Caroline Prestonof Strategic Dispute Resolution explores the Irish response to the 2008 European Mediation Directive:
"As with other European Union countries, there is a widely held view among practitioners here that the practice of mediation is set to grow exponentially, given the clear advantages that it has for the swift and cost-effective resolution of disputes."
Directive 2008 52/EC of the European Parliament (the Mediation Directive) was implemented in Ireland in 2011. It is currently the only statutory code that governs mediation in this country and applies to cross-border disputes only. The government approved a Draft General Scheme of Mediation Bill in March 2012, but it is not as yet law.
As with other European Union countries, there is a widely held view among practitioners here that the practice of mediation is set to grow exponentially, given the clear advantages that it has for the swift and cost-effective resolution of disputes.
However, according to a study produced by Policy Department C: Citizens’ Rights and Constitutional Affairs of the European Parliament, entitled rebooting the Mediation Directive: Assessing the limited impact of its implementation and proposing measures to increase the number of mediations in the EU, it seems that the optimism prevalent both here and among our neighbours may be misguided without additional legislative and non-legislative incentives to encourage growth. The Directive has not achieved its objective, as stated in article 1 – “To facilitate access to alternative dispute resolution and to promote the amicable settlement of disputes by encouraging the use of mediation and by ensuring a balanced relationship between mediation and judicial proceedings”. According to the study, Italy is the only country to have the reported number of mediations exceeding 200,000 annually; it also found that mediation is, on average, only used in 1 per cent of cases in the EU. The joint Committee on Justice, Defence and Equality accepted this point in its report on hearings in relation to the Draft Scheme. Yet 70 per cent of mediators practising within the zone believe that they will be doing more this year than last and 82 per cent are in favour of legislative impetus. According to the Policy Department C report, Ireland probably conducts between only 500 and 2,000 mediations per annum; clearly, more is required to “reboot” the mediation regulations and to achieve the balanced relationship between mediation and judicial proceedings aspired to in the Directive.
Although the Mediation Directive refers only to cross-border disputes, recital 8 thereof provides that “nothing should prevent member states from applying its provisions also to internal mediation processes”. The Draft General Scheme has been the subject of much submission and lobbying, and thus it is not possible to accurately predict what the domestic landscape will look like when it is ultimately passed. However, the following effects can be anticipated.
First, the Act will contain a duty upon solicitors and barristers to provide information and advice on mediation. This is already a requirement in certain limited cases here, in family law matters and by virtue of the Civil Liability and Courts Act of 2004. The Draft envisages that the solicitor must also provide an estimate of a client’s legal costs in the event of court proceedings, an obligation already enshrined by virtue of section 68 of the Solicitors Act of 1994. The research conducted by the authors of the study also indicates that a duty to inform has not had a material effect on the increased use of mediation as a dispute resolution mechanism in those countries where it is already a requirement.
Second, the Act will provide for the confidentiality of mediation communications, reflecting that contained in the regulations relating to cross-border disputes. The Draft provides that mediation communications shall not be admissible as evidence in any court or other proceeding, except where confidentiality is expressly waived by all the parties. There are anticipated exclusions to this in circumstances where disclosure is necessary in order to implement or enforce a mediated agreement, where it is required by law or where a mediation communication is used to attempt to commit a crime. The confidentiality is also to be lifted from such a communication where a party to mediation is alleging negligence or misconduct on the part of a mediator. However, mediation agreements in this country already almost invariably contain absolute confidentiality clauses. It is not, therefore, anticipated that the additional statutory protection will necessarily provide any additional impetus to the growth of the practice. This is also the conclusion reached in the Policy Department’s study. There has been no major effect created by strong statutory confidentiality protection in other countries.
Third, the Draft Scheme provides that a court may, on the application of a party to civil proceedings or of its own motion, invite the parties to use mediation to settle the dispute. In such circumstances, the court proceedings shall be stayed and time stopped for the purposes of the Statute of Limitations. The practice of judges, especially in the Commercial Court, of suggesting that the parties mediate already exists, although it is not widespread. It is difficult to see, therefore, how putting the existing practice on a statutory footing will make any difference. Furthermore the Draft provides that unless ordered by the court, the parties to the mediation shall pay the mediator and share equally the fees and costs of the mediation. This is the current practice. There are no proposals for financial aid or relief, which would provide additional impetus, but only that the court may take into account any unreasonable refusal of a party to consider using mediation when awarding costs. This amounts to a stick as opposed to a carrot, and it remains questionable whether the courts will use it. To date, in the Commercial Court (where judges do sometimes suggest mediation during the course of case management) there have, as yet, been no subsequent adverse cost implications for parties who refuse to do so.
