The Mediation Act 2017 (“the Act”) commenced into law on 1 January 2018.
What does the Act seek to achieve?
Mediation has long since been used as a mechanism for dispute resolution within the Irish jurisdiction and the Act contains provisions for a statutory framework to promote and regulate the resolution of disputes through mediation.
The Act introduces a new obligation on solicitors, prior to the issue of proceedings, to advise their clients to consider mediation as a means of resolving their dispute and to provide their client with general information in relation to mediation services, including names of individuals who provide mediation services.
The obligation will apply to all litigation disputes, aside from a number of specific areas set out in the Act including, for example, certain employment law disputes, certain taxation matters and cases against the State concerning breach of fundamental rights.
The underlying objective of the Act is to promote mediation as a viable, effective and efficient alternative to court proceedings, thereby reducing legal costs, speeding up the resolution of disputes and reducing the stress and uncertainty which regularly accompanies court proceedings.
What is Mediation?
The Act defines mediation as “a confidential, facilitative and voluntary process in which parties to a dispute, with the assistance of a mediator, attempt to reach a mutually acceptable agreement to resolve the dispute”.
The process is entirely consensual and the Act provides that participation “shall be voluntary at all times”. Further once a party has engaged in the process, he/she may withdraw at any time. A mediator’s fee may not be contingent on the outcome of mediation.
Prior to commencement of mediation, the mediator is obliged to:
- ensure that he/she does not have an actual or potential conflict of interest;
- furnish the parties details of his/her qualifications and with a copy of any Code of Practice published and approved under the Act to which he/she subscribes.
Throughout the mediation process the mediator is obliged to:
- act with impartiality and integrity and to “treat the parties fairly”.
- complete the mediation expeditiously; and
- ensure that the parties are aware of their rights to obtain independent advice (including legal advice) prior to signing any mediation settlement.
Confidentiality is dealt with in particular by the Act, and it provides that all communications and all records and notes relating to the mediation “shall be confidential and shall not be disclosed in any proceedings before a Court or otherwise”. The foregoing does not apply to documents where the disclosure might be necessary for example in the enforcement of a mediation settlement.
The Act extends limitation periods by the period commencing on the day on which the agreement to mediate is signed (presumably meaning the date on which all parties have executed) and ending on the day which is thirty days after either a mediation settlement is executed or the mediation is terminated. The mediator is obliged to inform the parties in writing of the date on which the mediation ends.
The Act promotes the use of mediation as an alternative means of dispute resolution to court proceedings.
In all cases, prior to issue of the proceedings, a Statutory Declaration must be made by the solicitor evidencing that the solicitor has performed the obligations imposed under the Act and where such Statutory Declaration has not been completed, the Court “shall adjourn the proceedings” pending compliance. Certain legislation governing children and Judicial Separation/Divorce are excluded from this provision.
Part 4 of the Act deals with the role of the Court in mediation. Section 16 provides that a Court may, on the application of a party or on its own motion, invite the parties to consider mediation and provide the parties with information about the benefits of mediation.
Following an invitation by the Court where the parties decide to engage in mediation the Court may:
- adjourn the proceedings;
- make an Order extending the time for compliance by a party with Rules of Court or with any Order of the Court; or
- make such other Order or direction as is necessary to facilitate the effective use of Mediation.
These statutory rights are conferred without prejudice to any other discretionary power which the Court may exercise with a view to facilitating the resolution of a dispute.
Section 17 provides that where an invitation by the Court to the parties under Section 16 has occurred, the mediator must prepare and file with the Court a written report setting out why the mediation did not take place, or where the mediation took place a statement as to whether or not a mediation settlement was reached and if the mediation settlement has been reached on all or some only of the matters a statement of the terms of the mediation settlement. The mediator is obliged to furnish such a report to the parties at least seven days prior to its filing.
This is a most curious provision and conflicts with the confidential nature of mediation. Perhaps the message to be taken from this part of the Act is that the parties themselves engage in the process without intervention by the Court under Section 16.
With regard to enforcement, the Act provides that a mediation settlement “shall have effect as a contract between the parties to the settlement” save where it is expressly stated to have no legal force until incorporated into a formal agreement. This of course does no more than recognise the position of all compromises in so far as they are contractual in nature.
The Act provides that the fees and costs of the mediation shall be reasonable and proportionate to the importance and complexity of the issues at stake and to the amount of work carried out by the mediator.
In awarding costs in circumstances where the Court invited the parties to consider mediation, the Court may take into account factors including any unreasonable refusal or failure by a party to consider/attend mediation following an invitation to do so under Section 16(1).
The Act is a welcome development in the area of dispute resolution. Mediation has been successfully used for dispute resolution for many years in Ireland and has become increasingly common in recent years. The Act reinforces and supports the process. It preserves the core aspects of mediation a confidential, facilitative and voluntary process in which parties attempt to reach a mutually acceptable agreement.
Cormac has practised throughout his career in the fields of commercial law, litigation and dispute resolution. He is former chairman of the Business Law Committee of the Law Society and a former President of the Southern Law Association. Cormac is a CEDR Accredited Mediator and a member of the New York Bar Association.
Phone: +353 21 7300200
Karol-Ann is an associate solicitor with J.W. O’Donovan having joined the firm as a trainee in 2008, and qualifying in 2010. She practises in the areas of Litigation and Dispute Resolution, and Employment Law with a particular emphasis on public liability, employer’s liability and product liability claims, across a variety of industries and at all court levels.
Phone: +353 21 7300200