cONSULTATION pAPER

ALTERNATIVE DISPUTE RESOLUTION

 

 

 

 

(LRC CP 50 - 2008)

 

© Copyright

Law Reform Commission

 

FIRST PUBLISHED

July 2008

 

ISSN 1393 – 3140

 

LAW REFORM COMMISSION’S ROLE

The Law Reform Commission is an independent statutory body established by the Law Reform Commission Act 1975. The Commission’s principal role is to keep the law under review and to make proposals for reform, in particular by recommending the enactment of legislation to clarify and modernize the law. Since it was established, the Commission has published over 140 documents containing proposals for law reform and these are all available at www.lawreform.ie. Most of these proposals have led to reforming legislation.

 

The Commission’s role is carried out primarily under a Programme of Law Reform. Its Third Programme of Law Reform 2008-2014 was prepared by the Commission following broad consultation and discussion. In accordance with the 1975 Act, it was approved by the Government in December 2007 and placed before both Houses of the Oireachtas. The Commission also works on specific matters referred to it by the Attorney General under the 1975 Act. Since 2006, the Commission’s role includes two other areas of activity, Statute Law Restatement and the Legislation Directory.

 

Statute Law Restatement involves the administrative consolidation of all amendments to an Act into a single text, making legislation more accessible. Under the Statute Law (Restatement) Act 2002, where this text is certified by the Attorney General it can be relied on as evidence of the law in question. The Legislation Directory - previously called the Chronological Tables of the Statutes - is a searchable annotated guide to legislative changes. After the Commission took over responsibility for this important resource, it decided to change the name to Legislation Directory to indicate its function more clearly.


Membership

Law Reform Commission consists of a President, one full-time Commissioner and three part-time Commissioners.

 

The Commissioners at present are:

 

President:

The Hon Mrs Justice Catherine McGuinness

Former Judge of the Supreme Court

 

Full-time Commissioner:

Patricia T. Rickard-Clarke, Solicitor

 

Part-time Commissioner:

Professor Finbarr McAuley

 

Part-time Commissioner:

Marian Shanley, Solicitor

 

Part-time Commissioner:

Donal O’Donnell, Senior Counsel

 


Law Reform Research Staff

Director of Research:

Raymond Byrne BCL, LLM (NUI), Barrister-at-Law

 

Legal Researchers:

Áine Clancy BCL, LLM (NUI)

Philip Flaherty BCL, LLM (NUI), Diop sa GH (NUI)

Eleanor Leane LLB, LLM (NUI)

Gemma Ní Chaoimh BCL, LLM (NUI)

Verona Ní Dhrisceoil BCL (Dlí agus Gaeilge), LLM (NUI)

Jane O’Grady BCL, LLB (NUI ), LPC (College of Law)

Charles O’Mahony BA, LLB (NUI), LLM (Lond), LLM (NUI)

Ciara Staunton BCL, LLM (NUI), Diop sa GH (NUI)

 

Statute Law Restatement

Project Manager for Restatement:

Alma Clissmann, BA (Mod), LLB, Dip Eur Law (Bruges), Solicitor

 

Legal Researchers:

John P. Byrne BCL, LLM (NUI), Barrister-at-Law

Elizabeth Fitzgerald LLB, M.Sc. (Criminology & Criminal Justice), Barrister-at-Law

 

Legislat ion Directory

Project Manager for Legislation Directory:

Heather Mahon LLB (ling. Ger.), M.Litt., Barrister-at-Law

 

Legal Researchers:

Margaret Devaney LLB

Eóin McManus BA, LLB (NUI), LLM (Lond)


Administration Staff

Head of Administration and Development:

John Glennon

 

Higher Executive Officer:

Alan Heade

 

Executive Officers:

Simon Fallon

Emma Kenny

Darina Moran

Peter Trainor

 

Legal Information Manager:

Conor Kennedy BA, H Dip LIS

 

Cataloguer:

Eithne Boland BA (Hons), HDip Ed, HDip LIS

 

Clerical Officers:

Ann Browne

Ann Byrne

Liam Dargan

Sabrina Kelly

 

Principal legal researcher for this report

 Nicola White LLB, LLM (Dub) Attorney-at-Law (NY)


CONTACT DETAILS

Further information can be obtained from:

 

Head of Administration and Development

Law Reform Commission

35-39 Shelbourne Road

Ballsbridge

Dublin 4

 

Telephone:

+353 1 637 7600

 

Fax:

+353 1 637 7601

 

Email:

info@lawreform.ie

 

Website:

www.lawreform.ie


 

ACKNOWLEDGEMENTS

The Commission would like to thank the following people who provided valuable assistance:

 

Mr Mark Appel, Senior Vice President, International Centre for Dispute Resolution

Mr James Bridgeman, SC

Ms Claire Bruton, Barrister-at-Law

Dr Nael Bunni, Chartered Engineer, Bunni & Associates

Mr Andrew Burr, Barrister, Atkins Chambers

Ms Rosaleen Byrne, Partner, McCann FitzGerald Solicitors

Mr Oliver Connolly, Barrister-at-Law, Friary Law Chambers

Ms Karen Erwin, President, Mediators Institute of Ireland

Mr Ciaran Fahy, Vice Chair, Chartered Institute of Arbitrators.

Ms Rachel Fehily, Barrister-at-Law

Mr Jonathan FitzGerald, Barrister-at-Law, Friary Law Chambers

Mr Brian Hutchinson, Barrister-at-Law and Vice Dean School of Law UCD

Mr Joseph Kelly, Partner, A & L Goodbody Solicitors

Ms Mary Lloyd, Family Mediation Service

Mr John McBratney, SC

Judge Petria McDonnell, Judge of the Circuit Court

Mr Patrick Meghen, County Registrar, Limerick

Mr Colm O hOisin, SC and Chair Bar Council of Ireland ADR Committee

Ms Polly Phillimore, Family Mediation Service

Ms Paulyn Marrinan Quinn, SC and Ombudsman for the Defence Forces

Mr Nathan Reilly, Barrister-at-Law

 

However, full responsibility for this publication lies with the Commission.

 

 

TABLE OF CONTENTS

 

Introduction  1

A     Background to the project 1

B     The Commission’s approach to alternative dispute resolution  1

(1)   The role of the courts in encouraging parties to
agree solutions  1

(2)   Delays in the court process and the development
of ADR  2

(3)   The response to delays in the court process and related services  2

(4)   Efficiency, including cost efficiency  2

(5)   Other benefits of ADR, including flexibility  3

(6)   An integrated approach to dispute resolution  4

(7)   Individual and collective dispute resolution  4

(8)   Collective disputes and regulatory bodies,
including Ombudsmen  5

(9)   The main focus of the Consultation Paper 6

C     Outline of Consultation Paper Chapters  6

CHAPTER 1                 Alternative Dispute Resolution in CONTEXT: ORIGINS & DEVELOPMENT OF ADR  9

A     Introduction  9

B     Resolution of Disputes  9

(1)   The Nature of Disputes  9

(2)   Dispute Resolution & Civil Justice  12

(3)   Appropriate Dispute Resolution  15

C     The Development of ADR: An Overview  20

(1)   ADR in Classical Times  20

(2)   ADR in Traditional Societies  21

(3)   Development of Civil & Commercial ADR  24

D    Conclusion  34

CHAPTER 2                 ADR processes & Terminology  37

A     Introduction  37

B     ADR Terminology: An Overview  37

C     Definition of ADR  39

D    Classification of the ADR Spectrum   40

E     Preventive ADR Processes  41

(1)   Negotiation  42

(2)   Partnering  44

(3)   ADR Clauses  45

F     Facilitative ADR Processes  46

(1)   Mediation  46

G    Advisory ADR Processes  48

(1)   Conciliation  49

(2)   Collaborative Lawyering  49

H     Determinative ADR Processes  50

(1)   Arbitration  50

(2)   Hybrid Models including combinations of
mediation and arbitration: Med-Arb and
Arb-Med  52

(3)   Adjudication  53

(4)   Expert Determination  54

I       Collective ADR  55

(1)   Ombudsman Schemes  56

J     Judicial ADR Processes. 67

(1)   Small Claims Court 68

(2)   Early Neutral Evaluation  68

(3)   Mini Trial 69

(4)   Court Settlement Process  70

K     Conclusion  71

CHAPTER 3                 GENERAL PRINCIPLES and OBJECTIVES
of ADR  73

A     Introduction  73

B     Voluntary Nature of ADR Processes  74

(1)   An Overview  74

(2)   Forms of Referral to Mediation or Conciliation  75

(3)   Party-Driven Mediation  76

(4)   Court-Annexed ADR Schemes  80

(5)   Voluntary Schemes v Compulsory Schemes
& the Impact of Costs Sanctions: England &
Wales  92

(6)   Conclusion  100

C     Confidentiality  101

(1)   Protection of Confidentiality: An Overview  101

(2)   Agreement Guaranteeing Confidentiality  102

(3)   ‘Without Prejudice’ Communications  102

(4)   Distinct Mediation Privilege  108

(5)   Conclusion  111

D    Self-Determination  112

(1)   An Overview of Self Determination  113

(2)   Informed Consent 114

(3)   Conclusion  115

E     Efficiency  116

(1)   Cost Efficiency  117

(2)   Time Efficiency  120

(3)   Conclusion  122

F     Flexibility  122

(1)   Procedural Flexibility  123

(2)   Flexibility of Outcome  123

G    Neutrality & Impartiality  124

H     Quality and Transparency of Procedure  125

I       European Directive and Principles of Mediation  126

(1)   Voluntary Nature of Mediation  127

(2)   Confidentiality  128

(3)   Self Determination  129

(4)   Efficiency  130

(5)   Neutrality & Impartiality of Mediators  130

(6)   Flexibility  131

(7)   Quality & Transparency of Process  131

(8)   Enforceability of Mediated Agreements  131

(9)   Limitation Periods  132

J     Conclusion  133

CHAPTER 4                 Employment Disputes & Industrial
Relations: The ROle of adr  135

A     Introduction  135

B     Employment Disputes: An Overview  135

C     Labour Relations Commission  138

(1)   Conciliation Service  139

(2)   Advisory Services Division  143

(3)   Rights Commissioner Services  145

(4)   Workplace Mediation Service  148

D    The Equality Tribunal 150

(1)   Mediation at the Equality Tribunal: An
Overview  150

(2)   Flexibility of Agreements Reached at
Mediation  152

(3)   Conclusion  154

E     Labour Court 154

(1)   Main Functions of the Labour Court 154

F     Employment Appeals Tribunal 157

G    Other Developments in Ireland  160

(1)   Partnership  160

(2)   National Employment Rights Authority  161

H     Conclusion  161

CHAPTER 5                 Family Disputes & ADR  163

A     Introduction  163

B     Information Meetings  163

(1)   The Commission Report on Family Courts
1996  163

(2)   2007 Courts Service Report on Family Law
Reporting Pilot Project 165

(3)   Models in Other Jurisdictions  165

C     Parenting Plans  167

D    Counselling  172

(1)   New Zealand  172

E     Mediation  174

(1)   Family Mediation: An Overview  174

(2)   Legislative Development of Family Mediation
in Ireland  177

(3)   Family Mediation Service  178

(4)   Issues in Family Mediation  179

(5)   Mediation Schemes in Other Jurisdictions  185

F     Collaborative Lawyering  202

(1)   The Collaborative Process  204

(2)   Participation Agreement 205

(3)   Developments in Other Jurisdictions  207

(4)   Conclusion  211

G    Case Conferencing in Family Law Disputes  211

H     Government Initiatives in England and Wales  212

(1)   Family Mediation Helpline  213

(2)   Mediation Week  213

(3)   Public Awareness Campaign  214

I       Mediating Family Probate Disputes  214

J     Conclusion  215

CHAPTER 6                 Medical Issues & ADR  217

A     Introduction  217

B     Civil Claims: Medical Negligence  217

(1)   Role for ADR in Resolution of Medical
Negligence Disputes: Alternative Dispute
Remedies  218

(2)   Flexibility & Creativity of Mediation Agreements
in Medical Disputes  221

(3)   The Power of an Apology  221

C     Professional Conduct 224

(1)   Medical Practitioners Act 2007  224

D    Developments in England & Wales  225

(1)   National Health Service (NHS) 226

(2)   Pre-Action Protocol for the Resolution of
Clinical Disputes  227

E     Developments in the United States  228

(1)   Medical Mediation Panels: Wisconsin  228

(2)   Pre-litigation Screening Panel: Maine  229

F     Summary  230

CHAPTER 7                 Commerical Disputes & ADR  231

A     Introduction  231

B     Commercial Dispute Resolution: An Overview  231

C     Commercial ADR in Ireland  235

(1)   ADR Clauses in Commercial Contracts  235

(2)   Commercial Court & ADR  239

(3)   ADR Clauses in Irish Government Public
Works Contracts  245

(4)   Shareholder Disputes & ADR  249

(5)   Commercial ADR Schemes & Associations  251

D    International Commercial Dispute Resolution in
Ireland  254

(1)   International Centre for Dispute Resolution  255

(2)   International Chamber of Commerce  255

(3)   The Permanent Court of Arbitration  256

(4)   Court of Arbitration for Sport 257

E     Conclusion  257

CHAPTER 8                 consumer disputes & adr  259

A     Introduction  259

B     Consumer Disputes: An Overview  259

C     ADR Mechanisms for Resolving Domestic
Consumer Disputes  262

(1)   Direct Negotiation & Internal Complaints
Handling  262

D    Cross Border Consumer Disputes  271

(1)   European Consumer Centre Dublin  271

(2)   FIN-NET and the Financial Services
Ombudsman  275

(3)   European Small Claims Procedure  277

E     Online Dispute Resolution of Consumer Disputes  278

(1)   Electronic Consumer Dispute Resolution  278

(2)   The Internet Ombudsman  280

F     Small Claims Court 282

G    Redress Mechanisms in Other Jurisdictions  284

(1)   Sweden  284

(2)   Denmark  285

(3)   Norway  285

(4)   Queensland: Commercial & Consumer
Tribunal 287

CHAPTER 9                 Property Disputes & ADR  289

A     Introduction  289

B     Neighbour Disputes & ADR  289

(1)   Nature of Boundary Disputes  289

(2)   Appropriateness of ADR for Resolution of
Boundary Disputes  291

(3)   Role for Mediation in Neighbour Disputes  292

(4)   Conclusion  296

C     Landlord & Tenant Disputes  297

(1)   Private Residential Tenancies Board (PRTB) 297

(2)   Mediation and Adjudication at the PTRB  298

(3)   Tenancy Tribunals of the PRTB  299

(4)   Conclusion  300

D    Planning Application Disputes & ADR  300

(1)   Planning Applications & ADR: An Overview  300

(2)   Role for ADR in the Planning System:
International Experiences  301

(3)   Summary  303

CHAPTER 10               TRAINING AND ACCREDITATION OF
MEDIATORS  305

A     Introduction  305

B     Accreditation & Regulation of Mediators: An
Overview  305

(1)   Prescribed Bodies under the Civil Liability
and Courts Act 2004  308

(2)   Mediators Institute of Ireland  308

(3)   Family Mediators  310

C     Training & Accreditation Systems in Other
Jurisdictions  310

(1)   The Netherlands  311

(2)   Australia  312

(3)   Civil Mediation Council of England & Wales  315

(4)   Family Mediation Council in England and
Wales  315

(5)   Canada: Chartered Mediators  316

(6)   Global Quality Mark: International Mediation
Institute  318

(7)   United States  320

(8)   Austria  320

D    Education on ADR  321

E     Conclusion  322

CHAPTER 11               Role of Court & adr  325

A     Introduction  325

B     Role of the Court in Encouraging ADR  325

(1)   Comparative Review  326

(2)   Conclusion  331

C     Costs Sanctions  332

(1)   Costs Sanctions: Good Faith Requirement
& Genuine Effort to Compromise  333

(2)   Costs Sanctions in England & Wales -
“Unreasonable Refusal to Mediate” 336

(3)   Conclusion  345

D    Mediator Reporting to the Court 346

E     Recovery of Mediation Costs  347

CHAPTER 12               summary of PROViSIONAL
RECOMMENDATIONS  351

 

 

TABLE OF LEGISLATION

Arbitration (International Commerical) Act 1998

1998, No. 14

Irl

Arbitration Act 1954

1954, No. 26

Irl

Arbitration Act 1980

1980, No. 7

Irl

Central Bank and Financial Services Authority of Ireland Act 2004

2004, No. 21

Irl

Child Family and Community Service Act 1996

1996, c.46

Can

Children Act 1997

1997, No. 40

Irl

Civil Liability and Courts Act 2004

2004, No. 31

Irl

Civil Procedure Act 1997

1997, c.12

Eng

Civil Procedure Act 2005 (NSW)

2005, No. 28

Aus

Compensation Act 2006

2006, c.29

Eng

Consumer Protection Act 2007

2007, No. 19

Irl

Defence Act 1954

1954, No. 18

Irl

Disability Act 2005

2005, No. 14

Irl

Divorce Act 1985

1985, c.3

Can

Education for Persons with Special Educational Needs Act 2004

2004, No. 30

Irl

Employment Equality Act 1998

1998, No. 21

Irl

Equal Status Act 2000

2000, No. 8

Irl

Equality Act 2004

2004, No. 24

Irl

Family Law (Divorce) Act 1996

1996, No. 33

Irl

Family Law Act 1975

1975, No. 53

Aus

Family Law Act 1996

1996, c.27

Eng

Family Law Amendment (Shared Responsibility) Act 2006

2006, No. 46

Aus

Family Law Reform Act 1995

1995, No. 167

Aus

Family Proceedings Act 1980

1980, No. 94

NZ

Family Support Agency Act 2001

2001, No. 54

Irl

Garda Síochána Act 2005

2005, No. 20

Irl

Guardianship of Infants Act 1964

1964, No. 7

Irl

Health (Repayment Scheme) Act 2006

2006, No. 17

Irl

Health and Social Care Professionals Act 2005

2005, No. 27

Irl

Industrial Relations Act 1990

1990, No. 19

Irl

Interstate Commercial Act 1887

 

US

Judicial Separation and Family Law Reform Act 1989

1989, No. 6

Irl

Medical Practitioners Act 2007

2007, No. 25

Irl

National Economic and Social Development Office Act 2006

2006, No. 21

Irl

National Minimum Wage Act 2000

2000, No. 5

Irl

Newlands Act 1913

 

US

Ombudsman (Defence Forces) Act 2004

2004, No. 36

Irl

Ombudsman Act 1980

1980, No. 26

Irl

Ombudsman for Children Act 2002

2002, No. 22

Irl

Organisation of Working Time Act 1997

1997, No. 20

Irl

Pensions (Amendment) Act 2002

2002, No. 18

Irl

Pensions Act 1990

1990, No. 25

Irl

Protection of Employees (Fixed-Term Work) Act 2003

2003, No. 29

Irl

Protection of Employees (Part-Time Work) Act 2001

2001, No. 45

Irl

Redundancy Payments Act 1967

1967, No. 21

Irl

Residential Tenancies Act 2004

2004, No. 27

Irl

Succession Act 1965

1965, No. 27

Irl

Unfair Dismissals Act 1977

1977, No. 10

Irl

 

 

 

 

TABLE OF CASES

Aiton Australia Pty Ltd v Transfield Pty Ltd

(1999) 153 FLR 236

Aus

Alan Wibberley Building Ltd v Insley

[1998] 2 All ER 82

Eng

Al-Khatib v Masry

[2004] EWCA Civ 1353

Eng

Barker v Johnson

[1999] EWCA (Civ)

Eng

Brown v Rice & Patel 

[2007] EWHC 625

Eng

Burchell v Marshall

[1854] 58 U.S. 344

USA

Burne v 'A'

[2006] EWCA Civ 24

Eng

Cable and Wireless plc v IBM plc

[2002] EWHC 2059 (Comm)

Eng

Carleton Seventh Earl of Malmesbury v Strutt & Parker

[2008] EWHC 424

Eng

Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd

[1993] AC 334

Eng

Chantrey Vellacott v Convergence Group plc

[2007] All ER 492

Eng

Charlton v Kenny

2006, No. 4266P

Irl

Cook v Carroll

[1945] IR 515

Irl

Cowl v Plymouth City Council

 [2001] EWCA Civ 1935

Eng

Cutts v Head

[1984] Ch 290

Eng

Devlin v The National Maternity Hospital

[2007] IESC 50

Irl

Dickinson v Brown

[2001] NSWSC 714

Aus

Dunnett v Railtrack plc

[2002] 2 All ER 850

Eng

Egan v Motor Services (Bath) Ltd

[2007] EWCA Civ 1002

Eng

Forster v Friedland

[1992] CAT 1052

Eng

Fyffes v DCC

[2007] IESC 36

Irl

Greencore Group plc v Murphy

[1995] 3 IR 520

Irl

Hall v Pertemps Group Ltd

[2005] EWHC 3110 (Ch)

Eng

Haycocks v Neville

[2007] EWCA (Civ)

Eng

Hurst v Leeming

[2001] EWCA Ch 1051

Eng

IDA Ltd v University of Southampton

[2006] EWCA Civ. 145

Eng

Instance v Denny Bros Printing

[2001] EWCA Civ 939

Eng

Keenan v Shield Insurance Co Ltd

[1988] IR 89

Irl

Lobster Group Ltd v Heidelberg Graphic Equipment Ltd

[2008] EWHC 413 (TCC)

Eng

Morrow v Chinadotcom Corp

[2001] NSWSC 209

Aus

Munt v Beasley

[2006] EWCA 370

Eng

National Westminster Bank v Feeney

[2006] EWHC 90066

Eng

O'Connor v Lenihan

2001, No. 13001P

Irl

O'Neill v Ryanair (No 3)

[1992] 1 IR 166

Irl

Reed Executive plc v Reed Business Information Ltd

[2004] EWCA Civ 159

Eng

Remuneration Planning Corp Pty Ltd v Fitton

[2001] NSWSC 598

Aus

Royal Bank of Soctland v Secretary of State of Defence

[2003] EWHC 1479 Ch

Eng

Ryan v Connolly

[2001] 2 IRLM 174

Irl

Scammell v Dicker

[2005] EWCA 405 (Civ)

Eng

Scott v Avery

(1856) 5 HLC 811

Aus

Shirayama Shokusan v Danovo Ltd

[2003] EWHC Ch 3006

Eng

The Health Board v BC and the Labour Court

[1994] ELR 27

Irl

Thompson v Commissioner of Police of the Metropolis

[1998] QB 498

Eng

Unilever plc v Proctor & Gamble Co

[2001] 1 All ER 783

Eng

Venture Investment Placement Ltd v Hall

[2005] EWHC 1227

Eng

Walker v Wilshire

[1889] 23 QBD 335

Eng

Waterhouse v Perkins

[2001] NSWSC 13

Aus

 

 

 

 

Introduction

A                  Background to the project

1.                 This Consultation Paper forms part of the Commission’s Third Programme of Law Reform 2008-2014,[1] under which the Commission is committed to examining, and exploring reform options for, the main processes of alternative dispute resolution (ADR)[2] and associated key principles.  As the Consultation Paper indicates, the main ADR processes are mediation and conciliation.  A number of new processes have also emerged in specific areas, such as collaborative lawyering in the family law setting.  Because this is a fast moving and emerging area, in respect of which there is no clear framework of relevant principles, the Consultation Paper also places significant emphasis on exploring the key principles of ADR, including its voluntary nature, the need for confidentiality, its efficiency and the transparency and quality of the process.

