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Published 29 August 2017
Where a client decides not to mediate, the solicitor must swear a statutory declaration that they advised their client to consider mediation. Where such a declaration is not filed, the Court will adjourn any proceedings issued until such time as it is provided. In an effort to alleviate the pressure on the Courts system, the Bill imposes costs sanctions on parties for failing unreasonably to engage in mediation. Such provision requiring parties to consider mediation may be useful in eliminating what may be perceived as an obstacle to mediation or negotiation in practice. Often parties do not want to propose mediation or negotiation because it may be misinterpreted as a sign of weakness. The legislative endorsement of the process may make the parties less concerned about this possibility.
Mediation is an option at any stage of the proceedings. Equally, parties may withdraw from mediation at any time. Any agreement is voluntary, both its terms and the extent to which it may be binding are up to the parties. The fees and costs of the mediation shall not be contingent on its outcome (unlike the Court process). Mediation also has the advantage of being an entirely confidential process.
In addition, not all claims are suitable for or will benefit from mediation. For times when the parties are too far apart for a mediation to have a realistic prospect of success, the Bill stipulates that cost sanctions should only be imposed where the refusal to mediate was unreasonable. The Bill also acknowledges that it will not always be unreasonable to decline to mediate. This represents a key change as regards the possible costs implications.
Agreement to Mediate
If the parties decide to mediate then the parties and the proposed mediator shall prepare and sign an agreement to mediate which appoints the mediator and sets out the agreed framework for the mediation including the manner in which the fees and costs are to be paid, the place and time at which the mediation is to be conducted, the confidential manner of mediation and the parties right to seek legal advice. It is currently standard practice for such an agreement to be put in place, but the Bill will now make it mandatory.
From the date of signing the agreement to mediate, time under the Statute of Limitations will effectively stop for bringing claims until 30 days after either a mediation settlement is signed by the parties and the mediator or the mediation is terminated, whichever occurs first. The mediator shall inform the parties in writing of the date on which the mediation ends.
The Court's Role in Mediation
Part 4 of the Bill deals with the role of the Courts in mediation. The Bill provides that a Court may, on application or of its own volition invite the parties to consider mediation. If the parties decide to engage in mediation, the court may:
Mediator's Report to Court
Section 8 of the Bill sets out and regulates the role of a mediator.
One of the most controversial aspects of the Bill centres on the obligation to furnish a report contained in Section 16(1). Where legal proceedings are in being, the Court may invite the parties concerned to engage in mediation. Where mediation is unsuccessful and the parties subsequently apply to the Court to re-enter the proceedings, the mediator shall prepare and submit to the Court a report which shall set out:
a) where a mediation did not take place, a statement of the reasons as to why it did not take place, or
b) where a mediation took place:
Section 16(2) notes that a copy of a report prepared under subsection (1) shall be given to the parties at least 7 days prior to its submission to the court except where otherwise agreed or directed by the court.
Section 16 gives rise to significant concerns regarding confidentiality and possible breaches of same which may discourage parties from engaging in open and direct communication which is a vital component in the mediation process and its effectiveness. It remains to be seen what approach the Courts and the mediator will take and how fulsome the report is expected to be.
In awarding costs, the Bill states that, a Court shall be entitled to take into account any unreasonable refusal to mediate. In practice therefore, where an invitation to mediate is received, good practice would suggest that it should not be ignored and if a decision is made to decline mediation, then detailed reasons should be expressed in writing explaining the reasons for the refusal.
Importantly, with regard to mediation clauses in contracts, which tend to be disregarded in favour of legal proceedings, the Bill aims to safeguard such provisions by allowing the other party to the contract to apply to Court to have the proceedings adjourned so that the mediation clause can take effect. This will undoubtedly lead to growth in the numbers participating in mediation.
The Bill proposes the establishment of a mediation council to oversee the development of this form of dispute resolution in Ireland and prepare codes of practice and to establish a register of mediators. However there is scope for debate as to whether there is a need to establish such a body or register. The Minister for Finance, Paschal O'Donoghue opposes the setting up of such a Council insisting that the newly established Legal Regulatory Services Authority should take up this role.
As with all legislation this Bill will have to pass through both houses of the Oireachtas and will endure lengthy debate before being published and approved.
A link to the Mediation Bill 2017 can be found here.
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