Jersey: mediation

Unlike England in the 1990s, Jersey’s legal landscape escaped unscathed from any equivalent of the Woolf reforms. In fact, it has taken some time for the concept of alternative dispute resolution (ADR) to catch on in the island. Now, however, Jersey is catching up fast, and this process looks set to play a significant role in settling future disputes.

In Jersey, the Royal Court Rules are, to a large extent, based on the 1999 Rules of the Supreme Court. Hence those nostalgic for terms such as plaintiff, discovery and affidavit would enjoy litigating in this jurisdiction. However, certain elements of the English reforms have been brought in through the back door. The back door in this case being Jersey’s Court of Appeal. Those entitled to sit are Jersey’s two full-time judges, the bailiff and the deputy bailiff, as well as those who have held judicial office in the Commonwealth, or who have had at least 10 years’ practice in England & Wales, Scotland, Northern Ireland, Guernsey or the Isle of Man. A panel of 12 appeal judges is chosen each year. It is these appeal judges with first-hand experience of ADR who have guided Jersey litigants towards mediation, through directions and clear judicial indications, since the late 1990s.

Jersey’s judiciary also took the initiative. In March 2002, a mediation pilot project was introduced in the Petty Debts Court – the equivalent of the County Courts in England and Wales. Also, at the request of the Jersey Legal Information Board, the Centre for Effective Dispute Resolution produced a report in September 2002 entitled ‘The Development of Alternative Dispute Resolution in Jersey’. It recommended that the island “should adopt a relatively bold approach” and focus on incorporating mediation into its legal system. It did.

By May 2004 a number of Jersey advocates became accredited mediators and the Jersey Accredited Mediators Association was established. In addition, June 2004 saw the Petty Debts Court Rules amended to provide for mediation.

In the same month the Royal Court Rules were also amended, giving the Royal Court power at any stage of the proceedings, either on its own motion or on the application of any party, to stay the proceedings for the purpose of ADR. The latter phrase is widely defined to include “any method of resolving disputes otherwise than through the normal trial process”.

The Jersey Legal Information Board launched this amendment with a speech by the bailiff in which he said: “Experience in other countries has shown that mediation can often leave the parties in a better position than litigation. First, if a dispute can be mediated at a relatively early stage, there can be a significant saving in cost of the parties. Secondly, a dispute settled confrontationally through the courts will often have a bruising effect upon the parties. There is always a loser, and sometimes there is no real winner.

“A mediated settlement, while not necessarily leading to total satisfaction on both sides, can enable the parties better to understand the other’s point of view and occasionally to offer or to accept an apology. Particularly in a small community, where trading and even personal relationships between the litigating parties may continue, the ability to settle a disagreement in private without creating lasting wounds is, in my view, an important positive factor in favour of mediation.”

Now parties involved in Jersey litigation are at the least contemplating mediation, and quite frequently participating in it. In fact, it would appear that mediation is also taking place before proceedings are started. This is evidenced by the reduction in the court list, which is produced every Friday, and in which all new cases are listed.

Another indicator of the increased mediation in Jersey is the establishment of local case law on the subject. One example is the case of KHD Humboldt Wedag AG Koln & ors v La Generale des Carrieres et des Mines (2005). This was an action brought by the plaintiffs against an entity owned by the Democratic Republic of Congo on the back of multi-euro judgments obtained by the Commercial Court in Brussels. The defendant sought to stay the proceedings, arguing that the ongoing debt restructuring negotiations involving the Democratic Republic of Congo should enable the court to exercise its power to stay the proceedings for the purposes of ADR. The court declined the stay, and in relation to that particular point noted that restructuring an undisputed debt was not the same as resolving a dispute by alternative means.

In Bespoke Investment Limited v Lincoln Nominees Limited & ors (2005), the question of the costs consequences of refusing to mediate was judicially considered in Jersey for the first time. It was held that the guiding principle on deciding whether to penalise in costs a party that had refused to mediate was whether it was acting unreasonably in so doing. Factors to take into account in that assessment were whether the mediation had a realistic prospect of success, the character of the litigants, the stage at which mediation was contemplated and the relative cost of mediating as opposed to going to trial.

Although the Royal Court has no power to force the parties to mediate, which, of course, must be a consensual process, it is often the case that at the pre-trial review stage, a strong judicial hint is given that encourages otherwise recalcitrant parties to look more favourably on mediation.

At present, mediations most often take place in Jersey or London. The latter is convenient where the majority of parties are non-Jersey resident or the mediator is based in England, plus English QC’s are a popular choice as mediator.

Now the mediation ball has started rolling in Jersey, it is likely to continue to gather pace. The Jersey-trained mediators are gaining experience and establishing their reputations. Practitioners as well as clients can see for themselves the advantages of the process. Furthermore, the growing body of case law will provide guidance to parties on areas that were otherwise undecided and will eliminate areas of uncertainty.

While mediation was first introduced informally to the island and only latterly on a more established basis, it is clear that it is not only here to stay, but is likely to continue to increase and become the preferred approach going forward.

Gillian Robinson is a partner at Bailhache Labesse