B                  The Commission’s approach to alternative dispute resolution

2.                 In preparing this Consultation Paper, the Commission’s approach is based on the key objective that civil disputes are resolved in a way that meets the needs of the parties and conforms to fundamental principles of justice.  This objective involves several related issues, which the Commission sets out here in order to describe its overall approach to ADR.

(1)                 The role of the courts in encouraging parties to agree solutions

3.                 It is clear that, from one perspective, the word “alternative” refers to looking outside the courtroom setting to resolve some disputes.  In this respect, the Commission fully supports the long-standing approach of the legal profession and of the courts that, where it is appropriate, parties involved in civil disputes should be encouraged to explore whether their dispute can be resolved by agreement, whether directly or with the help of a third party mediator or conciliator, rather than by proceeding to a formal “winner v loser” decision by a court.  This happens every day in the courts, in family litigation, in large and small commercial claims and in boundary and other property disputes between neighbours.  In that respect there are strong reasons to support and encourage parties to reach a solution through agreement, especially in disputes where emotional issues combine with legal issues, provided that this alternative process meets fundamental principles of justice.

(2)                 Delays in the court process and the development of ADR

4.                 In addition to the recognition by the legal profession and the courts that some disputes would be better resolved by agreement rather than court decision, the emergence in Ireland (and internationally) of alternative dispute resolution processes has also been associated with real problems of delays in the court system.  An undoubted advantage of mediation and conciliation is the ability to get speedy access to a process that may produce a satisfactory outcome for the parties in a short space of time.  The Commission accepts that any long delays in the court process involve clear barriers to justice: justice delayed is, indeed, justice denied. While some ADR processes may have emerged in response to delays in the court process, the Commission also considers it is important to note that the court process has not stood still or ignored the problem of delay.

(3)                The response to delays in the court process and related services

5.                 The court process in Ireland has responded to the problem of delay - and the connected development of ADR processes - with important initiatives. For example, the Commercial Court list in the High Court, which was established in 2004 to deal with large commercial disputes,[3] uses active judicial case management to improve the efficiency of the litigation process itself and also encourages the use of mediation and conciliation. Similarly, the Smalls Claims Court in the District Court is a mediation process for certain consumer disputes (which can be filed on-line and is available for a small handling fee), under which the first step is to seek informal resolution of the dispute using a document-only approach.[4]  In a wider setting, the Family Mediation Service, which forms part of the statutory Family Support Agency,[5] provides an important alternative resolution facility in the context of family conflicts.

(4)                Efficiency, including cost efficiency

6.                 The research presented in this Consultation Paper on the efficiency of ADR processes (some based on Irish experience) indicates that mediation and conciliation processes often provide a speedy resolution to a specific dispute.  That research also indicates that there is – to put it simply – no such thing as a free conflict resolution process, alternative or otherwise.  Where the resolution process is provided through, for example, the courts or the Family Mediation Service, most or all of the financial cost is carried by the State.  Where the resolution process involves private mediation, the cost is often shared by the parties involved.  The Commission accepts, of course, that the additional financial costs involved in an individual case that goes through an unsuccessful mediation and must then be resolved in litigation has to be balanced against the possible savings where a complex case is successfully mediated.  The Commission nonetheless considers it is important not to regard ADR as a patently cheaper alternative to litigation costs; in some instances, it may be, but where a mediation is not successful it obviously involves additional expense.  On the whole, careful and appropriate use of ADR processes is likely to reduce the overall financial costs of resolving disputes.

7.                 In addition, the other aspect of efficiency – timeliness – may be of great value to the parties.  The Commission is also conscious of other values associated with ADR processes, including party autonomy and respect for confidentiality, which are discussed in detail in the Consultation Paper.  The point of noting the narrow issue of financial cost is primarily to indicate that the research referred to in this Consultation Paper strongly supports the view that ADR assists timely resolution of disputes, but is less clear that direct financial costs savings may arise for the parties.[6]

(5)                Other benefits of ADR, including flexibility

8.                 The Commission appreciates that ADR processes also bring additional benefits that are not available through the litigation process.  ADR processes may, for example, lead to a meeting between parties where an apology is offered.[7]  They can also facilitate an aggrieved party to participate in the creation of new arrangements or procedures to prevent a recurrence of the incident in dispute.  This underlines a key element of ADR, that it has the potential to enhance the empowerment of those involved in its processes.  A memorial to victims of a perceived wrong can also emerge from a mediated agreement.  The flexibility offered by ADR processes is an important aspect of a civil justice system in its widest sense.

(6)                An integrated approach to dispute resolution

9.                 In making these general points, the Commission wishes to make clear that the word “alternative” in “alternative dispute resolution” should not be seen as preventing the court process from continuing to play a positive role in resolving disputes by agreement. This can be through the long-established practice of intervening at a critical moment in litigation to suggest resolution by agreement or though the structured innovations of, for example, the Commercial Court or the Small Claims Court.  In that respect, as the detailed discussion in the Consultation Paper points out, while mediation and conciliation should be clearly delineated as quite different from litigation as such, they can also be appropriately linked to litigation.  The Commission agrees that an integrated civil justice process should include a combination of ADR processes, such as mediation and conciliation, and the court-based litigation process.  Each process plays its appropriate role in meeting the needs of the parties involved and fundamental principles of justice.

(7)                 Individual and collective dispute resolution

10.               The discussion of dispute resolution in the preceding paragraphs largely envisages individual disputes, such as a boundary dispute between neighbours or a family law dispute.  In preparing this Consultation Paper, and in particular in determining the scope of the analysis, the Commission was acutely aware that disputes do not always involve two parties only.  The Commission had previously examined multi-party litigation, such as the Army deafness claims of the 1990s,[8] and was therefore conscious that legal processes, such as litigation, must resolve collective disputes as well as individual disputes.  The Commission discusses in the Consultation Paper the successful resolution through mediation of the English Group Litigation concerning organ retention by Alder Hey Hospital, Liverpool.[9] 

11.               In this respect, the Consultation Paper includes a discussion and analysis of the many different forms in which dispute resolution takes place in a collective setting as well as the individual setting.  For example, the long-established mediation and conciliation services of the Labour Relations Commission and the Labour Court[10] almost invariably involve the resolution of industrial relations disputes directly affecting a collective group of employees and, sometimes indirectly, the general public.

(8)                Collective disputes and regulatory bodies, including Ombudsmen

12.               Quite often, the distinction between individual and collective disputes is blurred and the solutions found are not ordinarily described as alternative dispute resolution.  For example, the Commission has recently completed an analysis of multi-unit apartment complexes and made proposals for reform.[11]  In apartment complexes, the individual disputes between unit owners, developers and property managing agents over, for example, the level of property management fees could, at one level, be dealt with through litigation or mediation.  Because of the scale and diversity of the problems, other solutions may also be required.  In this, respect, the National Consumer Agency, which is primarily a regulatory body, played a type of dispute resolution role by facilitating discussion between relevant representative bodies through a Consumers Forum on Apartment Complexes. This Forum produced template forms of contracts to be used by unit owners and property managing agents that have the potential to prevent future disputes in this area.[12]

13.               The intervention of the National Consumer Agency in this way is comparable to how an Ombudsman can exercise his or her powers to ensure appropriate resolution of disputes.  It has often happened that an Ombudsman may receive a series of individual complaints about a particular problem and that these complaints are investigated collectively in order to prevent future recurrences.[13] 

14.               The Commission notes that, similarly, a professional body with regulatory or disciplinary functions, such as the Medical Council,[14] may be required to oversee the individual conduct of its profession against certain criteria in order to prevent poor practices that could, in turn, lead to disputes with clients.  The regulatory body may also be required, in some instances, to engage in ADR processes concerning poor professional conduct.[15] 

 

(9)                The main focus of the Consultation Paper

15.               The Commission notes, therefore, that ADR, in the sense just discussed, can be said to encompass a very wide area of law and legal processes.  In this respect, the Commission considered that, to provide as full an analysis as possible of ADR, it was necessary to provide an overview of the application of ADR in these different settings.  In some places, the Consultation Paper provides a general overview of ADR processes in a specific setting by way of describing their long-standing use – this is the case in the discussion of employment disputes and ADR.[16]  In that area of its use, the Commission does not make any specific suggestions for reform, for the simple reason that those engaged in using ADR in that setting – notably the Labour Relations Commission – are fully conscious of the need to develop and refine their ADR processes. Similarly, while the Commission refers in the Consultation Paper to the use of arbitration as an alternative to litigation, it is clear that the future development of this long-established area of dispute resolution will be debated in the Oireachtas in the immediate future[17] and that it would therefore be inappropriate to make reform proposals on arbitration in the Consultation Paper.

16.               The Commission’s main focus in the Consultation Paper can, therefore, be divided into three areas in respect of which it makes provisional recommendations and, where relevant, invites views and submissions on ADR.  First, the Commission examines the terminology associated with ADR, in particular the need for a consistent definition of mediation and conciliation, and the underlying general principles concerning ADR processes.  The purpose of this is to seek to achieve consistency in the use of terminology surrounding ADR and the key underlying principles.  The second area of focus is on the application of ADR in specific areas, including family law disputes, commercial disputes and property disputes.  The purpose here is to address more specific matters in these settings which the Commission considers may be in need of further clarification or development.  The third area concerns the training and regulation of ADR professionals.  The Commission regards this as a vital aspect of ensuring the quality of justice likely to be achieved through ADR.

C                  Outline of Consultation Paper Chapters

17.               Having described its general approach to alternative dispute resolution, the Commission turns to provide a brief outline of each Chapter in the Consultation Paper.

18.               In Chapter 1, the Commission presents a general overview of ADR. The Commission examines the literature on the nature of disputes and discusses the appropriateness of ADR in resolving disputes. The Commission provisionally recommends that the key principles underlying ADR, in particular mediation and conciliation, should be set out in statutory form.

19.               In Chapter 2, the Commission examines ADR processes and terminology.  The Commission provides an overview of the ADR spectrum which is made up by a body of ADR processes, including preventive (such as partnering), facilitative (mediation), advisory (conciliation) and determinative (expert determination).  The Commission explains why it is necessary to ensure that the more commonly used ADR terms, in particular mediation and conciliation, are clearly defined.  

20.               In Chapter 3, the Commission examines several of the main objectives and principles of ADR in particular in connection with mediation and conciliation. These include: the voluntary nature of ADR, the principle of confidentiality, principles of self-determination and party empowerment, the objective of ensuring efficiency, flexibility, neutrality and impartiality of the mediator or facilitator and quality of process to consumers. The Commission also summarises the objectives and principles in the 2008 EC Directive on Certain Aspects of Mediation in Civil and Commercial Matters.

21.               In Chapter 4, the Commission outlines the use of ADR in the employment law setting, notably through the Labour Relations Commission and the Labour Court.  As already noted, the Commission does not make any recommendations in this area, and the discussion is for the purposes of indicating the suitability of ADR in a specific context.

22.               In Chapter 5, the Commission examines the role of ADR in resolving family law disputes, which the Commission previously addressed in its 1996 Report on Family Courts (LRC 52 – 1996). This includes a discussion of the need for information meetings for separating or divorcing couples. The Commission also discusses the recent emergence of collaborative lawyering in the family law setting. The Commission also discusses the appropriateness of mediation for resolving family probate disputes.

23.               In Chapter 6, the Commission examines how ADR could assist in the resolution of medical disputes. Among the matters explored is the potential of ADR in providing alternative non-monetary redress, including an apology, in medical negligence claims.

24.               In Chapter 7, the Commission discusses ADR in the context of commercial disputes.  The Commission examines in particular the role of the Commercial Court in encouraging the use of mediation and explores whether the innovations it has developed could be applied to a wider commercial setting.

25.               In Chapter 8, the Commission examines the development of ADR in resolving consumer disputes. The Commission examines, for example, whether the Small Claims Court procedure could be expanded to resolve more consumer disputes.

26.               In Chapter 9, the Commission explores the potential role for ADR in the resolution of specific types of property disputes, in particular between neighbours.  The Commission considers whether ADR has any role to play in the resolution of planning application disputes.

27.               In Chapter 10, the Commission addresses the accreditation and regulation of mediators and the various non-statutory and statutory schemes for assuring the quality of mediators.

28.               In Chapter 11, the Commission examines the role of the Court in the development of ADR. The Commission explores the issue of costs sanctions and mediation and the precise manner in which mediators report back to the Courts. The Commission also considers whether mediation costs should be recoverable as legal costs.

29.               Chapter 12 contains the provisional recommendations made by the Commission in the Consultation Paper.

30.               This Consultation Paper is intended to form the basis of discussion and therefore all the recommendations made are provisional in nature. The Commission will make its final recommendations on ADR following further consideration of the issues and consultation with interested parties. Submissions on the provisional recommendations included in this Consultation Paper are welcome. To enable the Commission to proceed with the preparation of its Final Report, those who wish to do so are requested to make their submissions in writing by post to the Commission or by email to info@lawreform.ie by 31 October 2008.

 

1         

CHAPTER 1            Alternative Dispute Resolution in CONTEXT: ORIGINS & DEVELOPMENT OF ADR

A                  Introduction

1.01             In this chapter the Commission presents an overview of alternative dispute resolution (ADR). In Part B the Commission examines the nature of disputes and discusses the appropriateness of ADR in resolving disputes. In Part C the Commission summarises the development of ADR.

B                  Resolution of Disputes

(1)                The Nature of Disputes

1.02             The majority of people in Ireland are likely to become involved in a civil dispute at least once during their lifetime. Disputes are an inevitable element of human interaction and society needs to develop efficient and innovative methods of dealing with them.

1.03             A dispute is a product of unresolved conflict. Conflict can simply be viewed as “the result of the differences which make individuals unique and the different expectations individuals bring to life.”[18] While conflict is inevitable, disputes need not be. Miller and Sarat note that:

“Disputes are not discrete events like births or deaths; they are more like such constructs as illnesses and friendships, composed in part of the perceptions and understandings of those who participate in and observe them. Disputes are drawn from a vast sea of events, encounters, collisions, rivalries, disappointments, discomforts, and injuries.  The span and composition of that sea depend on the broad contours of social life …The disputes that arrive at courts can be seen as the survivors of a long and exhausting process.”[19]

 

(i)                 Development of a Dispute

1.04             Disputes often begin as grievances. “A grievance is an individual’s belief that he or she is entitled to a resource which someone else may grant or deny.”[20] For example, if a consumer purchases a product which they believe is defective, they may respond to such a belief in various ways. They may, for example, choose to ‘lump it’ and not return to the shop to complain so as to avoid potential conflict. They may redefine the problem and redirect blame elsewhere, for example to a family member for damaging the product. They may register a claim to communicate their sense of entitlement to the most proximate source of redress, in this instance, the shop assistant, the party perceived to be responsible.[21]

1.05             For something to be called a dispute, it must have moved past the solitary awareness of one person, the consumer, to a joint recognition with at least one more person, such as the shop assistant. Both parties need not agree on the nature of the dispute, its origin, or its substance, but they must agree that there is a dispute. If only one person sees a problem, it is not yet a dispute.[22] If one party accepts the entitlement of the other, that the consumer should be refunded, there is no dispute. It is only when there is partial or total rejection of the other party’s claim, for example, if the shop assistant rejects the belief that product was defective when it was purchased, that a dispute is born.[23]

1.06             It is important to distinguish disputes from differences. A dispute may be viewed as “a class or kind of conflict which manifests itself in distinct justiciable issues.”[24] A “justiciable problem” is defined as “a matter experienced by a respondent which raised legal issues, whether or not it was recognised by the respondent as being ‘legal’ and whether or not any action taken by the respondent to deal with it involved the use of any part of the civil justice system.”[25] Justiciable problems are, for the most part, those that people face in their every day lives, such as child support, consumer, education, employment, health, and welfare benefits.

(ii)               The Dispute Iceberg

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The dynamics of a dispute are often compared to an iceberg.[26] The iceberg model below serves to illustrate that only a fraction of the issues in a dispute are immediately accessible.[27] The submerged part of the iceberg represents the personal interests of the party, the fundamental underlying factors contributing to any given conflict, which do not always surface during formal rights-based processes such as litigation or arbitration.[28]

1.08             Interest-based dispute resolution processes expand the discussion beyond the parties’ legal rights to look at these underlying interests; they address parties’ emotions, and seek creative solutions to the resolution of the dispute. The focus of these processes is on clarifying the parties’ real motivations or underlying interests in the dispute with the aim of reaching a mutually acceptable compromise which meets the interests of both parties.

1.09             Preventive, facilitative and advisory dispute resolution processes explore below the surface of the iceberg and can be described as interest-based resolutions. Determinative processes such as arbitration can be described as rights-based processes which focus on the positions and issues of the parties illustrated at the tip of the iceberg. These processes tend to narrow issues, streamline legal arguments, and predict judicial outcomes or render decisions based on assessments of fact and law.[29]

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Moving From a Distressed to an Effective Dispute Resolution System.[30]

1.10             A simple example can illustrate the idea of the dispute iceberg. Two neighbours are in dispute over a tree. Each neighbour takes the position that the tree is on their land. This represents the tip of the iceberg and the main issue. No compromise is possible, since the tree cannot be sawn in half. It turns out, however, that the interest of one neighbour is in using the fruit of the tree and the interest of the other is in having the shade. Without exploring the underlying expectations and interests of the parties, no compromise would be possible. Characteristic of almost every conflict is that the party standpoint or the claim (the self-chosen solution to the conflict) is not considered acceptable by the other. However, one or more interests are often behind each standpoint and, once they have become known, can form the key to a possibly effective solution.[31]

(2)                Dispute Resolution & Civil Justice

1.11             The process of resolving a dispute has also been represented in the shape of a pyramid, which moves from the most common response at the base of the pyramid to the least common response at its apex. As the pyramid[32] below illustrates the most common response to disputes that arise is for a disputant to take no action at all. Reasons for this may include that the issue is small (‘more trouble than its worth’) or that the disputant does not feel empowered to pursue a course of action. In a larger number of matters disputants will attempt informal negotiation. Indeed, many disputes are heard by school principals and shop keepers – i.e. in the forum that are part of the social setting within which the dispute arose. Such forums process a tremendous number of disputes.[33] Fewer still disputants will seek legal advice. This may be because of the cost and time involved in consulting with a solicitor. ADR processes occupy the second tier of the pyramid. Court based-litigation occupies the apex. In other words, ADR processes, and to an even greater extent, the courts will resolve a small percentage of disputes and probably the more complex ones with more significant financial, personal or social consequences.

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1.12             In promoting access to justice, a modern civil justice system should offer a variety of approaches and options to dispute resolution. Citizens should be empowered to find a satisfactory solution to their problem which includes the option of a court-based litigation but as part of a wider ‘menu of choices’.

1.13             As one commentator noted:

“We are living in a time of social and legal evolution and it appears as if a single civil adversary court style process will not be adequate to satisfy all of the desiderata of a good justice system. With specialisation in some areas…and varying claimant preferences in others… it certainly appears that a modern civil justice system ought to permit some menu of choices for particular kinds of processes.”[34]

1.14             The concept of such a ‘menu of choices’ emphasises the importance of taking into account the preferences of those in dispute and increasing avenues to access to justice. It also reflects the American concept of ‘fitting the forum to the fuss.’[35] This involves allocating civil justice problems to the most appropriate process, depending on what the parties involved wish to achieve.

1.15             In this respect, “access to justice” encompasses access to a range of processes.[36] Justice may sometimes require a decision from a High Court judge who has heard and considered evidence and legal arguments from both sides after an adversarial hearing. In another case, justice might mean an apology and change of administrative process in response to a particular problem. It is clear that in that sense there are circumstances in which ADR can provide resolutions which a court cannot.[37]

Case Study: Alder Hey Children’s Hospital

An example from England is the huge controversy and individual grievances of over 1,000 people, which arose from the discovery that Alder Hey Children’s Hospital in Liverpool had, over a period of decades, retained organs of children who had died there. This had occurring without obtaining any consent to retention from the parents. From a legal perspective, each non-consensual retention involved a justiciable assault. To deal with the mass nature of the claims (over 1,000), the claimants were organised as a group litigation. This claim had the potential to take up enormous court time. In addition, however, the emotional element of the claim was, arguably, not suitable for litigation. The claimants and defendants agreed to mediation through the Centre for Effective Dispute Resolution (CEDR). The settlement included financial compensation but it was accepted that the ability to discuss non-financial remedies ensured a successful conclusion. The families involved produced a ‘wish list’ and this resulted in the provision of a memorial plaque at the hospital, letters of apology, a press conference and contribution to a charity of the claimants’ choice. These remedies were essential to the successful conclusion of the case and the need of the participants to achieve what they felt to be a just resolution.

1.16             The Alder Hey example provides another reason why ADR can be suitable in some cases. Mass litigation involving over 1,000 claimants is likely to take a long time to resolve and the Court should be free to deal with claims that will not overburden its available resources.[38]

 

(3)                Appropriate Dispute Resolution

1.17             There is increasing recognition that while many disputes can be resolved, there is no single formula to decide which resolution process is suitable for or appropriate to a conflict situation. “There are many variations in relation to disputes: the range of subject matters is very wide; within any category, a multitude of issues can arise; various factors can influence parties who disagree; and there are some conflicts which are not readily amenable to dispute resolution processes.”[39] Therefore, one of the more challenging aspects of alternative dispute resolution is to determine which process is most appropriate for a particular dispute. 

1.18             The potential for dealing constructively with conflicts often depends on the type of conflict and its stage of development. Glasl has identified nine stages of conflict development.[40] 

1.19             Using this analysis and depending on which level the dispute is at, a specific process is appropriate for its resolution. The earlier a dispute resolution mechanism is introduced in a dispute, the more effective it is likely to be in resolving that dispute. The longer a dispute continues, the more parties tend to become entrenched in their positions. In addition, both the financial and emotional costs continue to escalate while party control over the outcome decreases.

 

 

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1.20             When deciding which dispute resolution process to use, there are two key questions which must also be addressed.

(a)                Is the dispute suitable for ADR?

