New Mediation Rules for EU Cross Border Disputes

The EU Directive on mediation in civil and commercial matters in EU cross border disputes has recently been implemented into Irish law. Richard Breen of our Litigation & Dispute Resolution Department reports on the main enhancements to the existing mediation regime for cross border disputes.

The EU Directive on mediation in civil and commercial matters in EU cross border disputes has recently been implemented into Irish law.

The Irish Regulations implementing the Directive empower the Court to adjourn proceedings concerning a cross border dispute and to invite the parties to use mediation to settle the dispute. A cross border dispute is where one (or both) of the parties to the litigation is domiciled or habitually resident outside of the jurisdiction of the Court which is dealing with the litigation but within the EU (excluding Denmark). Only disputes relating to civil and commercial matters come within the Regulations.  

The Regulations seek to enhance the mediation regime for cross border disputes through the following features:

  • Agreements enforceable as a Judgment
    Where mediation, in the course of Court proceedings, results in a settlement, one of the parties can, with the express written consent of the other party, apply to Court to make that settlement agreement enforceable as if it were a Court judgment
  • Pre-Litigation Agreements enforceable as a Judgment
    Parties who have agreed a settlement in a dispute, before engaging in Court proceedings can make an application to Court to make that settlement agreement enforceable as a judgment.  This is a significant enhancement of the mediation regime.  All parties to the settlement agreement need to expressly consent to the application, therefore, it will be crucial to ensure that the settlement agreement contains that express consent
  • Stopping the Clock
    For pre-litigation mediation, the time for bringing claims under the Statute of Limitations will not run in the period from the referral of the dispute to mediation to 30 days after the conclusion of the mediation

Refuse to Mediate at your Peril!

Neither the Regulations nor pre-existing Court rules compel a party to mediate a dispute against its will.  However one must tread cautiously in refusing an invitation to mediate.  In making its costs order at the conclusion of proceedings, the Court may factor in the unreasonable refusal of a party to participate in mediation.  Therefore, in certain circumstances, a successful litigant who refused an offer to mediate without good reason, could find itself not recovering its costs and could even be at risk of an order to pay some or all of the losing party’s costs.

Contributed by Richard Breen, John Aherne.

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Owen O'Sullivan Partner

Richard Breen Partner

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