8 April 2002
On 20 March 2002, the Lord Chancellor's Department published a further report in its Research Series entitled "Alternative Dispute Resolution in Commercial Cases and in the Court of Appeal" by Hazel Genn, professor of socio-legal studies in the Faculty of Laws at University College, London.
The Court of Appeal's mediation scheme was established in 1996 and Genn's survey covers the period between November 1997 and April 2000. Being a voluntary Scheme, the court invites parties to participate. Cases are not individually selected, but, subject to the exception of certain categories of case, a standard letter of invitation is sent to the parties involved in appeals. If both parties agree to mediate, then a mediation is arranged by the Court of Appeal and the mediators supply their services free of charge. Since 1999, where parties have refused to mediate they have been asked to supply their reasons for refusal.
In the period concerned, just 38 appeal cases were actually submitted to mediation with the agreement of the parties. Of these, 17 were successfully mediated either in the course of the mediation or shortly thereafter. In a further 99 cases, only one party was willing to mediate. Inevitably, the question arises whether such a small number is a suitable base upon which to make any sensible judgement as to the workings of the scheme or as to the advisability of making it compulsory. Other jurisdictions have long had a compulsory mediation stage as part of their appeal processes: in particular, all 13 federal courts in the US have some form of ADR and the number of cases subjected to appellate ADR is between 10 and 25 per cent of all appeals filed.
Professor Genn records that the most common reasons given for refusal to mediate were that:
a judgment was required for policy reasons
the appeal turned on a point of law
the past history or behaviour of the opponent.
Where mediation, although attempted, was not successful, a high proportion (62 per cent) went on to trial. This suggests that there are special characteristics of appeal cases which need to be considered if selecting cases for mediation. The current 'blanket' approach of inviting all parties to appeals to mediate, together with threats of penalties for refusal, may not be appropriate and is certainly not effective.
The US experience tends to undermine a commonly held prejudice in the UK that mediation will not work where one party has already been successful. What would be interesting to know about the UK's scheme is how many of those cases which were successfully mediated at the appeal stage had previously been unsuccessfully mediated before trial at first instance. One suspects that in none of them had mediation been attempted before trial. All the reasons that are advanced to support mediation as a better method of resolving most disputes suggest that by the time the case has been tried at first instance, the opportunities for a successful mediation are circumscribed. Therefore it is even more important that a careful assessment is made, in each case, of the real possibility of a successful mediation.
All the current indications are that mediation is going to become the norm both at first instance and at appeal. In appropriate cases, lawyers are expected to be aware of their 'heavy obligation' to resort to litigation only where it is unavoidable. In particular, where public money is involved, the Court of Appeal has emphasised that today, enough should be known about ADR to make the failure to adopt it 'indefensible' (Frank Cowl & ors
Plymouth City Council). In addition, the Court of Appeal has recently emphasised the court's role in furthering the overriding objective by active case management. Emphasising the court's discretion as to costs when considering the conduct of the parties, the Court of Appeal refused costs to the successful respondent to an appeal because it had turned down the chance of ADR when it had been suggested by the Court of Appeal (Susan Dunnett
Railtrack Plc). Thus, where the Court of Appeal has 'invited' the parties to consider using mediation, a party may refuse such an opportunity at a risk to costs.
If these two recent decisions of the Court of Appeal indicate a trend towards a more regular use of mediation at permission stage, or even compulsory mediation as a condition of appeal, then the present pro bono ad hoc arrangements should be revised. If there are to be costs sanctions on parties who fail to accept an 'invitation' or an order to mediate, then surely the parties are entitled to choose their own mediator, and, as a necessary consequence, meet the costs themselves. Although with the Court of Appeal scheme and the scheme at the Central London County Court (CLCC), volunteers acting pro bono or for a nominal fee were initially essential to attract parties to the idea of mediation, it would seem that the same lack of interest has manifested itself in the Court of Appeal Scheme as in the CLCC.
Genn reports that solicitors' experiences of successful mediations were largely positive, but nevertheless there were expressions of concern as to their clients' perceptions of being 'pushed' into mediation or being 'pressured' to settle. The solicitors who had been involved in unsuccessful mediations also complained on occasions about the 'compulsion' to mediate where there had been little scope for compromise. More interestingly, there was evidence of an occasional mismatch between the mediator's approach to the mediation and the expectations of the parties and their advisers. Generally, it appeared that while solicitors approved of the Court of Appeal taking the initiative in encouraging ADR in appropriate cases, it was felt that there was a need to adopt a more selective approach, as is the case in the Commercial Court.
To have a chance of succeeding, mediations must take place at the right time, and that varies with each case. At the appellate stage, the parties' positions have inevitably polarised, and very often it is all or nothing. A possession order, a boundary declaration, the right to intellectual property, or even a finding of a breach of contract, may be capable of resolution before trial at first instance where there may be room for argument on merits, but once the merits have been determined in one party's favour, it requires a very special circumstance to persuade the successful party that there is anything left to mediate other than possibly quantum or costs.
In these circumstances, if the Court of Appeal is considering an even more pro-active and draconian regime for mediation, it ought to reflect long and hard on the wisdom of threatening parties with costs sanctions unless the case for a mediation is made out. It is necessary to assess, with great care, those cases where mediation might be worth trying, rather than operating a blanket regime of invitations to all. In some cases (and Cowl and Dunnett are clear examples) the value of mediation is apparent. In other cases it is necessary to know the history of the litigation which has led to the Court of Appeal: for example, has mediation already been attempted?
How best to develop a scheme for mediation in the Court of Appeal? First, the practice of inviting mediation in all but a few cases should be replaced by a more selective system. This will require the creation of clearly stated principles to the selection process.
Second, it seems that those making the decision as to which cases may be appropriate ought to have practical experience of mediation. Most judges have only a theoretical knowledge of mediation. This may well be the case for a number of years to come until those currently in practice as mediators are appointed to the bench. In the interim, there may be a case for appointing a panel of experienced mediators to assess all appeals and indicate those which might be worth submitting to mediation.
Third, it is crucial that any mediator appointed to help resolve the dispute is acceptable to the parties. Genn concluded from her research that mediators with excellent skills and familiarity with the subject area of the dispute produce the highest levels of satisfaction. "The approach of mediators needs to be matched with the expectations of parties and their solicitors," she states. The right, or at least the desirability, of the parties being able to select their mediator will almost certainly mean that they will have to bear the cost. However, the percentage success of the outcome is likely to justify this approach. If successful, the costs will certainly be less than the costs incurred in a full appeal.
In conclusion, the results of the Court of Appeal scheme so far are probably too small for any reliable analysis. Nevertheless, while there is no need for any drastic change in the appeal process so far as mediation is concerned, the scheme would benefit from a more targeted approach. In general terms, it would be better by far to educate all practitioners as to the benefits of mediation so that they can properly advise their clients at an early stage as to the wisdom of mediation, and make it clear that it is a professional obligation to be able to do so. The court can then police all cases with the sanction of costs orders in the event that a case was brought to trial without any genuine attempt at solving the problem by mediation.
In an ideal system, therefore, as far as the Court of Appeal is concerned, there ought to be a good reason why any litigant should be deprived of his right to have an appeal determined, especially if he has been given permission to appeal.
Michel Kallipetis QC and Colin Manning, Littleton Disputes Resolution Services
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