Dispute Resolution Update: Mediation: It Takes Two…
08 November 2016
The High Court recently confirmed a party should not be forced to attend mediation. Refusing an Order requesting the Court to adjourn the proceedings and invite the parties to engage in mediation, the Court stated the defendants were entitled to have their actions vindicated in public. We examine the facts of the case and the likely impact this decision will have in future similar instances.
The Rules of the Superior Courts (the "Rules") allow a judge to adjourn proceedings and invite the disputing parties to attend mediation. This usually occurs where one party to a dispute, having had an offer of mediation refused by their opponent, applies to the Court asking the Court to invite the parties to mediation.
Should one party unreasonably refuse the invitation, the Court can take that refusal into account when awarding costs and may even penalise a successful party that has refused a Court invitation to mediate.
There have been very few of these applications under the Rules, but the most recent decision in Grant & ors v The Minister for Communications & ors confirms the High Court’s approach to these applications.
The plaintiffs, who were ship operators, accused the State defendants of wrongfully exercising their authority as public officials, as well as breaching their rights under constitutional and European law. When the action was ready to be set down for trial, the plaintiffs wrote to the defendants inviting them to agree to refer the matter to mediation. Following the defendant’s refusal, the plaintiffs made an application asking the Court to invite the parties to mediate the dispute.
The Court refused the application, reiterating that mediation is a two-way process and that one party should not be compelled to engage in mediation. The Court followed the Court of Appeal decision in Atlantic Shellfish and stated that a court should only exercise its discretion to invite parties to mediation if it considers it “appropriate” to do so “having regard to all of the circumstances of the case”.
The Court felt that the State defendants had a right to refute the allegations made against them and also that they be provided with an opportunity to have their decisions vindicated in public.
It is important to note that, unlike in the Atlantic Shellfish case, where the offer to mediate was seen by the High Court as an attempt by the plaintiff to take advantage of the Rules to secure a costs advantage over their opponents, in this instance the plaintiffs’ offer to mediate was genuine. The plaintiffs were seeking to save both costs and court time and were also conscious of the effects of the litigation on the future relationship between the parties.
However, despite this, the Court was still reluctant to force the defendants to attend mediation.
From the Grant decision, it now appears that even where a party makes a genuine offer to mediate a dispute, if the opposing party is unwilling to engage in mediation for good reason, the Court will not interfere in the litigation by forcing them to do so.
While the Rules provide for the penalising of a party who unreasonably refuses to engage in mediation, we have yet to see the Courts invoke this jurisdiction. Nor has there been any indication from the Courts as to what exactly might constitute an “unreasonable refusal”.
It is clear that, for now, mediation remains the prerogative of the litigant.
For more information, please contact a member of our Dispute Resolution team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.