1.21             The Commission’s clear view is that not all cases are suitable for resolution by ADR, just as the court based adversarial process is not suitable for all cases. The decision to use ADR should be made on the basis of a range of factors including how best to serve the specific interests of the parties and to ensure that justice is accessible, efficient, and effective. 

1.22             In 1999, the Lord Chancellor’s Department in its Alternative Dispute Resolution - A Discussion Paper[41] set out a number of situations in which certain forms of ADR could be considered appropriate for the resolution of a dispute. These included:

·           Mediation or conciliation may be helpful where parties wish to preserve an existing relationship;

·           Parties involved in a sensitive family or commercial dispute may prefer to use a form of ADR to keep sensitive information private;

·           Arbitration may be suitable in cases where there is no relationship to preserve, and a rapid decision is needed;

·           Trade association arbitration schemes, regulators and ombudsmen may provide a cheaper alternative for an individual seeking redress against a company or large organisation, but they may be limited in the redress they can provide;

·           Early neutral evaluation might be applicable in cases where there is a dispute over a point of law, or where one party appears to have an unrealistic view of their chances of success at trial;

·           Mediation or determination by an expert might be best where there is a technical dispute with a great deal of factual evidence;

·           Mediation has achieved settlement in many apparently intractable multi-party cases; and

·           Any form of ADR will be worth considering where the cost of court proceedings is likely to equal or exceed the amount of money at issue.[42]

1.23             However, ADR is not a panacea for all disputes, it has its limitations and it is not always appropriate. In some cases power imbalances may exist which put the parties on an unequal footing, allowing one party to place undue pressure on the other. The result may be that one party may impose their solution on the other side. This could arise from the relative economic positions of the parties or from the nature of the personal or business relationship between them.[43] In such cases ADR may not be appropriate. 

1.24             It has also been suggested that “cases based on allegations of fraudulent conduct or illegal behaviour are not conducive to mediation because the polarised positions that characterise these disputes inhibit discussion. Moreover, they often place the mediator in an impossible ethical position.”[44]

1.25             In other cases there may be uncertainties in the law which is important to clarify, either because there is a lot at stake in a particular case, or because its outcome could affect a number of other cases.[45] Sometimes legal precedents need to be relied on, or to be established for future cases. There are cases in which public interest dictates that a public hearing should take place and a public decision be made.

1.26             It is important to note, therefore, that the courts will always remain central and indispensible to our civil justice system for a number of reasons. Firstly, while the courts should be viewed as the ultimate port of call to resolve a dispute, they must always be available should other ADR processes fail. The Commission notes in this respect the constitutional right of  access to the courts under Article 40.3 of the Constitution.[46] Thus, other forms of dispute resolution are often seen to be conducted ‘in the shadow of the court’. Furthermore, there will be cases where fundamental rights, such as those enshrined in the Constitution, will require judicial protection. Finally, courts can also be seen to perform an important function in preserving peace and stability in society as a whole.

1.27             While the courts will always retain a central place in the civil justice system, it is increasingly recognised throughout the world that in many instances there may be alternative and perhaps better ways of resolving civil disputes. Other less formal means of dispute resolution may be quicker, cheaper and better suited to the needs of the parties involved. “Where there exists an appropriate alternative dispute resolution mechanism which is capable of resolving a dispute more economically and efficiently than court proceedings, then the parties should be encouraged not to commence or pursue proceedings in court until after they have made use of that mechanism."[47] Once it is determined that the dispute is suitable for ADR, the next step is to consider the goals of the parties involved.

(b)               What are the goals of the parties?

1.28             One of the key questions to be asked when selecting a dispute resolution process is what process can best satisfy the interests and goals of the party to the dispute.[48] This outcome-oriented approach asks what should happen as a result of the choice of the particular dispute resolution process.[49]

1.29             The criteria which might influence the parties’ choice of process could include the following:

·           the need or desire for confidentiality or privacy,

·           whether a precedent is required,

·           where a reputation or good name is at risk,

·           the costs involved,

·           the time the process might take,

·           the importance of preserving relationships,

·           the desire for non-legal solutions,

·           the desire for an opinion or evaluation by a third party,

·           the desire to have their ‘day in court’,

·           the complexity of the issue,

·           the need for a final and binding determination, and

·           the number of parties involved.[50]

1.30             To take a hypothetical case where Mary is going through a separation with John.[51] She brings her problem to her solicitor and asks for advice on how to proceed. Her choice of procedure will partly depend on the goals that she wants to achieve. Does she want to preserve a good relationship with John? Does she want John to participate in raising their children or, on the contrary, does she want to prevent him from seeing them? How important is it for her to maximise her monetary income from the separation? Does she want to come to a flexible agreement with John in relation to maintenance and the family home that meets both their needs? Does she want to resolve matters as quickly as possible?

1.31             Without knowing what Mary really wants, it is impossible to make an informed decision about the preferable process. If Mary wishes to preserve and even enhance her relationship with John, mediation or collaborative lawyering may be the best options. On the other end of the spectrum, litigation often threatens to destroy relationships. However, a future amicable relationship with John may not be what Mary wants. On the contrary, she may prefer her children to have as little contact as possible with John. In such a case, she should probably go to court and request it to grant very limited visitation rights to John. Depending on the goals of a party to a dispute, the most appropriate dispute resolution process can be determined. [52]

1.32             The role of the legal profession should not be overlooked in relation to assessing the appropriateness of ADR. Many disputants may not be aware of the full spectrum of dispute resolution processes which are available to them and, when assessing a client case, solicitors should also assess whether ADR is appropriate. As noted by the Former US Chief Justice Warren Burger:

“The obligation of the legal profession is to serve as the healers of human conflicts. To fulfil this traditional obligation of our profession means that we should provide the mechanisms that can produce an acceptable result in the shortest possible time with the least possible expense and with a minimum of stress on the participants. That is what a system of justice is all about.”[53]

C                  The Development of ADR: An Overview

1.33             The concept of ADR is not a new phenomenon. For centuries, societies have been developing informal and non-adversarial processes for resolving disputes. In fact, archaeologists have discovered evidence of the use of ADR processes in the ancient civilizations of Egypt, Mesopotamia, and Assyria.[54] Furthermore, it can be argued that many of the modern methods of ADR are not modern alternatives, but merely a return to earlier ways of dealing with such disputes in traditional societies. The court system itself was once an alternative dispute resolution process, in the sense that it superseded older forms of dispute resolution, including trial by battle and trial by ordeal. This section will look at some of the more relevant periods in the development of ADR.

(1)                ADR in Classical Times

1.34             One of the earliest recorded mediations occurred more than 4,000 years ago in the ancient society of Mesopotamia when a Sumerian ruler helped avert a war and developed an agreement in a dispute over land.[55] Further evidence reveals that the process of conciliation among disputants was very important in Mesopotamian society.[56] During the First Century BC a merchant organisation advocated that commercial disputes be resolved outside of the court process through a confrontation between the creditor and debtor in the presence of a third party referee. The role of the referee was to help facilitate conciliation. In this way, the referee would suggest alternative settlements, if the options put forward by the parties themselves were rejected. If the dispute was not resolved according to this manner, the dispute could be brought before the court.

1.35             The development of ADR in the Western World can be traced to the ancient Greeks. As Athenian courts became overcrowded, the city-state introduced the position of a public arbitrator around 400 B.C.[57] The arbitral procedures were structured and formal. The arbitrator for a given case was selected by lottery. His first duty was to attempt to resolve the matter amicably.  If he did not succeed, he would call witnesses and require the submission of evidence in writing. This can be described as the modern day process of med-arb.[58] The parties often engaged in elaborate schemes to postpone rulings or challenge the arbitrator’s decision. An appeal would be brought before the College of Arbitrators, who would refer the matter to the traditional courts.[59]

1.36             The Classical Greek epic poem The Iliad, contains several examples of mediation and arbitration in Greek culture. One such example concerns the negotiation of an agreement between a murderer and the victim’s family. Traditional law required that the accused make an offer to the victim’s family which was laid out in public view for all to assess. Some negotiation regarding the offer occurred. However, the final assessment of the offer was made by a respected elder whose decision would be accepted by all.[60] This example incorporates the modern processes of restorative justice and arbitration.

(2)                ADR in Traditional Societies

1.37             Arbitration was an important feature of Irish Brehon Law. A 'brithem'[61] who had trained in a law-school but had not been appointed by the king as the official judge for the area earned his living by arbitrating disputes between parties who had agreed to be bound by the decision.[62] They simply judged the amount of fines due from those guilty, and left it to extended families, patrons or chiefs to enforce payment. If a brithem left a case undecided he would have to pay a fine of 8 ounces of silver. Founded in the maxim 'to every judge his error', he would have to pay a fine for an erroneous judgment.[63]

1.38             There are many other examples of ADR processes which have developed in traditional societies as mechanisms for resolving disputes. The Bushmen of Kalahari, a traditional people in Namibia and Botswana, have sophisticated systems of resolving disputes that avoid physical conflict and the courts. 

“When a serious problem comes up everyone sits down – all the men, all the women – and they talk, and they talk and they talk.  Each person has a chance to have his or her say. It may take two or three days.  This open and inclusive process continues until the dispute is literally talked out.”[64] 

This process incorporates negotiation, mediation, and consensus building and bears some resemblance to the parliamentary filibuster.

1.39             Hawaiian islanders of Polynesian ancestry use a form of mediation called ‘ho’oponopono’ for resolving disputes. This process involves a family coming together to discuss interpersonal problems under the guidance of a respected leader.[65]  Similarly, the Abkhazian people of the Caucasus Mountains of Georgia have long practised mediation by elders to resolve disputes within their group and among tribes in surrounding areas.[66]

1.40             In Nigeria, the Yoruba live in modern cities but continue to revert to traditional methods of resolving disputes. Courts are seen as the last resort as it is generally considered a mark of shame on the disputants when a matter ends up in the courts. They are viewed as ‘bad people’ who should favour reconciliation.[67] Family disputes are generally brought before the ‘baale’, who is an elderly head of the district. After both disputants state their case, the elders ask questions and then try to work towards a compromise in which both sides accept some of the blame. The elders have a variety of techniques for reaching an agreement: subtle blackmail, precedent, proverbs, and even magic. “The only real power behind the elders’ decisions is cultural: they can threaten social excommunication or use emotional blackmail.”[68]

1.41             India also has a long tradition of using ADR processes. The most popular method of dispute resolution, ‘panchayat’, began 2,500 years ago and is widely used for resolution of both commercial and non-commercial disputes.

1.42             Similarly, since the Western Zhou Dynasty in China 2,000 years ago the post of mediator has been included in all governmental administration.  Today in China it is estimated that there are 950,000 mediation committees with 6 million mediators. Article 111 of the Constitution of the People's Republic of China states "People's Mediation Committees (PMC) are a working committee under grassroots autonomous organizations - Residents Committee, Villagers Committee - whose mission is to mediate civil disputes." Today, these Committees handle between 10 and 20 million cases per year, ranging from family disputes to minor property disputes. Chinese citizens are not forced to use the PMCs and can bypass them for the courts. But since the committees are tasked with settling matters in no longer than a month, PMCs can be an efficient way to administer justice.  Judgments also can also be appealed to the courts.[69]

1.43             It is well-documented that mediation has a long and varied history in all the major cultures of the world.  Both the Koran and the Bible[70] provide references to the resolution of disputes through arbitration or mediation.


(3)                Development of Civil & Commercial ADR

(a)                Ireland

1.44             The first Arbitration Act was the “Act for Determining Differences by Arbitration, 1698”.[71] The 1698 Act provided, inter alia, that “It shall and may be lawful for all merchants and traders and others desiring to end any controversy, suit or quarrel ... by a personal action or suit in equity, by arbitration whereby they oblige themselves to submit to the award or umpirage of any person or persons ... so agreed." One of Ireland's first recorded arbitral institutions was the Ouzel Galley Society. Its name derived from an Irish merchant ship.  In the autumn of 1695 the Ouzel Galley sailed out of Ringsend in Dublin under the command of Capt Eoghan Massey of Waterford. Her destination, it was supposed at the time, was the great Ottoman port of Smyrna in what is now Turkey where the vessel's owners - the Dublin shipping company of Ferris, Twigg & Cash - intended her to engage in a trading mission before returning to Dublin the following year. The Ouzel, however, did not return as scheduled; nor was she seen the year after that. When a third year passed without any sign of her or her crew, it was generally assumed by the people of Dublin that she had been lost at sea.[72]

1.45             In 1698 a panel comprising the city's most distinguished merchants was established to settle the question of insurance. The panel's ruling was that the ship had been lost and that its owners and insurers should receive their due compensation. The galley's complement of 37 crew and 3 officers were declared dead and the insurance was paid out.[73]

1.46             Two years later, however, in the autumn of 1700, the Ouzel made her unexpected reappearance, sailing up the River Liffey. The ownership of the Ouzel's cargo became a matter of dispute. Litigation commenced later that year but was arduously slow. Eventually in 1705 the merchants of Dublin decided to form an arbitration court to hear the dispute and the panel of merchants which had arbitrated in the case in 1698 was formally established as a permanent arbitration body to deal with similar shipping disputes that might arise. In contrast with the court proceedings the arbitration reached a relatively speedy conclusion.[74] According to records, "It was resolved that the entire of the pirates' booty would form a fund for the alleviation of poverty among the merchants of Dublin.” [75] The Ouzel Galley Arbitration led to the formation of the Ouzel Galley Society. 

1.47             The Ouzel Galley Society thrived until the 1820's. Between 1799 and 1869 for instance it is known to have made 318 awards - the majority of these being made before 1824. The members were generally drawn from among the city's most eminent politicians and businessmen - among them Arthur Guinness and John Jameson. For much of the 18th Century the society met in public houses. In 1783 the society was partially subsumed by the newly formed Dublin Chamber of Commerce. From that year on it declined, in parallel to the decline in the city's fortunes, and it was eventually wound up in 1888.[76]

1.48             Further developments in the field of arbitration in Ireland include the enactment of the Arbitration Act 1954 (as amended by the Arbitration Act 1980) which continues to govern domestic arbitrations and the Arbitration (International Commercial) Act 1998 which governs international arbitrations. The 1998 Act adopts the UNCITRAL Model Law on International Commercial Arbitration with a few minor amendments. In 1998, the Bar Council opened the Dublin International Arbitration Centre.[77] In May 2001, the International Centre for Dispute Resolution, a separate division of the American Arbitration Association, the world’s largest provider of commercial conflict management and dispute resolution services, opened its European headquarters in Dublin.[78] 

1.49             Provision for mediation has been made in a number of recent Acts and statutory instruments, including:

·           Judicial Separation and Family Law Reform Act 1989;

·           Family Law (Divorce) Act 1996;

·           Employment Equality Act 1998;

·           Family Support Agency Act 2001;

·           Civil Liability and Courts Act 2004;

·           Residential Tenancies Act 2004;

·           Rules of the Superior Courts (Commercial Proceedings) 2004;

·           Equality Act 2004;

·           Disability Act 2005;

·           Rules of the Superior Courts (Competition Proceedings) 2005; and

·           Medical Practitioners Act 2007.

(b)               United States

1.50             In the United States, Chambers of Commerce created arbitral tribunals in New York in 1768, in New Haven in 1794, and in Philadelphia in 1801. These early panels were used primarily to settle disputes in the clothing, printing, and merchant seaman industries. Arbitration received the full endorsement of the Supreme Court in 1854, when the court specifically upheld the right of an arbitrator to issue binding judgments in Burchell v Marshall.[79] Writing for the court, Grier J stated that “Arbitrators are judges chosen by the parties to decide the matters submitted to them, finally and without appeal.  As a mode of settling disputes, it should receive every encouragement from courts of equity.”[80]

1.51             The federal government has promoted commercial arbitration since as early as 1887, when it passed the Interstate Commercial Act 1887. The Act set up a mechanism for the voluntary submission of labour disputes to arbitration by the railroad companies and their employees. In 1898, Congress followed initiatives that began a few years earlier in Massachusetts and New York and authorised mediation for collective bargaining disputes. The Newlands Act 1913 and later legislation reflected the belief that stable industrial peace could be achieved through the settlement of collective bargaining disputes; settlement in turn could be advanced through conciliation, mediation, and voluntary arbitration. Special mediation agencies, such as the Board of Mediation and Conciliation for Railway Labor 1913[81]  and the Federal Mediation and Conciliation Service 1947 were formed and funded to carry out the mediation of collective bargaining disputes. 

1.52             Beginning in the late 1960’s, American society witnessed the start of a significant movement in ADR, in a climate of criticism of the adversarial nature of litigation, and, perhaps, loss of faith in traditional adjudication and the competence and professionalism of lawyers.[82] It is, however, the Pound Conference held in 1976, which is recognised as being the birthplace of the modern ADR movement.

1.53             The Pound Conference full title was the ‘National Conference on the Causes of Popular Dissatisfaction with the Administration of Justice.’ The Pound Conference picked up on the dissatisfaction with the adversarial system.[83] According to Subrin,

“There was an unmistakeable tone at the Conference that the underlying ideology of liberality of pleading, wide-open discovery and attorney latitude was no longer feasible. The alleged litigation explosion would have to be controlled; the few bad lawyers could not be trusted to control themselves.”[84]

1.54             Professor Frank Sander’s speech entitled ‘Varieties of Dispute Processing’, urged American lawyers and judges to re-imagine the civil courts as a collection of dispute resolution procedures tailored to fit the variety of disputes that parties bring to the justice system.[85] The goal, Sander argued, should be to ‘let the forum fit the fuss’. Sander criticised lawyers for tending  “to assume that the courts are the natural and obvious dispute resolvers, when, in point of fact there is a rich variety of different processes…that may provide far more effective conflict resolution.”[86] He advocated “a flexible and diverse panoply of dispute resolution processes, with particular types of cases being assigned to different processes.”[87] Sander then outlined the spectrum of disputing methods he regarded as apt, these included;

·           adjudication,

·           arbitration,

·           problem-solving efforts by a government ombudsman,

·           mediation or conciliation,

·           negotiation,

·           avoidance of the dispute.[88]

1.55             He stated that we should “reserve the courts for those activities for which they are best suited and to avoid swamping and paralysing them with cases that do not require their unique capabilities.”[89] He envisioned that “not simply a court house, but a Dispute Resolution Center, where the grievant would first be channelled through a screening clerk who would then direct him to the process (or sequence of processes) most appropriate to his type of case.”[90] The room directory in the lobby of such a Center might look as follows:

Screening Clerk

Room 1

Mediation

Room 2

Arbitration

Room 3

Fact Finding

Room 4

Malpractice Screening Panel

Room 5

Superior Court

Room 6

Ombudsman

Room 7

1.56             A screening unit at the centre would “diagnose” disputes, then using specific referral criteria, refer the disputants to the appropriate dispute resolution process, the “door”, for handling the dispute.[91]  Sander’s idea was a catalyst for what later became known as the “Multi-Door Courthouse”. Multi-door courthouses were established, initially on a pilot basis, in Tulsa (Oklahoma); Houston (Texas); and in the Superior Court of the District of Columbia. From these experiments, the idea spread to many courts throughout the world.[92]  “In a relatively short amount of time, the use of ADR processes in American courts has increased to the extent that this once unusual process is now commonplace …and hailed as the most important tool available to the courts.”[93]

(c)                England & Wales

1.57             Sander’s concerns for the future of the civil justice system were echoed in the Woolf Reports on the civil justice system of the 1990’s when the system in England and Wales was viewed as

 “… too expensive in that the costs often exceed the value of the claim; too slow in bringing cases to a conclusion and too unequal: there is a lack of equality between the powerful, wealthy litigant and the under resourced litigant. It is too uncertain: the difficulty of forecasting what litigation will cost and how long it will last induces the fear of the unknown; and it is incomprehensible to many litigants.”[94]

1.58             The then Lord Chancellor appointed Lord Woolf in 1994 to review the rules of civil procedure with a view to improving access to justice and reducing the cost and time of litigation. The aims of the review were “to improve access to justice and reduce the cost of litigation; to reduce the complexity of the rules and modernise terminology; to remove unnecessary distinctions of practice and procedure.”[95] Perceived problems within the existing civil justice system, summed up by Lord Woolf in his review in England and Wales as “the key problems facing civil justice today...cost, delay and complexity.”[96]

1.59             The Woolf Reports led to the enactment of the UK Civil Procedure Act 1997 and the Civil Procedure Rules 1998 (CPR). The new CPR Rules apply both to proceedings in the High Court and the County Court. The stated objective of the procedural code is to enable the court to deal with cases justly.[97] Dealing with a case justly includes, so far as practicable:

·           Ensuring that the parties are on an equal footing;

·           Saving expense;

·           Dealing with the case in ways which are proportionate;

·           Ensuring that the case is dealt with expeditiously and fairly; and

·           Allotting it to an appropriate share of the court’s resources.[98]

1.60             The CPR vests in the court the responsibility of active case management by encouraging the parties to co-operate and to use ADR.[99] Under the CPR a court may either at the request of the parties or of its own initiative stay proceedings while the parties try to settle the case by ADR or other means.

1.61             Since the introduction of the CPR, ADR has significantly developed in England and Wales and the judiciary has also strongly encouraged the use of ADR.  The judgments of the Court of Appeal in Cowl v Plymouth City Council[100] and Dunnett v Railtrack plc[101] both indicated that unreasonable failure to use ADR may be subject to cost sanctions.[102] Indeed, the CPR have also introduced the possibility for cost sanctions if a party does not comply with the court’s directions regarding ADR.[103]

1.62             The English judge, Lightman J who is a strong supporter of incorporating mediation into the justice system, summarised the main developments in relation to ADR since the introduction of the CPR Rules as follows:

(1) The abandonment of the notion that mediation is appropriate in only a limited category of cases. It is now recognised that there is no civil case in which mediation cannot have a part to play in resolving some (if not all of) the issues involved;

(2) Practitioners generally no longer perceive mediation as a threat to their livelihoods, but rather a satisfying and fulfilling livelihood of its own;

(3) Practitioners recognise that a failure on their part without the express and informed instructions of their clients to make an effort to resolve disputes by mediation exposes them to the risk of a claim in negligence;

(4) The Government itself adopts a policy of willingness to proceed to mediation in disputes to which it is a party;[104]

(5) Judges at all stages in legal proceedings are urging parties to proceed to mediation if a practical method of achieving a settlement and imposing sanctions when there is an unreasonable refusal to give mediation a chance; and

(6) Mediation is now a respectable legal study and research at institutes of learning.[105]

(d)               European Developments

(i)                 Council of Europe

1.63             In 1998 the Committee of Ministers of the Council of Europe adopted a Recommendation on Family Mediation in Europe.[106] This Recommendation focused on the use of mediation in resolving family disputes. It sets out principles on the organisation of mediation services, the status of mediated agreements, the relationships between mediation and proceedings before the courts and other competent authorities, the promotion of, and access to mediation and, the use of mediation in international matters. In addition, it calls for the government of all Member States to introduce or promote family mediation and to take or reinforce measures necessary for this purpose, and to promote family mediation as an appropriate means of resolving family disputes.

