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Mediation – A New Compulsory Step in Litigation?

Mediation Not LitigationAs part of an ongoing series of articles focusing on Civil Litigation, this month we are considering the growing importance of mediation. There has been a lot of effort over the last few years to reform the civil justice system. One of the key reasons for this has been the high cost of bringing claims to court.

A recent proposal aimed at reducing legal costs was made by the Conservative Secretary to the Ministry of Justice, Jonathan Djanogly. He has suggested that mediation should be compulsory in some civil cases. The aim of the proposal would be to keep more cases out of the court system.

Mediation is the process by which two opposing parties make proposals to settle a civil case via a trained third party (a mediator). The process is often used in commercial disputes, as the parties involved prefer a more informal and private environment. There is no obligation to settle at mediation, although having everybody in the same place at the same time can allow for more efficient negotiating. It is fair to say that often mediation can be successful, but it is not suitable in every case. If the government makes mediation a compulsory step in all civil claims, then there will be a real possibility that legal costs will actually rise. Introducing a new step into the process of bringing a claim may also slow down how long it takes for claims to be resolved.

Lord Neuberger, Master of the Rolls, has criticised the proposal to enforce mediation. He argues that such a step would undermine the right of access to the Civil Courts in addition to giving more powerful litigants an unfair advantage earlier on in proceedings. Lord Justice Jackson, who prepared an extensive report on reforms to the litigation system last year,1 has put forward an alternative set of proposals. He has suggested that changes should be made to the way in which costs are paid at the end of a case. This would see more of the burden shared by Solicitors and Insurers.

It will be interesting to see what approach the government takes, but what is clear is that the current system will change soon. The writer’s suspicion is that both compulsory mediation and serious caps on recovering legal costs will be introduced. To back this up, steps are already being taken to increase the use of mediation in family matters. From April 2011 compulsory mediation will be required in all family cases. Compulsory mediation in litigation cannot be far behind.

On a positive note, the extent to which a mediation settlement can be enforced is to be extended as a result of an EU Mediation Directive passed on 21 November 2010. What this will mean is that where disputes are in other EU member states, there will be a method for any settlement to be enforced. The deadline for full implementation of this new rule is 21 May 2011, which ties in nicely with the government’s plans to increase the importance of mediation in contentious proceedings.

Whether you find yourself working in personal injury, family proceedings or general litigation, the proposed changes will affect your work. Being aware of major changes in practice demonstrates to any current or potential employer that you have a genuine interest in the work.

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