The European Communities (Mediation) Regulations 2011 (SI 209 of 2011) published in May 2011 by the Department of Justice and Equality is the latest Irish development in the area of mediation. This transposes to Irish law the EU Mediation Directive 2008/52/EC.
Ambit of the Regulations
The Regulations reinforces the right of parties to disputes between businesses within different EU member states to recourse to mediation.
The Regulations differ in approach from that proposed by the draft Mediation and Conciliation Bill 2010 proposed by the Law Reform Commission in their paper on Alternative Dispute Resolution: Mediation and Conciliation: November 2010 which had a much wider ambit.
The Regulations implemented the Directive within the EU timelines. EU member states (except Denmark, which opted out) had until 21 May 2011 to implement the new rules into national law.
Right to Mediation in a Dispute
The Regulations permit the Courts to invite businesses to use mediation to resolve disputes where the Court considers it appropriate, having regard to all circumstances of the case and with their consent. The parties, by agreement, can also request adjournment of proceedings to explore mediation. Mediation can be considered at any stage of the dispute process.
Where the parties decide to use mediation within the context of a dispute, the Courts may also then make such necessary orders or directions so as to facilitate mediation. Under the Regulations, the Courts may invite the parties to attend information sessions on mediation.
Under the Regulations, businesses remain free to select mediation as one of their preferred options for dispute resolution as part of a stepped dispute resolution clause in a commercial contract.
Enforcement of Mediation Agreements
It is now confirmed that all written mediation agreements can be enforced through application to the Courts. This will apply equally to those mediation agreements that arise during or prior to litigation/arbitration process. The Regulations provide a time limit on applications for enforcement of mediation agreements (six years from the conclusion of the mediation).
Confidentiality
The Regulations also support the principle of confidentiality of mediation, except in specified limited circumstances, such as public policy and where necessary to enforce the mediation agreement.
Compulsory Mediation
The Regulations in Ireland do not make the use of mediation compulsory for resolving disputes between businesses in different member states as is the case in some other countries, such as Italy.
However, as can be seen from recent case law in the UK case of Rolf v De Guerin EWCA Civ 78, parties’ refusal to mediate or explore other forms of ADR during litigation may affect award of costs at the end of a case.
In that case, the Court of Appeal decided that “parties should respond favourably to offers to mediate or settle and their conduct in this respect can be taken into account in awarding costs”. This was based on the De Guerin’s refusal to have a settlement or mediation meeting.
Reference was also made in that case to the UK Jackson Report on the Review of Civil Litigation Costs emphasising the need to mediate generally and particularly on low value construction disputes. This sentiment has been echoed in Ireland’s own McCarthy report.
While this case is not binding in Ireland, it will be interesting to see if or how decisions such as Rolf are addressed by the Irish courts and how it will affect businesses in disputes going forward.
Conclusion
CPAs need to have a clear understanding of both the existence and processes of mediation in order to best advise their clients. Businesses can exercise the right to go to mediation at any time in the dispute resolution process. For businesses with contracts with other businesses within the EU, developments such as the Regulations expand the options to resolve a dispute if it arises. With ever increasing focus on saving time, money and maintaining business relationships, continuing developments in mediation, such as the Regulations, are to be welcomed by Irish and EU businesses alike.
Contributed by Cassandra Byrne and Jarleth Heneghan, Partner.
This Article appeared in the September 2011 edition of Accountancy Plus, Journal of the Institute of Certified Public Accountants in Ireland