(ii)               European Commission
(I)                 Green Paper on Alternative Dispute Resolutions in Civil and Commercial Law 2002 [107]

1.64             As a follow-up to the conclusions of the 1999 Tampere European Council, the Council of Justice and Home Affairs asked the European Commission to present a Green Paper on alternative dispute resolution in civil and commercial law other than arbitration. Priority was to be given to examining the possibility of laying down basic principles, either in general or in specific areas, which would provide the necessary guarantees to ensure that out-of-court settlements offer the same guarantee of certainty as court settlements.

1.65             In 2002 the European Commission published a Green Paper on Alternative Dispute Resolutions in Civil and Commercial Law. It deals with the promotion on an EU wide basis of ADR as an alternative to litigation primarily due to the ever increasing number of international disputes but also with the aim of promoting a framework to ensure that disputes can be dealt with in an efficient and cost effective manner.

1.66             The questions in the Green Paper related to the essence of the various means of alternative dispute resolution such as clauses in contracts, limitation periods, confidentiality, the validity of consent given, the effectiveness of agreements generated by the process, the training of third parties, their accreditation and the rules governing their liability.

(II)                European Code of Conduct for Mediators 2004

1.67             In 2004, a European Code of Conduct for Mediators was developed by a group of stakeholders with the assistance of the European Commission.[108] It sets out a number of principles to which individual mediators can voluntarily decide to commit. It is intended to be applicable to mediation in civil and commercial matters. Organisations providing mediation services can also make such a commitment, by asking mediators acting under the auspices of their organisation to respect this code. Adherence to the code is without prejudice to national legislation or rules regulating individual professions.[109]


(III)              Directive on Certain Aspects of Mediation in Civil and Commercial Matters 2008

1.68             In 2008 a European Directive on Certain Aspects of Mediation in Civil and Commercial Matters was agreed. The purpose of the Directive is to facilitate access to dispute resolution and to promote the amicable settlement of disputes by encouraging the use of mediation and by ensuring a sound relationship between mediation and judicial proceedings. The Directive must be implemented by 2011.[110]

1.69             The Directive applies to processes where two or more parties to a cross-border dispute of a civil or commercial nature attempt by themselves, on a voluntary basis, to reach an amicable settlement to their dispute with the assistance of a mediator. The Directive only applies to cross-border disputes, although it does not prevent Member States from applying the provisions of the Directive to internal mediation processes. Given the broad definition of “cross-border disputes”, the Directive's provisions on confidentiality and on limitation and prescription periods also apply in situations which are purely internal at the time of mediation but become international at the judicial proceedings stage, for example, if one party moves abroad after mediation fails.

(IV)              Organisation for Economic Co-operation and Development (OECD)

1.70             The Organisation for Economic Co-operation and Development (OECD) Recommendation on Consumer Dispute Resolution and Redress which was adopted by the OECD Council in July 2007 sets out principles for an effective and comprehensive dispute resolution and redress system that would be applicable to domestic and cross-border disputes.[111] Member countries, including Ireland, are required to review their existing dispute resolution and redress frameworks to ensure that they provide consumers with access to fair, easy to use, timely, and effective dispute resolution and redress without unnecessary cost or burden. In so doing, the Recommendation states that Member countries should ensure that their domestic frameworks provide for a combination of different mechanisms for dispute resolution and redress in order to respond to the varying nature and characteristics of consumer complaints.

D                  Conclusion

1.71             ADR facilitates early settlement of disputes. Early settlement can be both financially and emotionally advantageous to the disputant. It may also mean that an important relationship can be repaired and maintained, something which may be at risk in adversarial litigation. While it is true that lawyers often engage in negotiation and settlement, sometimes on the steps of the court, a successful negotiation often depends on the strength of the legal rights-based arguments, which can only be fully developed following expensive and time-consuming processes such as discovery. This legalistic approach often overlooks other avenues of settlement opportunity, which may better address a client’s underlying interests and needs.[112]

1.72             Alternative dispute resolution must be seen as an integral part of any modern civil justice system. “It must become such a well established part of it that when considering the proper management of litigation it forms as intrinsic and as instinctive a part of our lexicon and of our thought processes, as standard considerations like what, if any, expert evidence is required.”[113]

1.73             The Commission considers that citizens should be given a variety of options to resolve their disputes in a way which best needs their interests and goals. While litigation must always remain available for clients, this can be a very stressful undertaking and should be seen as the final place for resolving a dispute.[114] The Commission concurs with the view that, “we should want much more than an effective court system. We should want an integrated civil justice system wherein the courts are a forum of last resort, supported by other, closely related techniques for ensuring the law is open to all.”[115]

1.74             The Commission concurs with the view that ADR provides a suitable means of resolving disputes in appropriate circumstances and provisionally recommends that the key principles underlying ADR, in particular mediation and conciliation, should be set out in statutory form.

 

2         

CHAPTER 2            ADR processes & Terminology

A                  Introduction

2.01             In this chapter the Commission examines ADR processes and terminology. In Part B the Commission provides a general overview of ADR terminology and explains why it is necessary to ensure that the more commonly used ADR terms are clearly defined. In Part C the Commission defines the acronym ADR. In Part D the Commission provides an overview of the ADR spectrum which is made up of a body of ADR processes. In Part E the Commission defines and describes the main preventive ADR processes. In Part F the Commission defines and describes the main facilitative ADR processes. In Part G the Commission defines and describes the main advisory ADR processes. In Part H the Commission describes and defines the main determinative ADR processes. In Part I the Commission examines the concept of collective ADR. In Part J the Commission defines and describes judicial ADR processes.

B                  ADR Terminology: An Overview

2.02             An examination and clarification of ADR terminology is a necessary starting point in any discussion of ADR. The terminology of the mechanisms that make up the spectrum of dispute resolution processes appears to be understood and interpreted in many different ways. One of the questions asked by many is what is meant by conciliation and mediation? Whether they are the same and, if not, what are the differences?[116]

2.03            

text

 

 

text

 

The Rules of the Superior Courts (Commercial Proceedings) 2004[117]  and the Rules of the Superior Courts (Competition Proceedings) 2005[118] expressly mention both mediation and conciliation, but do not provide any definitions of the terms. It must be assumed that those drafting the 2004 and 2005 Rules intended them to have different meanings.[119]

2.04             The Commission considers that the development of clear and consistent definitions of the more commonly used ADR terms would serve several important functions.  Four functions were highlighted by the Australian National Alternative Dispute Resolution Advisory Council of Australia:

i)                   Common definitions or descriptions of ADR processes guarantee those who use, or make referrals to, ADR services receive consistent and accurate information, and have reasonable and accurate expectations about the processes they are undertaking.  This will enhance their confidence in, and acceptance of, ADR services.

ii)                  Consistent use of terms for ADR processes helps courts and other referring agencies to match dispute resolution processes to specific disputes.  Better matching would improve outcomes from ADR processes.

iii)                 A common understanding of ADR terms helps ADR service providers and practitioners to develop consistent and comparable standards. 

iv)                Common terms provide a basis for policy and programme development, data collection and evaluation.[120]

2.05             While consistent and clear terminology is necessary, it is important that this does not limit the creativity and innovation that have made ADR services so effective and popular.[121] Only a very limited number of key terms should be defined in statute, where consistency and compliance are essential.  Where diversity and flexibility are important, may be more appropriate to have descriptive terms.[122]


C                  Definition of ADR

2.06             In general terms, the Commission understands ADR to represent a broad spectrum of structured processes which are fundamental to any modern civil justice system in providing greater access to individualised justice for all citizens. ADR should not been seen as a separate entity from the court-based arrangements for civil justice but rather should be seen as an integral part of the entire system.

2.07             The acronym ADR is as flexible as the processes it embodies. It has been described as “A halfway house between the certainty of the adversarial system and the flexibility of negotiation.”[123] Emanating from the United States, the letters ADR evolved originally as an acronym for Alternative Dispute Resolution. Historically this referred to an alternative to the courts. This original view of ADR as an “alternative” dispute resolution mechanism to litigation in the court system is no longer appropriate. Current practice of mediation internationally (and in Ireland in the Commercial Court) demonstrates that ADR and litigation “are not homogenous, separate and opposed entities.”[124]

2.08             A number of other ‘A’ words have been developed which are aimed at identifying ADR as a dispute resolution concept in its own right and not as an alternative, but rather ‘additional’ to some other procedures, including litigation.[125] ‘Amicable’ dispute resolution’ has been proposed to emphasis the non-adversarial objectives and processes of ADR, as has ‘accelerated’ dispute resolution, which underlines one of the main advantages of many dispute resolution processes, in that disputes are often resolved more quickly than traditional litigation. As ADR has developed, importance has been placed on choosing techniques to match the needs of a dispute and the interests of the parties. Thus, ‘appropriate’ dispute resolution is often encouraged as an alternative component of the ADR acronym. 

2.09             Moving on from ‘ADR’, BDR for ‘better dispute resolution’, or IDR, for ‘innovative dispute resolution’ have also been promoted in other jurisdictions such as Canada. In some jurisdictions ADR is now so popular that it is no longer an alternative form of dispute resolution but a primary form of dispute resolution. Within the family law area ADR has been renamed “primary dispute resolution” in Australia for this reason.[126]

2.10             Furthermore, ADR has come to represent not only a body of processes for dispute resolution but also a body of processes for dispute avoidance and dispute management. This is increasingly evident in the employment sector. Recognising this, it has been argued that the letters should be seen in their own right as describing “a holistic concept of a consensus-oriented approach to dealing with potential and actual disputes. The concept encompasses dispute avoidance, dispute management and dispute resolution.”[127]

2.11             Today, ADR has flourished to the point that it has been suggested that the adjective should be dropped altogether and that ‘dispute resolution’ should be used to describe the modern range of dispute resolution methods and choices.[128] The Commission has provisionally concluded that at this stage in its development in Ireland it remains appropriate to refer to Alternative Dispute Resolution the Commission.

2.12             The Commission defines ADR as a broad spectrum of structured processes, including mediation and conciliation, which does not include litigation though it may be linked to or integrated with litigation, and which a involves the assistance of a neutral third party, and which empowers parties to resolve their own disputes.

D                  Classification of the ADR Spectrum

2.13             Dispute resolution processes can be arranged along a spectrum which correlates with increasing third party involvement, decreasing control of the parties over the process and outcome, and, usually, increasing likelihood of having the relationship between the disputants deteriorate during and after resolution of the dispute.[129]

2.14             This spectrum can also be grouped into five distinct categories.

 

 

Preventive ADR

Facilitative ADR

Advisory ADR

Determinative ADR

Collective ADR

Court-Based ADR

Negotiation

Mediation

Conciliation

Arbitration

Ombudsman Schemes

Early Neutral Evaluation

Partnering

 

Collaborative Lawyering

Adjudication

 

Court Settlement Masters

ADR Clauses

 

 

Expert Determination

 

Court Referred ADR

 

 

 

 

 

Small Claims Court

 

2.15             The Commission now turns to discuss each of these categories of ADR in turn.

E                  Preventive ADR Processes

2.16             Preventive ADR can be described as conflict avoidance processes that provide for efficient and systematic management of disputes. It is obvious that preventing unnecessary disputes can result in enormous monetary savings for individuals, avoid relationship break-downs and enhance trust and confidence between individuals. 

2.17             Preventive ADR is a tool which is widely used in the construction and employment sector. For example, The Advisory Development and Research Service of the Labour Relations Commission advise on and develop specific grievance, disciplinary, and disputes procedures. Section 1(5) of the Industrial Relations Act 1990, Code of Practice on Dispute Procedures (Declaration) Order 1992[130] expressly promotes the use of preventive ADR in the workplace:

“The major objective of agreed procedures is to establish arrangements to deal with issues which could give rise to disputes.  Such procedures provide for discussion and negotiation with a view to the parties reaching agreement at the earliest possible stage of the procedure and without resort to any form of industrial action.”

2.18             It is becoming increasingly mandatory that, in employment and consumer sectors, organisations must put in place internal structured dispute resolution procedures to deal with grievances.[131] There are various types of internal dispute resolution processes aimed at resolving grievances fairly, consistently and in a timely manner. These can range from a very formal arbitration procedure to the informal “open door” policy. Normally employees or consumers must first exhaust these internal procedures when a grievance occurs. If no resolution can be reached, the parties may then proceed to use external mechanisms. These internal dispute procedures resolve an overwhelming percentage of grievances and prevent the escalation of the grievance into a full-blown dispute.

2.19             Preventive ADR processes include negotiation, partnering, ADR clauses, joint problem solving, and systems design.

(1)                Negotiation

2.20             Negotiation is any form of voluntary communication between two or more people for the purpose of arriving at a mutually acceptable agreement. Negotiation is something that occurs in everyday life, without most of us really being aware that we are engaging in a process. For example, it may consist of a simple and informal conversation between a parent and a child regarding an increase in pocket money. On the other end of the spectrum, negotiation can be a highly structured and formal process between parties and their solicitors on the steps of the courthouse. Indeed, the majority of disputes, justiciable and non- justiciable, are resolved by this process and negotiation is at the core of all ADR processes.

2.21             Ury and Fisher note that “Negotiation is a basic means of getting what you want from others. It is a back and forth communication designed to reach an agreement when you and the other side have some interest that are shared and others that are opposed.”[132] By contrast, in adversarial negotiations the sides often begin from fixed positions with the two sides make offers and counteroffers supported by arguments until reaching a settlement. “To a large extent, the settlement will reflect the relative power of the parties”[133] and may result in a win-lose situation.

2.22             Principled negotiation refers to the interest-based approach to negotiation.[134] The essence of this approach is that parties concentrate on solving the problem by finding a mutually-beneficial solution rather than on defeating the other side. The four fundamental principles of principled negotiation are :

1) separating the people from the problem;

2) focusing on interests, not positions;

3) inventing options for mutual gain; and

4) insisting on objective criteria.[135]

2.23             In most settlement negotiations, parties are influenced consciously or unconsciously by their assessment of their alternatives to a negotiated agreement. The better their alternatives, the more they may may push for a more favourable settlement. The worse their alternatives, the more accommodating they may be in the settlement negotiations. This is sometimes referred to using the acronym which refers to “best alternative to a negotiated agreement."[136] BATNAs are important to negotiation because a party cannot make an informed decision about whether to accept a negotiated agreement unless they know what their alternatives are. Fisher and Ury outline a simple process for determining a party’s BATNA:

·           develop a list of actions you might conceivably take if no agreement is reached;

·           improve some of the more promising ideas and convert them into practical options; and

·           select, tentatively, the one option that seems best.[137]

2.24             In effect, the BATNA is the best result the party can hope to achieve if a settlement cannot be negotiated. For example, when negotiating a pay rise, having another job offer with a different employer at a higher rate of pay may be a powerful BATNA. The concept of determining a party’s BATNA is also used in mediation and conciliation.


(2)                Partnering

2.25             Partnering is a co-operative arrangement between two or more parties. It is based on the promotion and recognition of mutual goals and it requires all parties to agree on how they will make decisions, including strategies for resolving disputes during the lifetime of the project.

2.26             When partnering is successful, it can enhance communication and trust in business relationships such as in the context of a building or public infrastructure project. In that setting it addresses concerns of other stakeholders, such as private developers, community groups, governmental organisations and regulatory authorities, since they can be invited to participate in the partnering process. This can help build widespread support for a project.[138]

2.27             Partnering is used extensively in the construction industry. It was first used by the US Army Corps of Engineers in the late 1980s and was first applied in the UK in the North Sea oil and gas industries in the early 1990s.[139] Successive UK construction industry review reports emphasised the importance of partnering arrangements in order to facilitate and enhance team work across contractual boundaries.[140]

2.28             Partnering is also promoted within the employment sector. The National Centre for Partnership and Performance was established by the Irish Government in 2001 to promote and facilitate workplace change and innovation through partnership.[141]

2.29             Joint problem solving, consensus building and systems design are concepts which are similar to partnering.  They involve determining, in advance, what processes will be used for handling conflicts which arise within an organisation or between organisations and individuals.

 

 

(3)                ADR Clauses

2.30             An ADR clause is a contractual clause requiring the parties to attempt to settle any dispute arising out of the contract using an ADR process or processes. The Law Society of Ireland offers the following standard clause for mediation:

“If any dispute arises in connection with this agreement, the parties will attempt to settle it by mediation. Unless otherwise agreed between the parties, the mediator will be nominated by ...... Notice in writing (“mediation request”) must be given by one party to the other party [ies] to the dispute requesting a mediation. The mediation will start not later than [ ] days after the date of the mediation request. [No party will commence court proceedings / arbitration in relation to any dispute arising out of this agreement until it has attempted to settle the dispute by mediation.]”[142]

2.31             Similarly, the International Centre for Dispute Resolution offers the following short form model standard clause for international commercial contracts:

"Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be determined by arbitration administered by the International Centre for Dispute Resolution in accordance with its International Arbitration Rules."[143]

2.32             ADR clauses can also be ‘multi-tiered’ or ‘stepped’ which means that the parties agree to move along the ADR spectrum and they are required to engage in distinct and escalating stages of dispute resolution often finishing in final and binding resolution by arbitration or litigation. In other words, if one process fails, another dispute resolution process is attempted in order to resolve the dispute. For example Clause 38 (a) of the RIAI Articles of Agreement[144] states that:

“If a dispute arises between the parties with regard to any of the provisions of the Contract such dispute shall be referred to conciliation in accordance with the Conciliation Procedures published by the Royal Institute of Architects of Ireland in agreement with the Society of Chartered Surveyors and the Construction Industry Federation. If a settlement of a dispute is not reached under the Conciliation Procedures either party may refer the dispute to arbitration.”[145]

2.33             The Commission notes that ADR clauses must be carefully drafted as the Courts have shown a strong willingness to enforce them.[146]

F                  Facilitative ADR Processes

2.34             Facilitative processes involve a neutral and independent third party providing assistance in the management of the process of dispute resolution. The neutral and independent third party has no advisory or determinative role in the resolution of the dispute or in the outcome of its resolution but assists the parties in reaching a mutually acceptable agreement by encouraging parties to define the issues with the aim of finding common ground between the parties.  This category of ADR includes the process of mediation.

(1)                Mediation

2.35             The mediation process consists of the neutral and independent third party meeting with the parties who have the necessary authority to settle the dispute. The mediator begins the process by explaining the process to the parties, assessing the appropriateness of mediation to the situation and ensuring that the parties are willing and able to participate. This is known as a joint session. 

2.36             The neutral and independent third party then meets with each party privately to discuss their respective positions and their own underlying needs and interests. These private meetings are known as caucus. Information which is provided by the party to the third party during a caucus is strictly confidential, unless a party expressly consents to the third party informing the other party of such information.

2.37             Once all parties have expressed their views and interests to the mediator in private, the mediator will try to establish areas of common ground and provide the parties with the opportunity of exploring proposals for a mutually acceptable settlement. When an agreement is reached between the parties, the mediator will draft the terms of agreement, ensuring that all parties are satisfied with the agreement, and have all parties sign the agreement.[147]  This final session is known as the closing joint session.[148]

http://www.bailii.org/ie/other/IELRC/2008/cp50(image7).jpg

2.38             The parties are not bound by any positions taken during a mediation until a final agreement is reached and signed, at which point it becomes an enforceable contract. Mediation aims to achieve a ‘win-win’ result for the parties to a dispute. Some of the proclaimed advantages of mediation include: speed, privacy, cost, flexibility, informality, party-control, and preservation of relationships.

2.39             Several varieties of mediation have been developed. Shuttle mediation is a form of mediation where the mediator goes between the parties and assists them in reaching an agreement without meeting "face to face".[149] Transformative mediation does not seek resolution of the immediate problem, but rather, seeks the empowerment and mutual recognition of the parties involved.[150] Therapeutic mediation is an assessment and treatment approach that assists families in dealing with emotional issues in high conflict separation and divorce. The focus is on the parties themselves as opposed to the dispute.[151] In evaluative mediation the third party plays a more advisory role in assisting in the resolution of the disputes. The mediator allows the parties to present their factual and legal arguments. After evaluating both sides, he or she may then offer his or her own assessment of the dispute or put forward views about the merits of the case or particular issues between parties. This form of mediation mirrors conciliation.[152] Community mediation is mediation of a community issue. [153] Peer mediation is a process whereby young people, trained in the principles and skills of mediation, help disputants of their own age group to find solutions to a range of disputes and is often promoted in school settings for resolving disputes between peers.

2.40             Facilitation and fact-finding are similar concepts to mediation and involve a neutral and independent third party assisting the parties in identifying problems and positions but they do not impose or recommend any solutions to the parties.

2.41             The Commission views mediation as a facilitative, consensual and confidential process, in which parties to the dispute select a neutral and independent third party to assist them in reaching a mutually acceptable negotiated agreement. The participation of the parties in the process is voluntary and the mediator plays no advisory or evaluative role in the outcome of the process, but may advise on or determine the process.

G                  Advisory ADR Processes

2.42             Advisory processes include for example, conciliation and collaborative lawyering. They are also called evaluative processes, because they involve a neutral and independent third party, actively assisting the parties in reaching a mutually acceptable agreement. [154] The third party may evaluate the positions of the parties, advise the parties as to the facts of the dispute and recommend options for the resolution of the dispute.

(1)                Conciliation

2.43             Conciliation is the process which is used by the Labour Relations Commission to settle industrial disputes.[155] It is also extensively used in the construction industry and is a feature of the New Public Sector (GCCC) Contracts.[156]

2.44             Conciliation is a process similar to mediation but the neutral third party takes a more interventionist role in bringing the two parties together. In the event of the parties are unable to reach a mutually acceptable settlement, the conciliator issues a recommendation which is binding on the parties unless it is rejected by one of them. While the conciliator may have an advisory role on the content of the dispute or the outcome of its resolution, it is not a determinative role. A conciliator does not have the power to impose a settlement. This interpretation of conciliation mirrors the Model Law on International Commercial Conciliation of the United Nations Commission on International Trade Law. Article 6 (4) of the Model law states that “The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the dispute.”[157]

(2)                Collaborative Lawyering

2.45             Collaborative lawyering is a problem-solving method of dispute resolution, used primarily for the resolution of family disputes, where the parties and their lawyers agree, through a contractual commitment, to resolve the issues without litigation. Typically, each spouse retains a solicitor to help them to negotiate an outcome that they consider, following independent advice, to be fair and acceptable.[158] Lawyers represent the parties for settlement purposes only and should the process end, both solicitors are disqualified from any further involvement in the case. The aim is to find a fair and equitable agreement for the couple. The success and effectiveness of the system depends on the honesty, cooperation and integrity of the participants.[159]

2.46             If a client wishes to proceed through the collaborative law process, both sides must sign a legally-binding agreement to disclose all documents and information that relate to the issues. Negotiation sessions take place during four-way meetings, with the solicitors and clients all meeting together. Both the clients and the solicitors must agree to work together honestly and in good faith.  Neither party may go to court, or even threaten to do so, when they are working within the collaborative law process.[160]

H                  Determinative ADR Processes

2.47             Determinative processes involve a neutral and independent third party hearing both sides of the dispute and making a determination, which is potentially enforceable, for its resolution.  This category of ADR includes the processes of arbitration, adjudication, and expert determination.

