to mediate. The pre action protocols recommend mediation or ADR. The question is whether the Courts’ powers are sufficient or need to be beefed up.

I am a member of the Civil Justice Council’s Judicial Liaison committee, tasked with implementing the report that was published by the ADR working Group back in 2018. Change is a long time coming in the Court system.

Many people would agree that the provision of mediation in the Court system is patchy to say the least. The main stick that judges use to beat litigants with if they refuse ADR is the risk of a costs sanction at the end of the case. This is not very effective in encouraging more use of mediation in my view.

If the report’s recommendations are implemented, there is likely to be an increase in mediation and ADR generally, and more suitably qualified mediators will be needed.

The terms of reference for the report were:

To review existing forms of encouragement for mediation (and other suitable forms of ADR) in civil cases in the Civil Procedure Rules, case law and the powers of the court.

To consider alternative approaches to encourage the use of mediation (and other suitable forms of ADR) in civil disputes, including practices in other jurisdictions.

To assess proposals for reforms to the rules or for initiatives that might be taken outside the formal rules.

To monitor and contribute to the forthcoming review of the EU Mediation Directive.

In relation to this latter point a lot of encouragement of ADR has come from the EU and it remains to be seen what will happen after Brexit to the EU Mediation Directive and ADR Regulations which have been incorporated into UK law.

This report followed Lord Briggs's final report in his review of the future of the civil courts structure, published in July 2016. Lord Briggs recommended the creation of an "Online Solutions Court" covering most claims (except personal injury) whereby when filing a claim the parties will be informed about other options and then once information has been exchanged online, a legally qualified Case Officer will try conciliation or mediation. There will be only limited legal costs recoverable, if any, and so legal representation will be the exception rather than the rule. The idea is that the Court will be easy to use and so will be designed to be "lawyerless" with simplified user friendly rules.  For other cases falling outside the new Court's jurisdiction, the recommendation was to reinstate the national mediation helpline and out of hours court based mediation service. Despite the overall objective of taking the “A” out of “ADR”, the national mediation helpline and out of hours court based service has not been introduced. What has happened is a mediation pilot which is being run in London Exeter and Manchester.

Following Lord Briggs’ report, the aim of the CJC’s review was “to maintain the search for the right relationship between civil justice and ADR” and to promote debate over possible reforms.

The report includes various recommendations aimed at improving the awareness of ADR (both in the general public and in the professions/judiciary) and the availability of ADR (both in terms of funding/logistics and regulation of the professionals involved).

However the recommendations likely to be of most interest to users of the civil justice system in the short term are those that relate to Court/Government encouragement of ADR.  In this regard:

• The report does not support blanket compulsion of ADR in the sense of requiring proof of ADR activity as an administrative precondition to any particular step in the litigation.

• It also rejects the introduction of mandatory Mediation Information and Advice Meetings(as used in the family courts) as a precondition to pursuing civil claims.

However, the working group recommended a number of steps to give more weight to the existing “nudges and encouragements” toward ADR within the court system, with the aim of “spring‐loading .. the system in favour of the use of ADR at an appropriate stage”.  In particular:

• The court machinery, rules and case law have been too generous to those who ignore ADR and should be reviewed.  In particular, the _Halsey guidelines_ should be reviewed to narrow the circumstances in which a refusal to mediate is regarded as reasonable.

• Court documents, protocols, guidance material for litigants and case management should all express a presumption that ADR should be attempted at an appropriate stage on the route through to trial.   Encouragement of  ADR should be both earlier and more stringent and there “should be a perception” that formal ADR must be attempted before a trial can be made available.

• The terms of the claim document (and possibly the defence) should include a requirement to certify attempts “to contact the other party and achieve settlement” (although we note that the latter requirement, as detailed later in the report, is limited to certifying awareness of the availability of alternative methods and that litigation should be a last resort).

• There should be further exploration of the interim report’s suggestion of allowing judges to apply sanctions for unreasonable conduct regarding ADR not only at the conclusion of the case (as currently) but at interim stages.

• However, it is still questionable whether it is appropriate that a party whose stance is in fact fully justifiable (by reference to privileged/wp evidence) should have the uphill task of later persuading a trial judge effectively to reverse an earlier finding of a different judge.

• There should be further consideration of some mechanism under which mediation could be triggered without the intervention of the Court – with the most promising model being the ‘Notice to Mediate‘ used in the British Columbia system.

None of these recommendations have been implemented yet but the CJC Judicial ADR Liaison Committee is currently considering what system to implement and HMCTS do seem interested in expanding the use of mediation. That is a sensible approach given that settlements result in costs and time savings for the Court service. Meanwhile the small claims mediation service is expanding, which is a good thing as small claims take up a disproportionate amount of the Courts’ time.

At the same time, in Scotland In October 2018, the Scottish Government agreed to support Scottish Mediation to lead an Independent Review of Mediation in the Civil Justice System in Scotland. Scottish Mediation set up an 'Expert Group' to conduct the review, led by leading mediators in Scotland and representing a wide range of interests which worked through the first half of 2019 to explore how the greater use of mediation might be encouraged in the civil justice system in Scotland.

The Expert Group published a report of its findings and recommendations on 28 June 2019. The report is aimed at improving access to justice for the public and consumer interest, the interests of the professions and providers of legal services; and the interests of the Scottish economy.

On the international stage, mediation is also growing in popularity. In the last decade we have witnessed a significant growth in international mediation. Many jurisdictions have incorporated the legal recognition of mediation and settlement agreements in their legal systems.. The Singapore Mediation Convention will also give mediation users in signatory states more confidence in mediation as a dispute resolution procedure.

The convention came into force on 12 September 2020. Crucially the EU and UK are not yet signatories, but after Brexit they may do so. The EU currently has Mediation Directive 2008/52/EC in force with mechanisms for enforcing mediation settlement agreements. It is considering whether to sign or to require Member States to sign individually. The impetus for the UK signing may increase now that it is leaving the EU, bringing with it an increased focus on protecting its position as a pre-eminent dispute resolution forum.

Traditionally, mediation has had limited scope in cross-border disputes because a mediation settlement agreement can only be enforced in the same way as any other contract. In an international context, this can be a difficult process. There has not been much of an  incentive to use mediation in international disputes as the New York Convention already provides a means of enforcing arbitration awards in many countries.

The Singapore Mediation Convention provides a process for the direct enforcement of cross-border settlement agreement between parties resulting from mediation. This allows the party seeking enforcement to apply directly to the courts of the State where the assets are located.

The Convention does not apply to all settlement agreementsas there are some exclusions such as relating to consumer transactions nor to family, inheritance or employment law. However, if it does apply then there are simplified enforcement procedures.

The Convention’s success will depend on how many states ratify it and how well it works in practice, but it could encourage parties involved in cross-border disputes to consider mediation as a cost effective way of resolving disputes and lead to an increased use of cross border mediation.

So in my view, the Courts’ days are very much numbered and under threat from mediation. Overall, the future of mediation looks bright and there will certainly be a need for more trained professional mediators. If anyone is interested in training as a civil mediation council registered mediator, please get in touch as I provide online mediator training, approved by the Civil Mediation Council.