The evidence indicates that, without some form of mandatory model for mediation, the proposals contained in the Draft General Scheme of Mediation Bill 2012 would not be adequate to create a major growth in mediation practice. Many mediation practitioners in Ireland – as in other countries throughout the EU – are strongly wedded to the voluntary nature of mediation. However, perhaps we simply need to get used to the idea of something more mandatory. The example presented by Italy is persuasive. In 2011 the Italian government enacted provisions for mandatory mediation. These were abandoned as a result of a constitutional challenge in October 2012, and then remedied by the Italian government in September 2013 when it again became mandatory to mediate in cases involving tenancy land rights, partition of property, hereditary succession, leases, loans, medical and sanitary malpractice, insurance, and banking and finance issues. In the period when mediation was not mandatory (pre-2011) there were no more than 2,000 mediations per year in Italy. At the time when mediation was mandatory (March 2011–October 2012), the number of voluntary mediations climbed to almost 45,000 out of over 220,000 proceedings as a whole. When mediation ceased to be mandatory (October 2012–September 2013), the number of voluntary mediations fell to almost zero. Now that mediation is again a prerequisite to litigation in certain cases, both mandatory and voluntary mediations have been initiated at a rate of tens of thousands per month.
The system employed in Italy is a “mitigated” mandatory mediation system, or “opt out” system, and requires that in certain cases litigants must sit down with a mediator for a preliminary meeting, at no cost to them. This avoids the parties having to go through and pay for a full-blown mediation. Opponents of even the opt-out system say that it violates the voluntary nature of mediation, which is the key to its success. But this is misconceived. The obligation to attend a pre-mediation session does not offend the voluntary nature of the process. There is no obligation on the parties to continue with the process if they don’t wish to, and thus the access to justice is unfettered. In such circumstances it is hard to see how such an obligation could violate a party’s right of access under the European Convention of Human Rights, as its opponents suggest. There is no compulsion to settle. Making it a requirement that parties attend a pre-mediation session does not replace the right of access it simply provides another option.
For the same reason, granting judges the power to order mediation as a prerequisite to a case proceeding to trial has no disadvantages. This practitioner believes that, without a legislative impetus giving judges such powers and making it a prerequisite that pre-mediation meetings be held, there is unlikely to be a material change in attitude both within and outside of the legal community.
Whereas the proposed legislation approved by the government of Ireland arguably falls short of that which is necessary to effectively incentivise a growth in mediation practice, non-legislative measures should not be ignored. The chief of these should be an increase in mediation advocacy education programmes in business and law schools. Currently the Law Society in Ireland runs a module in relation to ADR, but its focus is heavily on arbitration. The approach of lawyers is key to achieving an appropriate balance between mediation and judicial proceedings. It is predominantly the lawyers who decide whether a dispute upon which they have been asked to advise is “suitable” for mediation. The legislative nudges that already exist, which provide that lawyers should advise on the alternative of mediation (in the Courts Act of 2004 and in family law cases), have done little to promote its growth. Many practising lawyers in this jurisdiction labour under some fundamental misconceptions about the process of mediation and when it should be employed. The number of mediations being conducted in July, before the courts’ two-month recess, is considerably higher than at any other time of the year; I would suggest that this is illustrative of a reluctance on the part of lawyers to use mediation when the more traditional and fee-heavy dispute resolution mechanisms are available. Furthermore, mediators are often asked to act only when the trial is imminent. Naturally this practice means that the parties are fraught and the mediation less than ideally prepared, but it also reflects a basic misunderstanding of what can be achieved by mediation when engaged in properly. There is a widespread view among legal practitioners that offering to mediate is a sign of weakness, as opposed to a sensible client-centred opportunity to provide a cost-effective and imaginative solution.
Fundamental to the resistance of lawyers to mediation is, however, a belief that they will incur the loss of the significant litigation fees of a full trial, by which time thousands of billable hours have been entered on timesheets. I don’t believe that this approach will be changed by the proposed duty on solicitors and barristers to advise on the cost implications of running a case to trial and on the availability of the mediation process. A fundamental shift is required to re-educate litigation lawyers on the premise that mediation is good for their client and, ultimately, good for them.
In light of the many societal benefits that greater use of mediation can bring, including significant time and money savings, it is submitted that both the EU Parliament and national parliaments should consider measures to provide for mandatory preliminary mediation sessions (an opt-out scheme). In addition they should legislate for a court-annexed mediation scheme to administer it. The success of the 2011 pilot family mediation programme in the District Court here provides clear evidence of how successful a court-annexed mediation scheme can be. In that instance, arising out of a collaboration between the Irish Courts Service, the Legal Aid Board and the Family Mediation Service, mediation and legal aid services were made available at the one location. In 2013 the number of applications for custody, access and guardianship in the District Court in Dublin was 3,697. Of these, 1,124 attended first-party information sessions, and 690 attended second-party information sessions. There were 906 mediated sessions, of which 408 reached final agreements. The savings to the Courts Service and to the Legal Aid Board were significant. The initiative has been put on a permanent footing and rolled out to locations outside Dublin. In the circumstances it seems extraordinary that there is nothing in the Draft General Scheme to provide for a court-annexed mediation scheme for cases other than family ones.
The proposed legislation in Ireland may provide some injection of new life and sustainability into the ADR programme, but the evidence from our own experience and that of our neighbours in Europe would suggest that it does not go nearly far enough.