(1)                Arbitration

2.48             Arbitration is a long-established procedure in which a dispute is submitted, by agreement of the parties, to one or more impartial and independent arbitrators who make a binding and enforceable decision on the dispute. It is a sophisticated method of dispute resolution in Ireland and is the preferred method of dispute resolution in a number of sectors in Ireland, including the construction and insurance industries.

2.49             Ireland has separate legal regimes for international and domestic arbitration. Domestic arbitrations are governed by the Arbitration Act 1954 as amened by the Arbitration Act 1980. The Arbitration (International Commercial) Act 1998 introduced the UNCITRAL Model Law as the procedural framework for international arbitrations.

2.50             The arbitrator is usually selected from a panel of available arbitrators or may have already been agreed upon in the arbitration clause.  Once the matter has been submitted to the arbitrator, the arbitrator will contact all parties. A schedule will be set, which includes when all documents must be exchanged, when all witnesses must be disclosed, when arbitration briefs are to be submitted, and where and when the hearing will be conducted. A preliminary meeting will be held at arbitrator's request. This may be a joint session with all parties present or may be conducted by telephone conference. At the arbitration hearing, each of the respective parties is allowed to present evidence. After review of the evidence, the arbitrator will make an "arbitrator's award.” After the arbitrator's award has been issued, the prevailing party often has the ability to have it issued as an enforceable court order.[161]

2.51             The Chartered Institute of Arbitrators, Irish Branch, which is a non-statutory body, currently administers the training and promotion of arbitration on the island of Ireland. The Institute refers to a number of advantages which it states arbitration enjoys over litigation:

·           Flexibility: The arbitrator is typically chosen by the parties or nominated by a trusted third party.

·           Specialist Knowledge: The arbitrator will usually have specialist knowledge of the field of activity.

·           Efficiency: The parties can decide on the location, language and to a great extent, the timing of the hearing to facilitate the parties and their witnesses.

·           Informality: The process is less formal than court.

·           Certainty: The arbitral award is binding and enforceable.

·           Finality: The arbitral award is final and cannot be appealed.

·           Speed: Expedition results in cost savings.

·           Privacy: Arbitral awards are private and do not become binding precedents.[162]

2.52             There are now many variants of arbitration developing in other jurisdictions. These include

·           Baseball arbitration - In this arbitral process, each party submits a proposed monetary award to the arbitrator. At the conclusion of the hearing, the arbitrator is required to select one of the proposed awards, without modification. This approach, sometimes called “Last Offer Arbitration”, severely limits the arbitrator's discretion.[163]

·           Bounded arbitration: In this process the parties agree privately without informing the arbitrator that the arbitrator's final award will be adjusted to a bounded range.[164]

·           Incentive arbitration: In this form of arbitration, the parties agree to a penalty if one of them rejects the arbitrator’s decision, resorts to litigation, or fails to improve his position by some specified percentage. Penalties may include payment of attorneys' fees incurred in the litigation;[165]and

·           High-low arbitration: This is an arbitration in which the parties agree in advance to the parameters within which the arbitrator may render his or her award.[166]

(2)                Hybrid Models including combinations of mediation and arbitration: Med-Arb and Arb-Med

2.53             Hybrid models, which involve a combination of mediation and arbitration, have also developed. These hybrid processes are known as med-arb and arb-med. Both models allow the parties to select a single third party to serve as both mediator and arbitrator.

2.54             Med-arb is a process in which the parties first attempt to settle the dispute through mediation. If mediation does not yield a settlement, the mediator switches roles from mediator to arbitrator, and imposes a binding decision on the disputing parties. Med- arb is commonly used in labour disputes in the United States and is considered suitable for patent disputes also.[167]

2.55             Arb-med is a process where the parties first present their case to arbitration. At the end of the hearings, the arbitrator writes up a decision and seals it without disclosing its contents to the parties. Then, for a fixed period the parties mediate the dispute. If the parties reach agreement before the deadline for the end of the mediation, the parties never learn about the contents of the arbitrator’s decision. If they do not reach agreement by the specified deadline, the arbitrator’s decision becomes final and binding on the parties.[168] The arb-med procedure has been used in South African union management relations in the auto and steel industries and, to a limited extent, in the United States.

2.56             These hybrid models have been met with some criticism. It has been suggested that the parties are likely to be inhibited in their discussions with the mediator if they know that the mediator might be called upon to act as arbitrator in the same dispute;[169] and a third party who mediates and then assumes the role of arbitrator may be biased by what has been conveyed to him or her informally and confidentially in the mediation process.[170]

2.57             The Commission views mediation and arbitration as two very distinct ADR processes. The Commission recognises that many disputes which are not settled by mediation may then be arbitrated.

(3)                Adjudication

2.58             Adjudication is a process similar to expert determination and involves a neutral and independent third party, an adjudicator, who uses his or her own knowledge and investigations, whilst also weighing the evidence presented by the parties, in order to reach a legally binding decision.

2.59              Adjudication is used in this jurisdiction by the Private Residential Tenancies Board (PRTB) to resolve disputes between landlords and tenants.  A PRTB adjudicator is appointed to the case and examines the evidence of the parties and investigates the dispute fully. The Adjudicator will decide how the dispute is to be resolved. The hearing is confidential. An adjudication decision that is not appealed will become a binding determination order of the PRTB in resolution of the dispute.[171] Adjudication is also used by the Financial Service Ombudsman’s to resolve complaints that have not been settled by mediation.[172] The process is most commonly associated with the resolution of disputes in the building and construction industry in the UK.

(4)                Expert Determination

2.60             Expert determination is a process in which the parties to a dispute appoint a neutral and independent third party to make a final and binding determination on a dispute which relates to that expert’s particular area of specialisation. The parties therefore agree in advance to be bound by the decision of the expert determination.

2.61             Expert determinations can be particularly useful in disputes involving technical issues. For example, Bord Gáis Eireann’s dispute resolution procedures provide that a dispute relating exclusively to technical issues which is not resolved by mediation within 30 days may be referred to “determination by an Expert.”[173]

2.62             Expert determinations are often conducted purely on written submissions. It has been suggested that this makes the process short and cost effective compared to litigation. It can also be used in conjunction with other dispute resolution systems such as mediation, where a technical issue needs to be resolved quickly and with the correct expertise. Common examples of expert determination include the use of a surveyor in a rent review, or an accountant to provide a valuation under a share purchase agreement.[174]

2.63             Whilst the expert determination process can resemble arbitration there are several notable differences between the two processes.[175] There are currently no statutory provisions applicable to expert determinations. In terms of enforcement, an expert’s determination will not be enforceable domestically without separate court action.[176] Consequently, whilst expert determination may resolve the dispute in a quickly, enforcing the determination may necessitate arbitration or litigation in any event.[177]

I                    Collective ADR

2.64             Collective ADR can be used successfully as a method of dealing with multi-party scenarios without resorting to litigation. An example of collective ADR was the Alder Hay mediation case.[178] Similarly, “test cases” such as those used in the Social Welfare Equality Claims of the 1980s can be used as a means of assisting the administrative resolution of similarly situated parties.[179] In 2002 a single complaint by a visually impaired man to the Office of the Ombudsman resulted in almost 700 similarly situated people receiving an increased social welfare allowance.[180]

2.65             Collective ADR processes can also prevent the creation and escalation of disputes through regulation. Examples of regulators include the Environmental Protection Agency,[181] the Health and Safety Authority,[182] Financial Regulator,[183] the Commission for Energy Regulation,[184] the Commission for Aviation Regulation,[185] and the Commission for Communications Regulation.[186] As noted in the Law Reform Commission’s Report on Multi-Party Litigation “the impact of effective regulatory mechanisms will often work to prevent the wrong arising in the first place and thus head off the need for any form of multi-party litigation from the outset.”[187]

2.66             In addition to the collective ADR processes represented by regulators another collective ADR process is offered by ombudsman schemes.

(1)                Ombudsman Schemes

2.67             An Ombudsman can either be appointed by statute or through a non-statutory sectoral scheme. Ombudsmen have wide powers of investigation and their recommendations need not be limited to the form of orders commonly associated with litigation. There are a number of Ombudsmen operating in the State.

(a)                Office of the Ombudsman

2.68             The Office of the Ombudsman which was created by the Ombudsman Act 1980, investigates complaints against Government Departments and Offices and other public bodies such as local authorities, the Health Service Executive and An Post. The Office of the Ombudsman has dealt with over 68,000 complaints since its inception. In 2007, 2,578 valid complaints were received by the Ombudsman which was an increase of 14.8% on the intake for 2006. In addition 9,334 enquiries were dealt with during 2006.[188]

2.69             Most complaints are finalised following an informal examination but, if it is not possible to resolve the complaint informally, the Ombudsman may decide to undertake a formal investigation of the matter. If, at the end of this process, the complaint is found to be justified the Ombudsman will make recommendations to resolve it.

2.70             The Ombudsman has extensive powers. They can demand any information, document or file from a public body complained of and can require any official to give information about a complaint. In most instances the Ombudsman's recommendations are complied with but if the public body concerned fails to act on the Ombudsman's recommendations he or she may present a special report to the Houses of the Oireachtas on the matter.

2.71             Typical examples of matters dealt with by the Ombudsman include: entitlement to old age and retirement pensions; disputes about income tax credits; entitlement to higher education grants; entitlement to agricultural livestock grants; entitlement to local authority housing; and disputes about the medical card scheme.[189]

Ombudsman Case Study

The complainant's car was ticketed for being parked on a yellow box in a Castlebar Town Council car park. The complainant acknowledged that she may not have been parked in a designated parking space but maintained that, on the day in question, it was snowing and that when she arrived at the car park the ground was covered with snow and there was no way of knowing the exact location of the designated parking spaces. She appealed the matter to the Council but her appeal was rejected. The Traffic Warden who had issued the ticket maintained that, at the time of the offence, there was no snow on the ground and that there is an onus on drivers to be aware of parking signs etc. The Ombudsman considered that while the complainant was not parked correctly, having regard to the circumstances which existed on the day, inflexibility in the application of the relevant regulations would give rise to inequity in this case. The Ombudsman requested that the Council review its position and having considered the situation in detail the Council decided to cancel the fine and issued a refund to the complainant.[190]

2.72             This mediated result indicates the broad extent of the Ombudsman’s statutory role.

(b)               Financial Services Ombudsman

2.73             Voluntary ombudsman schemes for the credit institutions and the insurance sector were in place in Ireland since the early 1990s. These schemes constituted recognition by the sectors that a complaints resolution process outside of the courts was necessary and appropriate. While the voluntary schemes worked well it was felt in the late 1990s that a statutory Ombudsman scheme for all providers of financial services with enhanced statutory powers was necessary.[191] This was enacted in the Central Bank and Financial Services Authority of Ireland Act 2004.

2.74             The Financial Services Ombudsman deals independently with unresolved complaints from consumers about their individual dealings with all financial service providers. The service is currently free to eligible consumers who include all natural persons, limited companies with a turnover of €3 million or less (SMEs), and unincorporated bodies, including clubs, charities, trusts and partnerships.

2.75             The principal function of the Financial Services Ombudsman is to deal with complaints by mediation and, where necessary, by investigation and adjudication.[192] Participation in the mediation by the parties to a complaint is voluntary, and a party may withdraw at any time. The Financial Services Ombudsman may abandon an attempt to resolve a complaint by mediation on forming the view that the attempt is not likely to succeed.[193] Evidence of anything said or admitted during a mediation, or an attempted mediation, of a complaint, and any document prepared for the purposes of the mediation, are not admissible in any subsequent investigation without the consent of the person who made the admission, or in any proceedings before a court or a tribunal.[194]

2.76             The Financial Services Ombudsman can direct a financial service provider to do one or more of the following: rectify or change the conduct complained of or its consequences; provide reasons or explanation for that conduct; change that practice; pay compensation up to a maximum of €250,000 or €26,000 annuity; or take any other lawful action.[195]

2.77             The Financial Services Ombudsman has extensive legal powers to require the financial services provider to provide information including the power to require employees to provide information under oath. If necessary the Ombudsman can enter premises of providers and demand the production of documents.[196] In the case of non compliance, the Financial Services Ombudsman can seek a Circuit Court Order. Any person who obstructs the Financial Services Ombudsman commits an offence and is liable on summary conviction to a fine of up to €2,000, imprisonment for up to 3 months or both.[197]

2.78             In 2007, 4,374 complaints (2,445 involving insurance sector and 1,929 involving credit institutions) were received by the Ombudsman. This was an increase of 15% over 2006.[198] In 2005, the highest compensation awarded by the Ombudsman was €56,000 against a credit institution and €32,000 against an insurance sector provider. [199] By contrast, €116,000 was awarded in five instances in 2007 and over €200,000 was awarded to a professional rugby player.[200]

Financial Services Ombudsman Case Study

The complainant had booked a holiday. After the booking she was diagnosed with a serious illness and as a result was not able to travel. The complainant then claimed her cancellation costs of €4,000 from the insurance company with whom she had arranged travel insurance.

The company informed her that as holiday would have lasted 61 days, it would not be covered by the insurance policy. The insurance policy stated that: “The duration of a trip must not exceed 60 days”. The complainant claimed that her holiday was for 59 nights and, with the varying schedule of flights, her trip would not have exceeded the time frame of 60 days.

The Financial Services Ombudsman noted that the insurance policy did not specifically provide a definition in its policy document as to what constituted a “day” for the purpose of cover and he referred to a dictionary definition of a “day” - “A period of 24 hours as a unit of time usually from midnight to midnight”. Using this definition, and taking the times of departure and arrival to be exact, he found that the complainant’s intended trip would have only been for 59 full days. He directed the company to pay the complainant her cancellation costs.[201]

2.79             This determination used interpretive techniques familiar to lawyers. The difference in this case is that the adjudicative process was free to the consumer.[202]

 

(c)                Office of the Pensions Ombudsman

2.80             The Pensions Ombudsman was established by Part 11 of the Pensions Act 1990 (inserted by the Pensions (Amendment) Act 2002) to investigate and decide complaints and disputes involving occupational pension schemes and Personal Retirement Savings Accounts (PRSAs).

2.81             Complaints are usually made against those responsible for the management of occupational pension schemes and PRSAs. A complaint may be against those who are (or have been) trustees, managers, employers, former employers and administrators (including PRSA providers). The Pensions Ombudsman also investigates disputes of fact or law concerning pension schemes, between members and others entitled to benefit from the schemes, and trustees or managers or employers.[203]

2.82             The Pension Ombudsman Regulations 2003[204] require that all occupational pension scheme trustees and PRSA providers put in place internal procedures for dealing with complaints and disputes that come under the jurisdiction of the Pensions Ombudsman. The outcome of an internal dispute resolution procedure is not binding on any party to a dispute. The right to complain to the Pensions Ombudsman remains available if the individual is dissatisfied at the end of the internal dispute resolution procedure.[205] The Pensions Ombudsman has discretion to waive the requirement for internal disputes resolution in appropriate circumstances.

2.83             When the Pensions Ombudsman nears the end of an investigation, he may, but will not always, give a "preliminary view" to all parties to the complaint or dispute. This will list the facts as found during the investigation and the Pension Ombudsman's view on how he is likely to rule on the matter. This can be said to be similar to the process of early neutral evaluation. At that stage the parties will have a chance to provide any further information or evidence that they feel is important to the case.

2.84             The Pensions Ombudsman will then make a final ruling. Financial compensation may be awarded in a case where the Pensions Ombudsman decides that a complainant has been at a financial loss due to the poor administration of a pensions scheme or a PRSA. The Pension Ombudsman's ruling is final, subject to a right of appeal to the High Court. The Pensions Ombudsman may make a ruling even if the complaint is withdrawn during the investigation.

2.85             The Pensions Ombudsman, under section 137 of the Pensions (Amendment) Act 1990, has the statutory power to formally require any person who, in the opinion of the Pensions Ombudsman, is in possession of information, or has a document in his power or control, that is relevant to the investigation to furnish that information to the Pensions Ombudsman for the purposes of the investigation. If it appears to the Pensions Ombudsman that a person has failed to furnish this information, the Pensions Ombudsman may apply to the Circuit Court for an order requiring that person to comply with the requirement. In May and April 2008, the Pensions Ombudsman initiated separate legal actions to secure court orders against builders who had failed to produce the requested documents. The Pensions Ombudsman has stated that

“Anybody who fails to comply with a request for information from my Office should be fully alive to the fact that I will not hesitate to instigate a criminal action for non compliance and civil action to enforce the request.”[206]

2.86             In 2006, of a total of 730 complaints made or on hand, 117 were resolved by mediation.[207] The average time taken to arrive at a satisfactory resolution through mediation was 33 weeks, compared with an average of 64 weeks where a final determination was made.[208] This indicates the benefits in terms of time efficiency in a mediated resolution as opposed to one which requires a final adjudicated decision. In 2007, the Pensions Ombudsman succeeded in closing 584 cases which was an increase of 90% on 2006. The construction industry was instructed by the Pensions Ombudsman to repay over €1.6 million in arrears in pension and death benefit in 2007.[209]

Cases Received

2004

2005

2006

2007

Total

 

297

389

439

515

(d)               Ombudsman for Children

2.87             The Ombudsman for Children is a free, independent and impartial complaints handling service which was established under the Ombudsman for Children Act 2002. The Ombudsman may examine complaints made by children (or adults on their behalf) against public organisations, schools or hospitals. In accordance with the 1989 Convention on the Rights of the Child the Ombudsman also promotes the rights of children in the Convention and assists the development of government policy on children.

2.88             By December 2007, 1,710 complaints had been received by the Ombudsman for Children, representing a 43% increase from 2006.[210]

Ombudsman for Children Case Study

A mother made a complaint that her local authority had failed to provide adequate housing for her son who had been diagnosed with a progressive disabling disease. The mother refused a house offered by the local authority on foot of medical advice that the accommodation would not meet her son’s specific and changing needs. The local authority contended that the house was developed for her son in consultation with his occupational therapist. Since 2000, the local authority had refused to review the child’s case despite several medical representations outlining the deterioration in the boy’s condition.

Following an investigation, the Office of the Ombudsman for Children found that there was no evidence that the house had been adapted for the boy’s specific needs and, therefore, did not constitute a reasonable offer and that no review of the case took place for a period of almost 4 years. On this basis, the Office made a number of recommendations including that the child’s case be reviewed to find a suitable housing solution for him; that the local authority administrative processes be reviewed; and that the local authority adopt a more integrated and responsive approach to children. The local authority recognised the findings and recommendations as fair and accurate and agreed to work on implementing them.[211]

(e)                Ombudsman for the Defence Forces

2.89             The Ombudsman for the Defence Forces was established by the Ombudsman (Defence Forces) Act 2004. The Ombudsman for the Defence Forces investigates complaints by members and former members of the Defence Forces where these have not been adequately addressed by the internal military complaints process.

2.90             Serving members of the Permanent Defence Forces and the Reserve Defence Forces must, first, make a complaint through the internal Defence Force structures under section 114 of the Defence Act 1954. If, 28 days after making that complaint, there is no resolution of the dispute a serving member of the Defence Forces is entitled to bring their complaint to the Ombudsman. Former members of the Permanent Defence Forces and former members of the Reserve Defence Forces can make a complaint directly to the Defence Ombudsman. Serving and former members of the Defence Forces have to make a complaint either within 12 months of the action happening or within 12 months of becoming aware of the action.[212]

2.91             The Ombudsman for the Defence Forces has wide powers to investigate any action that may have been taken without proper authority, taken on irrelevant grounds, the result of negligence or carelessness, based on wrong or incomplete information, improperly discriminatory or contrary to fair or sound administration.[213]

2.92             If the investigation finds that the person who made the complaint was adversely affected by the action, the Ombudsman for the Defence Forces will make recommendations to the Minister for Defence. The recommendations may set out measures that should be taken to rectify the situation. If the Ombudsman for the Defence Forces believes that the response of the Minister for Defence to their recommendations is unsatisfactory then he or she may issue a special report on the case. That special report will be included in the Office’s Annual Report. The recommendations made by the Ombudsman for the Defence Forces to the Minister for Defence, and the Minister's response, will be provided to the person who made the complaint.[214]

2.93             In 2007, the Ombudsman received 168 complaints which represented a 121% increase on 2006. 76 cases were referred to the Office, a 192% increase on 2006. 29 final reports issued, with 20 cases upheld.[215]


 

(f)                 Garda Síochána Ombudsman Commission

2.94             The Garda Síochána Ombudsman Commission was established under the Garda Siochana Act 2005. The Ombudsman Commission is empowered to: investigate complaints against members of the Garda Síochána; investigate any matter, even where no complaint has been made, where it appears that a Garda may have committed an offence or behaved in a way that would justify disciplinary proceedings; and investigate any practice, policy or procedure of the Garda Síochána with a view to reducing the incidence of related complaints.

2.95             Any member of the public who is directly affected by or who witnesses conduct by a member of the Garda Síochána that is alleged to constitute misbehaviour can complain to the Garda Ombudsman. Generally complaints are to be made within 6 months of the incident in question. The Garda Ombudsman may extend this time limit if it considers that there are good reasons for doing so. If a complaint is admissible the Garda Ombudsman may then refer less serious complaints for resolution through mediation or informal resolution process.

2.96             Section 90 of the Garda Siochana Act 2005 provides that mediation or other informal resolution may take place with the consent of both the complainant and the Garda member who is the subject of the complaint.[216] The process involved is confidential and anything said may not be used in any civil or criminal proceedings.[217]

2.97             The mediation process functions under the auspices of a Mediation Unit managed by Garda Ombudsman Case Officers and is undertaken by accredited mediators. These may be Garda Ombudsman staff or independent mediators appointed from an approved panel.[218]

2.98             If mediation succeeds no further action need be taken in respect of the complaint. Both parties will record the successful resolution in writing and a copy of this will be kept by the Garda Ombudsman. The Garda Commissioner will be advised of the resolution and any record of the complaint held by the Garda Síochána will be expunged. If mediation does not succeed due to the failure of the complainant to provide reasonable assistance for the purpose of conducting the mediation process, the Garda Ombudsman retains the discretion to either close the case or to have it investigated pursuant to section 92 of the 2005 Act.

