1 April 2020 by Dispute Resolution Alert

Mediation: A new rule

It is not often that one can report good news on improvements in legal procedure. Today we do so. With effect from 9 March 2020, new Rule 41A has been incorporated in the High Court Rules. This new rule requires parties to a dispute (both actions and applications) to initiate potential mediation from the outset.

The party bringing the action or application is obliged to request the other side to consider and advise whether it agrees to refer its dispute to mediation. Indeed, the parties have to go further. In response to the required notice the parties have to state the reasons why they believe a dispute cannot be mediated. Even if a dispute goes past the initial stages at court it can be referred to mediation at any stage by agreement between the parties with the encouragement, if need be, of the case management judge.

This procedure, which remains voluntary in the sense that parties aren’t required to mediate their disputes, is nevertheless a huge step forward. At the very least it will encourage parties to consider mediation, with all its advantages, right at the start of the dispute.

Litigating parties frequently complain, with absolute justification, of the costs, delays and expense of ordinary court processes. It was for this reason, and particularly to address delays, that arbitration has become a more popular form of dispute resolution. But arbitration is still expensive and relatively slow.

Mediation, on the other hand is a voluntary without prejudice process where parties, usually with the assistance of a trained independent mediator, attempt to facilitate resolution of a dispute through negotiation. The process is cheap and quick – it rarely lasts more than a day or two in total – is informal and does not bind parties if agreement is not reached.

In the experience of this firm, and we have conducted a number of mediations that have been successful, mediation is particularly apposite where parties have enduring commercial or other relationships, but have an issue which
they need to resolve.

Of course, parties who are trying to duck and dive obligations will never agree to mediation since they do not want their dispute to be resolved speedily. But for a lot of litigants this is not the case. A mediation process, if conducted professionally, may lead to the swift and inexpensive resolution of many disputes which would otherwise meander through the courts, with all attendant frustration and expense, for many years.

This is a legal reform which has definite potential benefits to parties in dispute, and we encourage people to take up the opportunity to attempt to resolve disputes by mediation where at all possible.

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