(g)               Press Ombudsman

2.99             The Office of the Press Ombudsman is part of a new system of independent regulation for the print media in Ireland connected with a 2007 Code of Practice agreed by the Press Council, a representative body of the industry. The aim of the Ombudsman is to provide the public with a quick, fair and free method of resolving any complaints about newspapers and periodicals that breach the Code of Practice.

2.100          The Ombudsman's Office will, in the first instance, attempt to resolve the matter by making direct contact with the editor of the publication concerned. It will outline the complaint to the publication and seek to resolve the matter by a process of conciliation. If conciliation is not possible, the Ombudsman will examine the case and make a decision and may also refer significant or complex cases to the Press Council. The Defamation Bill 2006 when enacted will give statutory backing to the Press Ombudsman.[219]

(h)               Legal Services Ombudsman

2.101          The Legal Services Ombudsman is to be established under the Legal Services Ombudsman Bill 2008.[220]  Members of the public will be able to appeal to the Legal Services Ombudsman if they are dissatisfied with the outcome of complaints to the disciplinary bodies of the Law Society of Ireland (which deals with complaints concerning solicitors) or the Bar Council of Ireland (which deals with complaints concerning barristers).

2.102          The 2008 Bill states that the functions of the Legal Services Ombudsman are to receive and investigate complaints about the handling by the Law Society and Bar Council of complaints made to them by clients of barristers and solicitors, to ensure that such complaints are dealt with fairly, effectively and efficiently by the two professional bodies, to assess the adequacy of their admissions policies and to promote public awareness of the complaints procedures of the two bodies.[221]

2.103          Sections 21 and 22 of the 2008 Bill provide for the making and investigation of complaints. A complaint may be made to the Ombudsman concerning the handling by the Bar Council or the Law Society of a complaint against a barrister or solicitor. A complaint may also be made to the Ombudsman about a decision of the Law Society to make or refuse to make a payment from the Law Society’s Compensation Fund which deals with money taken in a fraudulent manner by solicitors. Complaints to the Legal Services Ombudsman must be made within 6 months of the determination of the related complaint by the relevant body.

2.104          Individuals or the professional bodies may ask the High Court to stop an investigation, and the High Court can also be asked to decide on instances where the Ombudsman might refuse to discuss specific cases before committees of the Oireachtas.[222]

(i)                 The European Ombudsman

2.105          The Office of European Ombudsman, which is an office of the European Union, investigates complaints about maladministration in the activities of EU institutions and bodies, with the exception of the Court of Justice and the Court of First Instance acting in their judicial role. The European Ombudsman has defined "maladministration" by reference to a failure to respect human rights, the rule of law and principles of good administration. The Ombudsman usually conducts inquiries on the basis of complaints but can also launch inquiries on his own initiative. [223]

2.106          The European Ombudsman may simply need to inform the institution concerned about a complaint in order for it to resolve the problem. If the case is not resolved satisfactorily during the course of his inquiries, the Ombudsman will try, if possible, to find a friendly solution which puts right the case of maladministration and satisfies the complainant. If the attempt at conciliation fails, the European Ombudsman can make recommendations to solve the case. If the institution does not accept the recommendations, he can make a special report to the European Parliament

2.107          If an inquiry leads to a finding of maladministration, the European Ombudsman tries to achieve a friendly solution whenever possible. In some cases, a friendly solution can be achieved if the institution or body concerned offers compensation to the complainant. Any such offer is made ex gratia, that is, without admission of legal liability and without creating a legal precedent.

2.108          In 2007, the European Ombudsman received 3,211 new complaints, compared to 3,830 in 2006. In almost 70% of cases, the Ombudsman was able to help the complainant by opening an inquiry into the case, transferring it to a competent body, or giving advice on where to turn for a prompt and effective solution to the problem. The main e-mail account of the Ombudsman was used to reply to a total of 7,273 e-mails requesting information in 2007. Of these, 3,127 were mass mailings submitted by citizens and concerned complaints already received by the European Ombudsman, while 4,146 constituted individual requests for information. In total, therefore, the European Ombudsman handled 10,484 complaints and information requests from citizens in 2007.[224]

2.109          The main types of maladministration alleged were lack of transparency, including refusal of information (28% of cases), unfairness or abuse of power (18%), unsatisfactory procedures (13%), avoidable delay (9%), discrimination (8%), negligence (8%), legal error (4%), and failure to ensure fulfilment of obligations, that is, failure by the European Commission to carry out its role as "guardian of the EC Treaty” (3%).[225]

European Ombudsman Case Study[226]

The Ombudsman received a complaint alleging that the European Commission had wrongly failed to take action against Ireland for possible infringement of the EC Habitats Directive. The complainant also complained about the Commission's decision not to take further action on arguments relating to possible infringement of the Waste Directive. The Ombudsman found that the Commission had provided a reasonable explanation of its strategic role in relation to the implementation of these Directives. He also noted that the Commission had given the complainant relevant useful advice in this case.

2.110          As can be seen from the case study above, it is important to note that the Ombudsman process can lead to a decision in favour of the party about whom a complaint is made.

J                   Judicial ADR Processes.

2.111         Judicial ADR processes are dispute resolution processes which often occur after litigation has been initiated and during the lead up to the commencement of a trial and are aimed at reaching a settlement on some or all issues. These processes may involve the assistance of a judge of the Court or a Court official in overseeing the process.

2.112         Judicial ADR processes are well developed in Canada and the United States and include early neutral evaluation, mini-trial, Court settlement conferences and small claims procedures. The small claims procedure is also now well-established in Ireland, operating through the District Court.

(1)                Small Claims Court

2.113          The small claims procedure is an alternative method of commencing and dealing with certain civil proceedings. It is currently regulated under the District Court (Small Claims Procedure) Rules 1997 and 1999. It provides a fast and inexpensive alternative dispute resolution process for consumers without having to use a solicitor.[227]

2.114          This process allows parties to a dispute to resolve the issues between them by mediation through a District Court clerk, who for this purpose is called the Small Claims Registrar. These court officials settle many cases through mediation without having to list the case for court. The small claims procedure operates an online dispute resolution procedure where claims can be filed online. The current maximum jurisdiction of the small claims procedure is €2,000. As noted by the Consumer Strategy Group, “The disproportionate costs and time involved in legal action have been alleviated to some degree by the introduction of the Small Claims Court, whose procedures are simpler and whose costs are low.” [228]

(2)                Early Neutral Evaluation

2.115          Early neutral evaluation is a process in which parties to a dispute appoint a neutral and independent third person, usually a judge or somebody legally qualified, who provides an unbiased evaluation of the facts, evidence or legal merits of a dispute and provides guidance as to the likely outcome should the case be heard in court. The evaluation is without prejudice and is non-binding.[229]

2.116          The purpose of early neutral evaluation is to reduce the costs of litigation by facilitating communications between the parties while at the same time providing them, early in the process with a realistic analysis of their case.[230] It is often described as a means of providing the parties with a ‘reality-check’ of the strengths and weaknesses of their case. Early neutral evaluation often occurs early in the litigation process, traditionally in the pre-trial period prior to the commencement of discovery (the exchange of detailed documents between the parties).

2.117          The evaluator holds an informal meeting of clients and their legal representatives where each side presents the evidence and arguments supporting its case. The evaluator identifies areas of agreement and clarifies and focuses the issues. The evaluator generally writes an evaluation in private that may include an assessment of the relative strengths and weaknesses of each party's case and the reasoning that supports this assessment. This evaluation is provided to the parties either privately or jointly. 

2.118          Early neutral evaluation is often appropriate when the dispute involves technical or factual issues that lend themselves to expert evaluation. It is also used when the parties disagree significantly about the value of their cases. In Australia, early neutral evaluation is increasingly used in family law disputes where a husband and wife are in conflict over issues arising out of their martial breakdown. The evaluator, who is often a family law specialist, will provide to both parties an early neutral evaluation of the likely result if the matter were to be litigated in the Family Court. This process is also used in certain US state courts, and is offered by the English Commercial Court judges and the Technology and Construction Court.[231]

2.119          Case appraisal is a similar process to early neutral evaluation in which a neutral and independent third party investigates the dispute and provides advice on possible and desirable outcomes for the resolution of the disputes.

(3)                Mini Trial

2.120          The mini trial is a flexible voluntary process that involves a blend of mediation, adjudication and negotiation procedures. It can be described as a highly structured settlement process. 

2.121          A procedural agreement is usually drawn up between the parties, outlining their obligations, their right to terminate the process, the confidentiality of the process, and the effect on any litigation. Before the mini trial there is an exchange of documents, without prejudice to any litigation if the mini-trial is unsuccessful. The parties select a neutral adviser, often a retired judge or expert in the matter of the dispute, to preside over the mini-trial. The adviser’s role is that of a facilitator in the proceedings, as in mediation. However, if settlement is not reached, the advisor may be asked what the likely trial outcome would be and so acts then as an arbitrator in a non-binding arbitration. At the mini-trial, lawyers for each side make summary presentations, generally in the range of one to six hours. Witnesses, experts or key documents generally may be used. Once an agreement is reached, it is enforceable as a contract between the parties.[232]

2.122          The judicial mini-trial, used in Canada and the United States, is a voluntary process similar to early neutral evaluation. The primary difference is that a judge serves as the evaluator. In the process, the parties’ legal representatives present brief argument to a judge, who will not be the judge if the case goes to trial. The judge hears both sides and then meets with the parties and their legal representatives in an attempt to resolve the dispute. In doing so, the judge may point out the strengths and weaknesses of each party’s case.

(4)                Court Settlement Process

2.123          Court settlement process is a process similar to the judicial mini-trial and was introduced into the England and Wales Technology and Construction Court in 2006 as a pilot scheme. It is a confidential, voluntary and non-binding dispute resolution process in which a settlement judge (who is a judge of the Technology and Construction Court) assists the parties in reaching an amicable settlement at a court settlement conference.[233]

2.124          Unless the parties otherwise agree, during the court settlement conference the settlement judge may communicate with the parties together or with any party separately, including private meetings at which the settlement judge may express views on the disputes. Each party must cooperate with the settlement judge. A party may request a private meeting with the settlement judge at any time during the court settlement conference. The parties shall give full assistance to enable the court settlement conference to proceed and be concluded within the time stipulated by the settlement judge. If an agreement is reached, it becomes binding on the parties once they sign the agreement. If no settlement is reached, the case continues, but with a different judge. The settlement judge cannot be called as a witness in any future proceedings connected with the claim.  After the process, the parties have the option of asking the settlement judge for an "assessment", giving his views on the dispute, including prospects of success and likely outcome. This will be entirely confidential and the parties will not be able to use or refer to it in any subsequent proceedings.[234]

2.125          Judicial settlement conferences are either permitted or required by statute in many United States courts as a procedural step before trial.[235] Federal judges are expressly authorised under Rule 16 of the Federal Rules of Civil Procedure 2007 to use settlement procedures to resolve the case or controversy before the court. Local court rules often provide for mandatory settlement conferences during the pre-trial proceedings. The judge handling the case may conduct informal settlement discussions with the parties but, in recent years, a practice has developed of assigning a judge or magistrate to conduct the settlement conference. This judge will not be the judge to try the case if settlement is unsuccessful. This separates the roles of adjudicator and mediator. Once again, the settlement judge has no power to impose settlement and does not attempt to coerce a party to accept any proposed terms. The parties may agree to a binding settlement.  If no settlement is reached, the case remains on the litigation track.

K                  Conclusion

2.126          The Commission considers that ADR processes should become an integral part of the civil justice system. Therefore it is important that ADR processes and terminology are clearly defined and understood in order to increase confidence and trust in their suitability and potential for resolving disputes.

2.127          The Commission provisionally recommends that the more commonly used ADR terms, in particular mediation and conciliation, should be clearly and consistently defined in legislative form.

2.128          The Commission provisionally recommends that when provision for mediation is made in legislative form, it should be defined as a facilitative, consensual and confidential process, in which parties to the dispute select a neutral and independent third party to assist them in reaching a mutually acceptable negotiated agreement.

2.129          The Commission provisionally recommends that when provision for conciliation is made in legislative form, it should be defined as an advisory, consensual and confidential process, in which parties to the dispute select a neutral and independent third party to assist them in reaching a mutually acceptable negotiated agreement.

 

3         

CHAPTER 3            GENERAL PRINCIPLES and OBJECTIVES of ADR

A                  Introduction

3.01             ADR systems and schemes are usually established in an attempt to fulfil policy goals and objectives, which are in turn drawn from a set of main principles.[236] In Ireland, ADR processes such as mediation and conciliation already form part of many statutory codes, ranging from industrial relations to commercial litigation. These codes do not currently contain a set of basic principles which explain the operation of these ADR processes. The Commission agrees with the view that such principles are essential foundations to enable the full development and operation of ADR processes in the context of civil and commercial matters.[237]

3.02             In this chapter the Commission examines several of the main objectives and principles of ADR in particular in connection with mediation and conciliation. Part B explores the voluntary nature of ADR. Part C examines the principle of confidentiality. Part D considers the principles of self-determination and party empowerment. Part E discusses the objective of ensuring efficiency in ADR through the speedy and economical resolution of disputes. Part F sets out the principle of flexibility. Part G describes the principles of neutrality and impartiality in guaranteeing that the ADR processes are fair for all parties involved. Part H discusses the important objective of delivering and ADR system delivers a quality process to consumers. In Part I, the Commission summaries the objectives and principles which are contained in the Directive of the European Parliament and of the Council on Certain Aspects of Mediation in Civil and Commercial Matters.

 

B                  Voluntary Nature of ADR Processes

(1)                An Overview

3.03             The Commission considers that if mediation and conciliation are to become integral processes in the civil justice system, they must be approached on a voluntary basis. Voluntariness is exercised at each moment a party chooses to remain at the table, and is best validated by the approach that any party may withdraw from the process at any time they choose. Without this essential principle of voluntariness other underlying principles of ADR, notably, party empowerment, flexibility, and confidentiality cannot ensue.

3.04             The principle of voluntariness is, and has always been, fundamental to ADR processes. It has been included in various pieces of Irish legislation providing for mediation. For example, section 55(3) of the Health and Social Care Professionals Act 2005 states that “No attempt may be made to resolve a complaint by mediation or other informal means without the consent of the complainant and the registrant against whom the complaint was made.”[238]

3.05             From the outset, parties must be free to voluntarily choose the form of dispute resolution they wish to pursue. They must not be forced into mediation, for example, simply because they cannot afford another option.[239] As in many other settings, parties to a dispute should be educated on the full spectrum of ADR processes which are available to them to resolve their dispute.[240]

3.06             As ADR develops in this jurisdiction, a question has arisen as to whether a more compulsory element should be introduced into ADR processes. One reason for this is that experience suggests that there will always be a difficulty for disputants ‘taking the first step’ towards ADR as this may be perceived as a sign of weakness.[241]

3.07             In relation to mediation, those in favour of compulsion argue that mediation has a good success rate; that it could be compulsory subject to an opt-out, such as a court concluding that it is not appropriate in a particular case, and that nothing is lost by attempting it.[242] Furthermore, it is asserted that if a more compulsory form of mediation was introduced, such a step would ensure that greater numbers of litigants were compelled to experience ADR processes, thus, arguably speeding up the process of public and practitioner education about ADR.[243]

3.08             The contrasting view is that compulsion conflicts with the essence of mediation as a consensual process. Compelling parties into a process against their wishes would only increase costs and delays and it has been suggested that the rates of settlement in court-ordered mediation are much the same as when mediation is entirely voluntary.[244]

3.09             The Commission considers that there is an important distinction to be noted between mandatory attendance at an information session about ADR processes or at a mediation session and mandatory participation in an ADR process.

(2)                Forms of Referral to Mediation or Conciliation 

3.10             As with many aspects of ADR, the issue of “voluntary” or “compulsory” is not really an “either, or” choice but rather a matter of a gradual spectrum which depends on the form of referral.  Four variations of referral can be distinguished:

1. The parties themselves propose the idea for mediation or conciliation as an option;

2. The court encourages the parties to consider mediation or conciliation;

3. The court encourages the parties to consider mediation or conciliation and warns of the possible imposition of cost sanctions for an unreasonable refusal to consider ADR;

4. Access to court is denied, where mediation or conciliation has not first being attempted. [245]

3.11             These variations can be represented graphically as follows.

Parties Propose

ADR

 

http://www.bailii.org/ie/other/IELRC/2008/cp50(image8).gif

Judge Encourages ADR

 

http://www.bailii.org/ie/other/IELRC/2008/cp50(image8).gif

Judge Encourages ADR with Threat of Costs Sanction

 

 

Compulsory ADR

 

http://www.bailii.org/ie/other/IELRC/2008/cp50(image8).gif

 

http://www.bailii.org/ie/other/IELRC/2008/cp50(image9).gif

Voluntary                                                                                 Compulsory

3.12             On this spectrum, only in the case of variation 1 is there full voluntary referral, while only in variation 4 is there complete mandatory referral. Variation 2 is the most common form of referral in Ireland. Variation 3 puts more pressure on the parties to consider attempting ADR. The cost implications flowing from a failure to engage in ADR, especially where proposed by the court, may be said to go somewhat further than merely encouraging the parties to engage in the process but adds an element of compulsion.

3.13             In the following sections, various referral schemes operating in other jurisdictions are examined. The purpose of this examination is to provide an overview of the strengths and weaknesses of voluntary and compulsory schemes.

(3)                Party-Driven Mediation

3.14             Parties to a dispute are often in the best position to determine which dispute mechanism best meets their goals in achieving access to justice. As a result, one party, perhaps on the advice of their solicitor, may suggest mediation or conciliation prior to the commencement of litigation. The other party is entirely free to accept or reject this invitation.

3.15             As previously noted, Section 15 of the Civil Liability and Courts Act 2004 provides that mediation can only be initiated at the request of one of the parties to the action and not by the Court. Upon the request of one party, a court may then direct that the parties meet to discuss and attempt to settle the action in a ‘mediation conference’.[246]

3.16             If an element of compulsion is to be introduced into mediation or conciliation, a possible option would be that parties could initiate the process and compel the other party to attend either an ADR information session or a mediation/conciliation session. A model for this can be found in British Columbia’s Notice to Mediate initiative.

“The theory behind the notice to mediate approach is that cases partially self-select, so that they are more likely to be ripe for mediation. It is also a simple, inexpensive program that does not result in a sudden boost in demand for mediators.”[247]

(a)                British Columbia’s Notice to Mediate

3.17             In 1998 the British Columbia Attorney-General introduced the mandatory Notice to Mediate. The Notice to Mediate is a process by which one party to an action may compel all other parties in the action to mediate the matter(s) in dispute. “Rather than a court encouraging or mandating participation in mediation, a party who is presumably intimately familiar with the dispute and who has assessed the timing and appropriateness of mediation, compels the participation of the other parties in mediation.”[248]

3.18             The Notice to Mediate process was first introduced as a dispute resolution option for motor vehicle actions and came into force in April 1998.[249] From 1998 to 2002, the process was used in more than 6,000 actions. In approximately 74% of the actions mediated under the Notice, all issues were resolved. [250] An additional 10% of actions settled after delivery of a Notice, but before the mediation session.[251]

3.19             The party who wishes to initiate mediation delivers a Notice to Mediate to all other parties to the action. Within 10 days after the Notice to Mediate has been delivered to all parties, the parties must jointly agree upon and appoint a mediator. The mediation must occur within 60 days of the mediator's appointment, unless all parties agree in writing to a later date. If the parties themselves are unable to agree upon a mediator within 10 days, any party may apply to a roster organisation designated by the Attorney General to appoint the mediator. The British Columbia Mediator Roster Society maintains a list of trained and experienced mediators who have agreed to subscribe to a code of mediation conduct.[252] A mediation is considered concluded when:

·           all issues are resolved, or

·           the mediator determines that the process will not be productive and so advises the participants, or

·           the first mediation session is completed and there is no agreement to continue.[253]

3.20             Similar schemes were introduced in 1999 and 2000, for residential construction disputes[254] and all civil, non-family, Supreme Court of British Columbia actions,[255] respectively.

3.21             In 2007, a similar scheme was introduced on a pilot basis in family disputes.[256] This enables any party in a family dispute to require the other parties to attend a single mediation session, no earlier than 90 days after the filing of the first Statement of Defence in the proceeding, and no later than 90 days before the trial date. Once the Notice to Mediate is issued, the party being served with the notice must participate in mediation unless:

·           all parties have already had a mediation session on the issues in dispute;

·           one party has a family restraining order or peace bond against another party;

·           the mediator advises that mediation is not appropriate or would not be productive;

·           the court orders that one party is exempt from participating in the mediation process, because it would be impractical or unfair to require that party to attend; or

·           the parties agree in writing that one party does not have to participate in mediation, and the mediator confirms that in writing.[257]

3.22             Mediations held under a Notice to Mediate have the following characteristics: privacy; voluntary settlement; no decision-making authority invested in the mediator; no requirement to negotiate in good faith; no requirement to use a specified mediation model; the delivery of a Statement of Facts and Issues at least seven days before the mediation session; and the delivery of a Fee Declaration setting out the fees for the mediation and the agreement of the participants as to how the mediator’s fees will be apportioned.[258]

3.23             If a party refuses to attend a mediation, any party may file a Declaration of Default with the court. In this situation the court may exercise its discretion from a number of powers, including staying the action until the mediation occurs and making an order of costs against the defaulting party.[259]

(b)               Summary

3.24             The Commission considers that parties should be encouraged to propose mediation to the other side but should not have the power to compel an unwilling party to mediation. The Commission also considers that the Court plays a fundamental role in encouraging parties to attempt mediation in appropriate cases and to limit the option of referring the dispute to mediation to the parties themselves would overlook the important position of the Court to encourage the uptake of ADR.


(4)                Court-Annexed ADR Schemes

3.25             Several degrees of compulsion or encouragement to use ADR, notably mediation, can be established in schemes of court-annexed ADR. These include:

·         entirely voluntary, with the court limiting its role to encouragement and the provision of information and facilities;

·         made mandatory by a statutory or court rule for all cases in a defined class.

(a)                ADR is entirely voluntary, with the court limiting its role to encouragement and the provision of information and facilities.

3.26             In this version of court-annexed ADR, mediation or conciliation is encouraged by the Courts. However, parties are free to accept or reject the Court’s recommendation to consider or attempt ADR without any threat of a sanction, such as refusing costs to a party.

3.27             It can be argued that this version of court-annexed ADR mirrors current arrangements in Ireland. This is because cost sanctions have yet to be imposed for an unreasonable refusal to consider or attempt ADR.  The Irish Courts are increasingly encouraging parties to a dispute to consider ADR where they think it is appropriate.[260] For example, in Charlton v Kenny a dispute over land ownership between neighbours, Harding Clark J encouraged both sides to explore the possibility of mediation.[261] The parties agreed to suspend legal proceedings and to engage in a mediated intervention in an effort to resolve their dispute. The parties successfully mediated the dispute after a 10-hour mediation process and arrived at a mutually acceptable agreement.

3.28             However, there is currently no voluntary mediation or conciliation pilot operating in conjunction with any Court or the Courts Service. Parties may attempt mediation with private mediators. Furthermore, no information sessions about ADR are offered to or are available for disputants. The following sections explore some voluntary mediation and conciliation schemes which have been established in other jurisdictions.


(i)                 Small Claims Mediation Pilot Schemes in England and Wales

3.29             In 2006, the UK Department of Constitutional Affairs (DCA)[262] published research reports into three small claims mediation pilot schemes at Exeter, Manchester and Reading County Courts (the equivalent of the Circuit Court in Ireland). Each pilot scheme used a slightly different model:

·           In Exeter, solicitors who were also qualified as mediators offered free 30 minute mediation appointments to litigants referred by District Judges.[263]

·           In Manchester, a full time salaried mediation officer was available in court to give information and advice about mediation, and to provide free one hour face-to-face mediations to small claims parties. After the start of the pilot period he began to offer telephone mediation as well, which proved very popular.[264]

·           The Reading pilot focused on giving advice and information about the small claims process to unrepresented litigants, with a ‘by-product’ of facilitating some settlement negotiations. The scheme has since been discontinued.

3.30             The DCA concluded that the service offered at the Manchester pilot had achieved a higher rate of settlement relative to the other court-based mediation services (86%) and that parties who used the mediation service expressed high levels of satisfaction with the service and the mediation officer (93%).[265] The research also highlighted that the mediator had independently developed telephone mediations to address the needs of parties who were based a considerable distance away from the Manchester area. The use of telephone mediation to deal with cases without the need for a judicial hearing significantly increased the take up by parties wishing to use the service. In 2007, it was reported that telephone mediations accounted for over 70% of all mediation dealt with by the mediator.[266]

3.31             There were several ways for court users to gain access to the small claims mediation service: self-referral, judicial referral, and external referral, through for example, citizens advice bureaux.[267]

3.32             Under the pilot scheme, a leaflet explaining the small claims mediation procedure was sent or given to all claimants issuing claims at the County Court. It contained a tear-off reply slip allowing a party to state whether they were interested in using the small claims mediation. This was also sent to both parties when they were sent an allocation questionnaire. If one or both parties completed the slip, it was attached to the issue documents and, after allocation to the small claims track, the case was referred to the mediation officer. In such cases the District Judge issued one of the following judicial directions:

SC7 – “Upon all the parties having indicated they wish to engage in mediation, it is directed that the case be referred to the Court Mediator for the mediation to be arranged.”  

SC8 – “Note for Court Staff. Some but not all parties have indicated they wish to engage in mediation. Please notify the Court Mediator of the case.”

3.33             If neither party completed the slip, the District Judge could refer the case to mediation at the allocation stage by issuing the following judicial direction:

SC9 – “The judge has considered your case is suitable for mediation and you are therefore invited to use the free Small Claims Mediation Service. The Court Mediator will be notified of your case.” [268]

3.34             If a case was referred to mediation and one or both parties declined, the mediation officer placed a note on the court file indicating to the judge that mediation had been offered but had not taken place. No further information was provided to the judge.[269]

3.35             The success of the Manchester pilot scheme led to its introduction across England and Wales during 2008.[270]

(ii)               Edinburgh Sheriff Court

3.36             The majority of litigation in Scotland is conducted in the Sheriff Court. An in-court advice service was introduced at Edinburgh Sheriff Court in 1997, and a mediation service was formally linked with it in 1998. The in-court advice service provides advice to unrepresented litigants involved in small claims, summary cause, housing and debt cases. Since 2008, the Service is available up to a threshold of £5,000.

3.37             Where the in-court adviser identifies a case, at any stage of the court process, which may be suitable for mediation, that client is referred to the mediation service. In many cases the adviser is able to refer them to the mediation service before the court process even begins.[271] The mediation project offered arms-length negotiation, as well as face-to-face mediation; both procedures were used by approximately equal numbers of clients.[272]

3.38             The mediation pilot was examined in a 2002 report.[273] Data was collected from the project’s client records; in addition, interviews were held with project workers, sheriffs and sheriff court employees, solicitors, representatives of advice agencies and mediation clients.

3.39             In the 9 month period that was examined, 151 cases were referred to the mediation project. Of these, 99 were referred by the in-court advice project, 18 were referred by the mediation coordinator, 15 were referred by the Citizens Advice Bureaux and 5 were referred by the Court Sheriff. The majority of cases (16 out of 23) involved small claims litigants.[274] More than half of parties referred agreed to take up mediation, but in only half of these cases did the second party agree to mediate. Of the 151 cases referred during the research period a settlement was successfully negotiated by the mediation coordinator in 21 cases, and a mediated settlement was reached in 20 cases out of the 22 that went to mediation.[275]

3.40             Turning to the procedure used in the ongoing mediation service, a mediation co-ordinator attends the relevant weekly Court hearing at which a Sheriff may recommend mediation to litigants. It is not compulsory for the parties to accept the recommendation, but the majority do. The Sheriff Clerk (a court officer) then assigns dates for the mediation and for the next Court hearing. These have been provided in advance by the co-ordinator. The mediation co-ordinator then takes over the management of the case. If a settlement agreement is reached at mediation, the mediation co-ordinator arranges for any further Court proceedings to be dismissed in the absence of the parties.[276]

3.41             From September 2006 to August 2007, 98 cases were referred to the mediation service. Of those, 18 did not proceed to mediation. Reasons for this include one party withdrawing from the process or the case being settled prior to the mediation. Of the 68 cases that went through the mediation process, 53 cases (78%) were resolved. Mediations lasted an average of 1.8 hours. The average time from referral by a Sheriff to a mediation meeting was 21 days. The average time from referral to closing of the mediation file was 19.6 days.[277]

3.42             The Scottish Executive is the sole funder of the mediation service. In the financial year 2006/2007 it provided £25,571 for the service.[278] This allows for a part-time Mediation Co-ordinator (20 hours per week) but not for payment of mediators. The Service is financially viable only because of the willingness of volunteer mediators. The Scottish Courts Service provides two purpose-built mediation rooms and the Mediation Co-ordinator works out of the Citizens Advice Bureau office in the court building. [279]

3.43             Following on from the success of the Edinburgh Sheriff Court in-court advice service, further in-court advice services were established in Aberdeen, Airdrie, Dundee, Hamilton and Kilmarnock in 2002 and 2003.[280]

(iii)              The Netherlands

3.44             The Dutch civil justice system has a long-standing tradition of informal resolution of civil disputes. More recently, the Netherlands has developed a mediation project on a pilot basis, slowly expanding to incorporate a larger number of courts. In court-annexed mediation in the Netherlands, mediation sessions are coordinated by a non-judge coordinator. Parties choose a mediator from the court’s register and mediations proceed at a specified date. As mediation in the Netherlands is entirely voluntary, judges do not refer cases to mediation, but are able to explain to parties the extent of their options and the advantages of pursuing ADR.[281]

3.45             In 2000, the Netherlands introduced a project entitled Court-connected Mediation in the Netherlands. Its aim was to examine whether a permanent system of referral to mediation was justified within the judicial infrastructure and how this could be organised most effectively. The project was carried out in five district courts (Amsterdam, Arnhem, Assen, Utrecht and Zwolle) and one court of appeal.

3.46             Various methods of referral were prepared and tested in the project:

·           Oral referral by the judge at the hearing;

·           Written referral on a selective or non-selective basis:

o    Selective : cases were chosen on the basis of file selection and parties were sent a customised letter offering them mediation

o    Non-selective : parties were approached on the basis of a random sample and asked by letter to consider mediation, including a simple self test in which they could assess the advantages and disadvantages of mediation in their specific case compared with litigation;  

·           Self-referral: besides referral by a member of the judiciary, it was also possible for the parties themselves to opt for mediation on their own initiative.

3.47             In 2003, the Dutch Ministry of Justice published a report on the project. The survey findings confirm that a permanent system of referral to mediation within the judicial infrastructure was warranted.[282]

3.48             The research found that referral by means of a written invitation at an early stage of the proceedings was more efficient than referral at the hearing. This was because those who responded to a written proposal opted voluntarily for mediation entirely of their own choice and were more committed to the process.[283] In addition, the dispute was still reasonably undeveloped and the positions of the parties were therefore less entrenched.[284] A specific case-related invitation with a self-assessment test (person-oriented, with questions about personal motives) was found to have the best chance of success, with acceptance rates of between 10% and 40%.[285]

3.49             In a separate study it was found that mediation could be successfully used at any point in the life of a case. This indicated that there is no point at which referral seems to yield significantly higher settlement rates. Similarly, the study reported that no single case or group of cases settled more easily than others through mediation.[286]

3.50             Since the conclusion of the evaluation, steps have been taken towards the full implementation of a referral facility in all courts in the Netherlands. Each court now has one or more mediation officers. The mediation officer acts as adviser for all internal and external parties involved in mediation. In addition, he or she plays an important role in monitoring the quality of mediation. The mediation officer is therefore the liaison officer for the judge in referring cases. The mediation officer also liaises with the mediators. The duties of a mediation officer in referrals can be summarised as follows: providing information to those concerned, submitting a list of mediators from which the parties may choose, arranging the first appointment, monitoring the progress of the mediation and ensuring that the financial and administrative aspects are arranged.

3.51             In all Dutch courts judges have been provided with training to select cases for referral to mediation. They learn how to investigate whether the parties have a so-called success-predicting motivation that is likely to lead to an effective and success-promising choice for mediation.[287]

3.52             In 2005, a Dutch judge cited a 61% settlement rate for court-annexed mediation. She stated that almost 1,000 cases had been referred to mediation, of which 89% had completed the terms of the mediated settlement within three months. She stated that a typical case required an average of 6.3 hours of mediation. She also suggested that 50% of civil cases could be settled via mediation, reducing case backlogs and increasing the settlement capacity of judges.[288]

(iv)              Slovenia

3.53             In 2001, the District Court in Ljubljana, which is the biggest court in the Republic of Slovenia, launched a pilot programme for the reduction of court backlogs. The programme introduced court-annexed mediation in civil cases and a Department for Alternative Dispute Resolution (DADR) was established. In 2002, a mediation programme was established for family law cases and since 2003 a programme for commercial mediations is available. All the programmes are voluntary and both parties must consent to mediation. The pilot programmes have since become permanent features of the court system.

3.54             The main objectives of the court-annexed mediation programme were to:

·           to offer parties additional dispute resolution mechanisms and thus increase access to justice;

·           to offer the possibility of faster and cheaper dispute resolution;

·           to allow the parties a greater influence on the procedure and the contents of the dispute resolution.[289]

3.55             The DADR sends parties a brochure with information on the programmes which are available along with a consent form. Where parties consent to participate in mediation, DADR selects a mediator from the list of mediators and appoints him or her to mediate the case. The DADR then summons the parties, and the Court guarantees that, in civil disputes, the first mediation session will be held within 3 months, in commercial disputes in 2 months, and in family cases within 14 days of the receipt of all consents. Mediation sessions are held in the court premises, and they involve 2 sessions which last for 1.5 hours each.[290] Cases resolved in mediation account for 5 to 6% of the total amount of litigation.[291] In 2007, the District Court carried out between 30 to 50 mediation sessions a week.

3.56             The mediators who participate in the mediation programmes include Supreme, Higher and District Court judges as well as the Deputy Human Rights Ombudsman. All carry out the mediations free of charge in addition to their regular work. Retired judges and members of the legal profession also mediate on a contract basis. To be included on the Court’s list of mediators, each person must undergo specialised training in the field of ADR.[292]


(b)               ADR is made mandatory by a statutory or court rule for all cases in a defined class

3.57             In situations where mediation is mandated, for example, by a court or a statute, the principle of voluntariness remains because even where participation in the process is required, continued participation is not. Parties are free to withdraw from the process at any time they choose.

(i)                 Ontario Mandatory Mediation Program (OMMP)

3.58             At about the same time as the Woolf Review was initiated in England and Wales, in the early 1990’s the government of Ontario commissioned a Civil Justice Review which sought to enhance access to justice for litigants by attempting to stem the increasing costs in the system, in addition to helping to end the huge backlog in cases going before the courts.[293] In 1995, the First Report of the Civil Justice Review in Ontario set out the following ‘benchmarks’ for a civil justice system: fairness, affordability, accessibility, timeliness, accountability, efficiency and cost-effectiveness together with a streamlined process and administration.[294] It likewise proposed that the concept of court-connected mediation be accepted “in principle”.[295] These mirror the Woolf Report principles.

3.59             The Ontario Civil Justice Review proposals were implemented by the 1999 Rules of Civil Procedure made under the Courts of Justice Act 1990.[296] The Rules included the Civil Justice Review Committee recommendation “that there be mandatory referral of all non-family cases to a three-hour mediation session, to be held following the delivery of the first statement of defence, with a provision for ‘opting out’ only upon leave of a Judge or Case Management Master”[297] who may grant an exemption order at their discretion.

3.60             The 1999 Rules of Civil Procedure introduced on a test basis a common set of rules and procedures mandating mediation for case-managed, civil, non-family actions in the Ontario Superior Court of Justice in Ottawa and Toronto. Under the OMMP, cases are referred to a mediation session early in the litigation process to give parties an opportunity to discuss the issues in dispute.[298] Of the cases referred in Toronto, there was a settlement rate of approximately 40%, with a further 17% resulting in partial settlement.[299]

3.61             In 2001, Ontario established a pilot project for Toronto and the Ottawa regions to require early mandatory mediation in 100% of case managed civil actions. This change led to approximately 18,000 extra cases initiated per year in Toronto being placed under case management and also subject to mandatory mediation.[300] Members of the legal profession and the judiciary raised numerous concerns as to the evident rising costs associated with the introduction of a new procedural step requiring disputants to attempt mediation at an early stage in the litigation.[301]

3.62             As a result, in 2004 a practice direction[302] which outlined radical changes to the case management system directed that the 100% rule would no longer apply but that “mediation will continue to be mandatory. Parties are expected to conduct mediation at the earliest stage in the proceeding at which it is likely to be effective, and in any event, no later than 90 days after the action is set down for trial by any party.” The explanation provided for abolishing early mandatory mediations in Toronto provided by the practice note is as follows:

“The bench and bar are concerned about serious delays in the civil justice system in Toronto. Waiting times to obtain dates for both interlocutory motions and trials are unacceptably long and growing. Concern has also been expressed about rising costs occasioned by the increasing number of formal steps and appearances which must be undertaken (particularly at the early stages) and the decreasing ability of counsel and parties to determine on a case-by-case basis how and when to move their cases along.”

3.63             The practical effect of this change was that not all cases were any longer automatically referred to case management, rather only those which were complex enough to require it. Thus parties were free to determine the timing of the mediation, but were nonetheless expected to conduct it at some point before trial.

(ii)               Germany

3.64             The German Federal Parliament has enacted a series of laws which provide for the establishment of both voluntary and mandatory court-related ADR. [303] Since 2000, all German states may (but do not have to) introduce mandatory court-connected mediation for certain kinds of civil disputes as part of their Civil Procedure Codes. These serve two primary goals, firstly, to promote the practice of mediation as a dispute resolution method among lawyers and disputants and, secondly, to reduce dramatically the case load at magistrate court level.[304] To qualify for mandatory mediation, the disputes must fall into one of three categories. They must be either be:

·           financial disputes before the Magistrates Court up to a value of €750;

·           certain neighbourhood disputes; or

·           disputes where any alleged defamation has not occurred through the media.

3.65             State parliaments in Germany may introduce legislate to require participation in mediation in these cases as a prerequisite to initiating court proceedings.  The so-called “experimentation clause” aims to encourage different models in the different Germans states with respect to ADR schemes.[305]


(iii)              New South Wales

3.66             The Civil Procedure Act 2005 (NSW) permits the Supreme Court at any stage of the proceedings to refer parties to mediation.[306] This power does not depend on the consent of the parties nor is it the intention of the Court that mediation will be ordered in all proceedings.[307] Initially there was a general acceptance of the view adopted by Barrett J in Morrow v Chinadotcom Corp.[308] that there was no point in a mediation engaged in by a reluctant party. In a frequently cited passage from Remuneration Planning Corp Pty Ltd v Fitton[309] the NSW Supreme Court held, however,

“since the power was conferred upon the Court, there have been a number of instances in which mediation have succeeded, which have been ordered over opposition, or consented to by the parties...it has become plain that that there are circumstances in which parties insist on taking the stance that they will not go to mediation, perhaps from a fear that to show willingness to do so may appear a sign of weakness, yet engage in successful mediation when mediation is ordered.”

(5)                Voluntary Schemes v Compulsory Schemes & the Impact of Costs Sanctions: England & Wales

3.67             In 2007, the Ministry of Justice for England and Wales published a report entitled Twisting arms: court referred and court linked mediation under judicial pressure.[310] This report evaluated two mediation programmes in Central London County: a voluntary mediation scheme which had been operating in the court since 1996 and an experiment in quasi-compulsory mediation which ran in the court between April 2004 and March 2005.  

3.68             Since 1998, the voluntary mediation scheme in central London operates on the basis that information about the mediation scheme is sent to both parties once a defence has been received by the court. This again emphasises the importance of educating parties about the alternative processes which are available to them for the resolution of their dispute. The decision as to whether to use the scheme is entirely voluntary. If both parties agree to opt for mediation, the court fee is £100 per party: this covers a 3 hour mediation session in mediation rooms on the court premises which is held after the end of normal court business.

3.69             The Automatic Referral to Mediation (ARM) pilot involved early random allocation by the court to mediation of 100 defended cases per month[311]  with an opportunity to opt out. [312] Thus for the first time England had in effect introduced a quasi-compulsory[313] form of mediation by which cases were automatically referred to mediation. Following any objection to mediation, the case was to be reviewed by a District Court Judge who had the authority to impose cost sanctions under the Civil Procedure Rules if he or she did not reasonably believe the rejection to be objectively justified. The ARM pilot was inspired by the Ontario mandatory mediation programme. Some of the main findings of the report are summarised below.

(i)                 Low Uptake in Voluntary Mediation Scheme without a Threat of Costs Sanctions

3.70             Between 1996 and 1998, parties were being offered the opportunity to mediate on a voluntary basis. Post-Woolf Civil Procedure Rules had not yet come into effect so no sanction would be imposed against parties who refused to mediate. The 2007 Report stated that in the immediate period after the end of the successful pilot and the establishment of a permanent VOL mediation scheme at Central London, demand for the scheme showed a modest increase up to about 103 cases in 2000, and then a fall in demand to 68 in 2001.[314]

3.71             However, following the landmark Court of Appeal decisions in Cowl v Plymouth City Council[315]and Dunnett v Railtrack plc[316] demand began to rise steeply, so that in 2005 368 cases entered the scheme of which 333 were actually mediated during the year.[317] It appears that, faced with the possibility of cost sanctions for an unreasonable refusal to mediate, parties were more inclined to attempt mediation.

3.72             http://www.bailii.org/ie/other/IELRC/2008/cp50(image10).jpg
Cases entering the VOL mediation scheme 1996-2005 in relation to key policy milestones.[318]

 

3.73             As noted in the 2007 Report,

“It is reasonable to infer that this steep increase in the number of cases entering the scheme can be largely attributed to judicial policy as expressed in the Dunnett case. Evidently, the decision had the desired effect in encouraging or frightening litigants and their lawyers into experimenting with the VOL mediation scheme. Demand prior to Cowl and Dunnett was certainly showing only a modest increase from a low base, and in 2001, the demand was actually beginning to fall.”[319]

(ii)               Higher Uptake of Voluntary Mediation with Threat of Cost Sanctions, but Lower Settlement Rates.

3.74             Despite the significant increase in the uptake of the VOL mediation scheme, there has been a relatively steady decline in the success rate, in terms of the number of cases settled at the end of the first or second mediation attempt. In the period 1996–1998, the settlement rate was steady at around 62%, but it fell to 44% in 2000 and to a low of 39% in 2003. In 2004 and 2005, the rate appeared to have recovered to 45% and 43%, respectively, but since 1998, it has not been above 50%.[320]

3.75            

http://www.bailii.org/ie/other/IELRC/2008/cp50(image11).jpg


Settlement rate 1996-2005 in VOL mediation scheme (Base = 1,348 mediated cases).[321]

 

3.76             A possible explanation given in the report for the decreasing settlement rate in the VOL scheme is the changed policy environment in which VOL mediations have been taking place. “If judges have been directly pressing parties into mediation, or if parties are unwillingly accepting opponents’ offers to mediate in order to avoid potential costs sanctions, this may be having a depressing effect on the scheme’s settlement rate.”[322]

3.77             Evidence from evaluations of court-based mediation schemes in Exeter, Guildford and Birmingham support this conclusion. In Birmingham, a purely voluntary scheme enjoyed a 60% settlement rate during the period 1999-2004. [323] In Guildford, the settlement rate for the voluntary scheme was 53% between 2003 and 2004.[324] In the same court, some cases were selectively referred to mediation by the judiciary and among those cases, the settlement rate at mediation was as high as 75%. By contrast, in Exeter, where the judiciary exerted considerable pressure to mediate, the settlement rate was about 40% and only 30% for cases that had been judicially referred. The author of the evaluation suggests that the explanation for the lower settlement rate at Exeter, as compared with Guildford, might be an “over-enthusiasm for mediation” which led to cases being referred that were more complex and, therefore, unlikely to settle at time-limited mediations.[325]

3.78             The Commission concurs with the view that a policy of judicial pressure to mediate, accompanied by the threat of sanctions, is capable of propelling cases into mediation in a manner that is not necessarily particularly effective in terms of settlement rates. It is possible that such pressure has drawn in unwilling parties who have participated through fear of costs’ penalties rather than a desire to negotiate toward settlement.[326] The rate of settlements is important because unsettled mediations may actually increase costs and lead to delays, something that mediation is intended to reduce.

3.79             It is clear from the findings in the 2007 Report that a genuine willingness to enter the process and motivation to settle is one of the most important factors in determining outcome.[327] It is evident to the Commission, therefore, that the voluntary nature of mediation is vital to its success.

(iii)              Compulsory Mediation Not Entirely Successful

3.80             The broad figures from the ARM experiment suggest to the Commission that quasi-compulsion in the London context has not been particularly successful. The overall opt-out rate began at around 80% and, although there was some reduction in the number of objections in the last third of the pilot, nonetheless by the end of the pilot only a minority of cases had been mediated.

3.81             During the ARM pilot, 1,232 defended civil cases were randomly referred to mediation, of which 82% were personal injury cases. By the end of the evaluation (10 months after termination of the pilot), only 22% of ARM cases had a mediation appointment booked and 172 cases (14%) of those originally referred to mediation – had been mediated. There was a high rate of objection to automatic referral throughout the pilot scheme. In 81% of cases where the court received a reply, one or both parties had objected to the referral, although after the first few months there was a slight decline in the number of cases in which both parties objected.[328]

3.82             Of the cases actually mediated under the ARM pilot scheme, the settlement rate over the course of the year followed a broadly downward trend, from a high of 69% among cases referred in May 2004 to a low of just below 38% for cases referred in March 2005. The average over the year was 53% with a handful settling within 14 days of the mediation session. Where neither party objected to mediation the settlement rate was 55%. Where both parties originally objected to mediation, but were then persuaded to go ahead with mediation, the settlement rate was lower at 48%. The majority of cases referred to mediation under the ARM scheme concluded by means of an out-of- court settlement, without ever going to mediation, although among those cases involved in objections hearings, a higher proportion continued to trial.[329]

3.83             The most common reasons for objecting to mediation, given by both defendants and claimants, were that:

·           the case would settle anyway;

·           that more evidence was needed;

·           that judgment was necessary;

·           that liability was in dispute, or that liability was not in dispute.[330]

3.84             The majority of case management conferences where a District Judge sought to persuade objecting parties to change their minds did not result in mediation bookings and tended to introduce delay into the processing of cases.[331]

3.85             In the Commission’s view the evidence from the ARM schemes suggests that facilitation and encouragement together with selective and appropriate pressure are likely to be more effective and possibly efficient than a blanket coercion to mediate.

3.86             It is also worth noting the views of mediators in the UK which were surveyed by Centre for Effective Dispute Resolution (CEDR) in its most recent audit in 2007. CEDR found that mediators strongly (67.5%) favoured the civil justice system taking a more directive approach towards the promotion of mediation, but only 10.3% went so far as to support a fully mandatory system.  Lawyers also support change, albeit less strongly - 56% favour a more directive approach (as compared to only 41% in 2005), with 8% favouring a fully mandatory system. However, mediators continued to be opposed to a Mediation Act (60% v 17% with 23% undecided), a strength of feeling which has hardened since 2005 (when only 46% were opposed, 23% in favour, and 31% undecided).[332]

(iv)              Willingness of Parties to Negotiate is Crucial to Successful Mediation

3.87             In the 2007 Ministry of Justice Report on the ARMS scheme, mediators thought that key factors contributing to ARM settlement were:

·           the willingness of the parties to negotiate and compromise;

·           the contribution of legal representatives

·           their own skill as mediators; and

·           administrative support from the court.[333]

3.88             The significance of the parties’ willingness to negotiate and compromise as an explanation both for success and for failure in mediation sits uncomfortably with the evident support shown by some mediation organisations for experimenting with compulsory mediation.[334]

3.89             Interviewees who felt that they had been compelled to attend unsuccessful mediations frequently expressed discontent about the ARM scheme, arguing that bringing unwilling parties to the mediation table was inappropriate and costly. In almost every interview with representatives involved in unsettled mediations, the view was that the mediation had increased the legal costs of the case, on average by around £1,000 to £2,000.[335] Explanations for failure to settle ARM cases at mediation include:

·           the parties’ unwillingness to compromise having been pressed into mediation;

·           lack of understanding by the legal representatives of the mediation process;

·           there were also concerns about mediations occurring too early,

·           the influence of legal aid and other costs indemnities reducing pressure to settle;

·           the constraint of 3-hour mediations; and

·           the uncomfortable facilities provided for mediation at the court.[336]

3.90             The research has, in the Commission’s view, shown that if mediation is mandatory, parties will of course use it, especially if they face a penalty when they bring a case to trial without having tried mediation first. Thus, first effect of compulsory mediation is that it receives a higher uptake than voluntary mediation. There second effect is, however, a declining success rate. The Commission agrees with the view that if parties are forced to engage in mediation, that does not in itself provide them with the right mindset to work towards negotiated and mutually satisfactory settlements.[337]

(6)                Conclusion

3.91             It is evident to the Commission from the various schemes discussed that voluntary court-annexed schemes are successful for the resolution of disputes, particularly for small claims cases. Many of the schemes have evolved from Court- driven initiatives as opposed to legislative initiatives.

3.92             The Commission provisionally recommends that, in civil claims generally, courts should be permitted, either on their own motion initiative or at the request of a party to such claims, to make an order requiring the parties to consider resolving their differences by mediation or conciliation.

3.93             A recurring theme in each of the voluntary schemes is the important role which information and education plays in the successful uptake of the schemes. In Manchester, Edinburgh, the Netherlands, and Slovenia, in-court advice on ADR and the processes which are available to the parties have been the catalyst in the development of the schemes.[338] The Commission considers that, for ADR to develop as a workable dispute resolution option within the court system in Ireland, it may be appropriate to mandate that parties to a dispute attend an information session on ADR.

3.94             The Commission considers that a court-annexed scheme would make engagement in the mediation process procedurally mandatory in that the Court should have the power to recommend mediation and to impose cost sanctions if the parties unreasonable refuse to consider attempting mediation.[339] Such procedural requirements are consistent with the concept that court-annexed mediation should remain a wholly consensual process.[340]

3.95             The Commission provisionally recommends that the participation of parties in mediation should be voluntary and that the mediator should play no advisory or evaluative role in the outcome of the process, but may advise on or determine the process.

3.96             The Commission provisionally recommends the participation of parties in conciliation should be voluntary and that the conciliator should not have the authority to impose on the parties a solution to the dispute but may make recommendations to the parties for the settlement of the dispute, which the parties may or may not accept.

3.97             In the Commission’s view voluntary court-annexed schemes would be a positive development in Ireland. As the uptake for purely voluntary mediations is generally low however, judicial encouragement of mediation would be necessary for the successful implementation of such a pilot.

3.98             The Commission provisionally recommends that a pilot Court-annexed mediation scheme should be established in the District Court based on the principles of the voluntary participation of the litigants.

C                  Confidentiality

(1)                Protection of Confidentiality: An Overview

3.99             As noted in the EU Green Paper on ADR “Confidentiality appears to be the key to the success of ADR because it helps guarantee the frankness of the parties and the sincerity of the communications exchanged in the course of the procedure.”[341] The primary reason for protecting confidentiality in ADR is to enhance trust both in the neutral third party and in the ADR process itself. “The fundamental principle has always been regarded as being that a mediation should be a safe haven, where the parties benefit from the privacy it affords, as it gives them the chance to behave in ways which they would not adopt if they were in any sense ‘on the record’ in doing so.”[342]

3.100          Confidentiality operates on two levels. First the process should be confidential as between the participants, preventing third party knowledge of the dispute of any attempt to settle it, and also in terms of all matters disclosed in the process. Secondly, matters discussed between one party and the neutral third party in private sessions should be confidential between them and may not be disclosed to any other party without express consent.[343] During the debates on the Civil Liability and Courts Act 2004 it was noted that “It is vital in mediation that the confidentiality of all parties is respected, otherwise people will just be defensive and will stand their ground.”[344]

3.101          One of the most common legal mechanisms used to ensure confidentiality in mediation and conciliation is a confidentiality clause in an agreement made prior to entering the process In addition to contractual protections of confidentiality, the common law has also recognised to some extent the need to protect the confidentiality of mediation and conciliation. Some protection for confidentiality in mediation can also be found in, for example, section 15(5) of the Civil Liability and Courts Act 2004 which provides that the notes of a chairman of a mediation conference and all communications during a mediation conference or any records or other evidence shall be confidential.[345] The Commission now turns to examine the different ways in which confidentiality is currently protected.

(2)                Agreement Guaranteeing Confidentiality

3.102          Standard agreements frequently contain confidentiality provisions and have the benefit of eliminating uncertainty about the existence and scope of confidentiality protections.[346] For example, the Family Mediation Service Mediation Agreement states:

“It has been a precondition of the mediator assisting us that the mediation sessions have been conducted without prejudice and that any information disclosed by either of us in our negotiations with each other is confidential.”[347]

3.103          When parties enter into such an agreement they are thus contractually obliged to preserve the confidentiality of the process.

(3)                 ‘Without Prejudice’ Communications

3.104          Irish law provides for the concept of “without prejudice” negotiations, which means that oral and written statements made on a “without prejudice” basis during negotiations towards the settlement of a dispute are inadmissible in subsequent court proceedings relating to the same subject matter. It is fundamental to the operation of the “without prejudice” rule that communications expressed to be “without prejudice” are made for the purposes of settling the dispute, since the courts will not find the privilege to relate to communications which have a different purpose.[348]

3.105          The “without prejudice” rule is founded upon the public policy of encouraging litigants to settle their differences rather than litigate them to a finish.[349] As Keane J explained in Greencore Group plc v Murphy[350] it is in the public interest that:

“Parties should be encouraged as far as possible to settle their disputes without recourse to litigation and should not be discouraged by the knowledge that anything that is said in the course of negotiations may be used in the course of proceedings.”[351]

3.106          Similarly, in the English Court of Appeal decision in Cutts v Head,[352] Oliver LJ stated that parties who are trying to settle their dispute:

“… should not be discouraged by the knowledge that anything that is said in the course of such negotiations (and that includes … as much the failure to reply to an offer as an actual reply) may be used to their prejudice in the course of the proceedings. They should … be encouraged fully and frankly to put their cards on the table …. The public policy justification, in truth, essentially rests on the desirability of preventing statements or offers made in the course of negotiations for settlement being brought before the court of trial as admissions on the question of liability.”

3.107          In the Australian case of AWA Ltd v Daniels[353] Rolfe J stated that mediation is somewhat analogous to “without prejudice” discussions. Express or implied admissions made in the course of a mediation cannot be disclosed.

3.108          In Instance v Denny Bros Printing[354] the English Court of Appeal reinforced the “without prejudice” status of mediation negotiations. The Court held that communications made in a mediation which did not settle an earlier dispute extended to later litigation connected with the same subject-matter.

(a)                Exceptions to ‘Without Prejudice’ Privilege

3.109          There are a number of exceptions to the “without prejudice” privilege at common law. The Commission now turns to the relevant guiding principles in this area.

(i)                 Unambiguous impropriety

3.110          In Unilever plc v Proctor & Gamble Co[355], Laddie J outlined some circumstances where without prejudice negotiations, which would otherwise be privileged, can be disclosed.  The first is where the entitlement to rely on the privilege may be treated as waived.  Secondly a court may come to the conclusion that the claim to without prejudice status is not bona fide.  Laddie J cited with approval the dicta of Hoffmann LJ in Forster v Friedland[356] that “whatever the parties may stipulate the rule covers only those communications which are genuinely aimed at a settlement to avoid litigation.” Thirdly, Laddie J stated that there are occasions where, even though the parties treated the negotiations as being without prejudice, the Court refuses to allow the claimed privilege where “the protection afforded by the rule had been unequivocally abused.” 

3.111          It was then noted that any further exceptions should not be encouraged, particularly when an important ingredient of the Woolf civil justice reforms were to encourage those who were in dispute to engage in frank discussions before they resorted to litigation.[357]

(ii)               Threats

3.112          In Venture Investment Placement Ltd v Hall[358] the Court was faced with the question was whether something said during mediation, alleged to amount to threats, could override the confidentiality created by the mediation agreement. The English High Court answered no, and it restrained Mr Hall from referring to or disclosing any part of the discussion that took place during the mediation on the basis that any such threat essentially involved a question of defamation.

(iii)              To prove the existence of a concluded agreement

3.113          If there is a dispute as to whether or not there has been a settlement, it may be necessary to look to the detail of the mediation or negotiation to determine the terms of that settlement.[359] In Brown v Rice & Patel[360] the plaintiff asserted that, during a mediation, the defendant had bound herself to leave open defined settlement terms for acceptance until noon the following day, and that he had accepted them before the deadline. The defendants both denied that any such agreement had been duly concluded within the mediation.

3.114          The defendants argued that the court should not hear evidence as to whether there was a concluded agreement because:

·           a form of overall mediation privilege exists to prevent such an investigation;

·           the only exception to the without prejudice rule applicable to mediations is the unambiguous impropriety rule;

·           the fact that the mediation agreement provided that no binding settlement agreement could be reached unless in writing and signed removed the court's power to investigate whether settlement had been reached; and

·           contractual mediation confidentiality prevented admissibility.

3.115          Having concluded that the conventional “without prejudice” rule applied to the situation, the court held that communications during the mediation process, which were to be construed as “without prejudice”, could be admitted in evidence in order to determine whether a binding settlement had been concluded.

3.116          The court admitted evidence of offers made at the mediation by each side, including: content of a meeting at the mediation in which the deadline was allegedly set; the mediator's own note about the offers; subsequent e-mail correspondence between the mediator and the parties; and inter-party correspondence about whether or not agreement had been reached. On that evidence, the judge concluded that a settlement offer had been made but it was incomplete as it did not deal with the manner of disposal of the proceedings. The decision in the Brown case indicates that it is only in specified and clear circumstances that the court will seek to examine the conduct of the mediation and communications made during it. The Court recognised that those exceptions to the without prejudice rule should be "kept within close confines."[361]

(iv)              Evidence of Legal Rights.

3.117          Where settlement negotiation communications disclose evidence of legal entitlement,[362] that information is admissible as evidence both as between the parties[363]and as between a party and a third party.[364] This does not extend to evidence of waiver of a right, being restricted to proof of existing rights, so that the veil remained intact in respect of an alleged reaffirmation of liability that was otherwise statute barred.[365] Evidence of a fact, for instance that someone had written and signed a document, not related to the terms of the settlement are admissible.[366] In Munt v Beasley[367] notes of mediation proceedings were used as evidence to establish that a landlord had, contrary, to the express terms of a lease included the use of a loft as part of the tenancy.

(v)                Waiver

3.118          If a party refers to negotiation communications in the course of a trial, this is deemed to be a waiver of the privilege. Assuming the other party has not objected on the grounds of privilege to admissibility, they can rely on anything in the communications which is in their favour.[368] Whatever the circumstances, the reference must, however, be intentional. A mere accidental reference or oversight may not be sufficient to pierce the veil of confidentiality. Both parties can expressly consent to waive privilege. Furthermore, once a party waives the privilege the other party is also free to rely on that material in court.[369]

3.119          In Chantrey Vellacott v Convergence Group plc[370] the claimants sought an order for their costs of a mediation which had failed to settle the dispute. The parties agreed to waive privilege over the “without prejudice” meeting in order to allow the Court to evaluate the details and conduct of the mediation. The claimants were awarded their mediation costs because the defendants had been so plainly intransigent and unrealistic at both mediation and trial.

3.120          In Hall v Pertemps Group Ltd[371] the court was asked to decide whether threats which occurred during a mediation amounted to a waiver of the mediation privilege. The court held that it only amounted to a waiver of the discrete issue as to whether or not threats were made in the mediation or occurred subsequently and were made to a third party and hence were not relevant to the action. Accordingly the privilege that attached to the mediation process continued to apply and nothing that occurred or was said during the mediation was admissible in court.

(vi)              Unreasonable Refusal to Mediate and Without Prejudice Communications

3.121          In 1889 the English Court of Appeal held, in Walker v Wilshire[372] that “letters or conversations written or declared to be “without prejudice” cannot be taken into consideration in determining whether there is a good cause for depriving a successful litigant of costs.”

3.122          When arguing for costs in England and Wales, if a party wishes to refer to correspondence on the basis that the other party has acted unreasonably it is necessary to have marked it “without prejudice save as to costs.” This is known as a Calderbank offer. In O'Neill v Ryanair (No 3)[373] the High Court recognised the Calderbank letter procedure.

3.123          In Reed Executive plc v Reed Business Information Ltd.[374] the English Court of Appeal considered whether it could compel the parties to disclose the detail of “without prejudice” negotiations (or documents) in ADR when dealing with the question of costs. The Court offered the Calderbank letters approach and held that only correspondence which is either 'open' or marked 'without prejudice save as to costs' could be disclosed to the Court in the absence of a waiver by both parties that “without prejudice” correspondence can also be disclosed.

3.124          Giving the judgment of the Court Jacob LJ also confirmed that the court will not hear evidence as to what happened at the mediation. He added:

"I do not regard such a conclusion as disastrous or damaging from the point of view of encouraging ADR. Far from it. Everyone knows the Calderbank rules. It is open to either side to make open or Calderbank offers of ADR. These days there is no shame or sign of weakness in so doing. The opposite party can respond to such offers, either openly or in Calderbank form. If it does so and gives good reason(s) why it thinks ADR will not serve a useful purpose, then that is one thing. If it fails to do so, then that is a matter the court may consider relevant (not decisive, of course) in exercising its discretion as to costs. The reasonableness or otherwise of going to ADR may be fairly and squarely debated between the parties and, under the Calderbank procedure, made available to the Court but only when it comes to consider costs."[375]

(b)               Summary of Without Prejudice & Mediation

3.125          The Commission acknowledges that the words “without prejudice” cannot bring down a complete veil over mediation communications. In Ryan v Connolly[376] the Supreme Court recognised that it may be obliged to balance the interest in disclosure against the public interest in encouraging settlements, (or ADR, the Commission would add) in cases where the disclosure is sought not for the purpose of holding an opponent to admissions made in the “without prejudice” offer “but simply to demonstrate why a particular course had been taken”.[377] The Commission considers that the appropriate balance is achieved if the law indicates that a court should be slow, both because of the terms of a mediation agreement and public policy factors, to hold that the without prejudice status of material was lost, except in clear and unequivocal circumstances.

(4)                Distinct Mediation Privilege

3.126          The Commission now turns to consider whether mediation should be granted a distinct form of mediation privilege. In Cook v Carroll[378] Gavan Duffy J. approved four criteria favoured by Dean Wigmore[379] for the general purpose of conferring privilege on communications arising from the confidential nature of the relationship between the communicants. According to these criteria, privilege may be established where the court is satisfied that:

1.     the communication was confidential;

2.     confidentiality is essential to the satisfactory maintenance of the relationship;

3.     the relationship is one the community deems necessary to foster;  and

4.     the likely harm caused by mandatory disclosure outweighs the benefit to be gained in the instant case by it.[380] 

3.127          Examples of categories of privilege include the absolute privileges over confidential communications made by a parishioner to a priest (sacerdotal privilege)[381], or communications with a marriage guidance counsellor.[382]

3.128          The Code of Ethics of the Mediators Institute of Ireland notes that “Unless the mediation is specifically given legal privilege under legislation it is not privileged.”[383] It remains to be resolved definitively whether a general privilege attaches to the whole mediation process, including all communications passing within that process. The Commission notes that section 114 of the Residential Tenancies Act 2004 provides for absolute privilege for mediators only for the purposes of the law on defamation.

3.129          In the English case Brown v Rice and Patel,[384] counsel for the defendant argued for the existence of a “mediation privilege”, distinct from the “without prejudice” rule, under which (at least) a mediator could not be required to appear as a witness or produce documents and under which the parties could not waive the mediator's entitlement not to give evidence in respect of the contents of mediation. It was argued that this should build on a category of privilege in matrimonial cases, protecting confidential communications made with a view to matrimonial conciliation.

3.130          The Court noted that the possible existence and desirability of a distinct privilege attaching to the entire mediation process was dealt with in Brown and Marriott ADR Principles and Practice.[385] As already noted, the Court decided the case under the existing “without prejudice” rule. Accordingly, it was not necessary for the Court to determine the question of whether a distinct ‘mediation privilege’ existed.

3.131          It remains possible and thus a matter of concern that a mediator could be called to give evidence in subsequent litigation between the parties. Parties could attempt to extend confidentiality to the mediator by including a contractual provision to that effect in the mediation agreement.

“A substantial and, to our knowledge, unquestioned line of authority establishes that where a third party [whether official or unofficial, professional or lay] receives information in confidence with a view to conciliation the courts will not compel him to disclose what was said without the parties’ agreement.”[386]

3.132          In its 2002 Green Paper on Alternative Dispute Resolution in Civil and Commercial Law, the European Commission stated: "As a rule the third party [the mediator] should not be able to be called as a witness…within the framework of the same dispute if ADR has failed."[387] This approach is being formalised in the United States as mediator privilege. The Uniform Mediation Act provides: “A mediator may refuse to disclose a mediation communication, and may prevent any other person from disclosing a mediation communication of the mediator.”[388] As noted by the Court in Brown v Patel “It may be in the future that the existence of a distinct mediation privilege will require to be considered by either the legislature or the courts but that is not something which arises [in this case].”[389]

 

(5)                Conclusion

3.133          Confidentiality in mediation refers to the ability of a party to prevent the contents of the mediation from being used as evidence in subsequent legal proceedings. In the Commission’s view this is important, not just from a legal standpoint, but from a practical perspective. Candour by the parties can be crucial to a successful mediation. Confidentiality is essential to the mediation process because without it, parties would not be willing to make the kind of concessions and admissions that lead to settlement.[390]

3.134          The importance of the legal status of confidentiality in mediation is particularly pronounced because confidentiality is a fundamental expectation of parties in agreeing to a mediation. In any list of the advantages that mediation offers as a dispute-settlement procedure, confidentiality generally features prominently.

3.135          The Commission notes that, to the extent that the matter has been addressed in legislation in Ireland, confidentiality has not been given sufficient recognition. For example, the Rules of the Superior Courts (Commercial Proceedings) 2004 provide that:

“Without prejudice to any enactment or rule of law by virtue of which documents or evidence are privileged from disclosure, to assist him in deciding whether or not to make any order or give any direction,...  a Judge may direct the parties, or any of them, to provide information in respect of the proceedings, including... particulars of any mediation, conciliation or arbitration arrangements which may be available to the parties.”[391]

3.136          This provision indicates clearly that communications made during the course of a mediation, conciliation or arbitration are not protected and that a judge can request such communications.

3.137          By contrast, section 7 of the Judicial Separation and Family Law Reform Act 1989, renders inadmissible in evidence in court any communications (written or oral) between a spouse and a third party who is assisting towards a reconciliation or agreement on the terms of separation, where proceedings under the 1989 Act have been adjourned for that purpose. In its 1994 Consultation Paper on Family Courts the Commission stated that:

“It is possible that the courts will extend privilege to statements made in the course of mediation in other contexts. There is a strong public interest in fostering mediation. However, it is doubtful whether such a privilege could be regarded as absolute. There may, for example, be cases where the protection of a child from a serious threat of injury would justify a court in setting aside the privilege.”[392]