A recent Court of Appeal decision is the latest instance of the court expressly sending a message to litigants confirming what it expects of them regarding mediation within the court process: Thakkar v Patel  EWCA Civ 117.
Upholding a first instance decision which it described as "severe, but not so severe that this court should intervene", the court refused to overturn a costs sanction on a party who had agreed to mediate but then "dragged its heels" in the discussions over the arrangement of the mediation, to the point where the other party ultimately abandoned the process.
The Court of Appeal has in recent years made clear to litigants that it now expects them to be proactive and engage constructively with each other during proceedings to fully explore the potential for the dispute to be mediated – to the point where ignoring a mediation proposal will usually warrant a costs sanction even if the circumstances were such that an outright refusal to mediate would have been justified (PGF II SA v OMFS  EWCA (Civ) 1288).
The present case confirms that, where mediation is appropriate, the constructive engagement expected by the court also requires that the parties cooperate and act proactively in the arrangement of the mediation: "It behoves both parties to get on with it. If one party frustrates the process by delaying and dragging its feet for no good reason, that will merit a costs sanction".
In a case referred to the Court of Justice of the European Union (CJEU) by the Italian courts, an Advocate General opinion has been issued which considers the scope of the Consumer ADR Directive, including whether it precludes national legislation from imposing mandatory mediation as a pre-condition to litigation: Menini and another v Banco Popolare Società Cooperativa (Case C-75/16).
Julian Copeman, May Tai and Anita Phillips discuss their client research and the outputs of the recent Global Pound Conference to assess what is required to bring mediation into the mainstream for commercial parties in Hong Kong. Click here to access their article in Asian Dispute Review, which was published on 3 April 2017.
The third edition of our ADR in Asia Pacific Guide spotlights alternative dispute resolution (ADR) in Indonesia.
We summarise the state of play in relation to ADR in Indonesia and its interplay with adversarial processes like litigation and arbitration. We delve into the detail of the Supreme Court's new mediation regulation and decree and analyse how these hope to improve rates of settlement. We then look at some practical aspects of mediation and dispute resolution from a lawyer's perspective, highlighting the often novel way in which mediation is deployed in Indonesia. Finally, we summarise the ground-breaking Global Pound Conference (GPC) series which looks at all dispute resolution processes and how these can be improved for commercial parties. Herbert Smith Freehills is proud to be global founding sponsor of GPC.
To download your copy, please click here.
A consultation has been launched "to consider the concerns that have arisen in Europe as a result of the exponential growth of numerous different forms of alternative dispute resolution".
The paper, entitled "The Relationship between Formal and Informal Justice: the Courts and Alternative Dispute Resolution", is a joint project by the The European Law Institute and the European Network of Councils for the Judiciary (the latter chaired by Sir Geoffrey Vos, Chancellor of the High Court).
The consultation's focus is on how the interface between courts and ADR processeses is working in Europe. It seeks views on whether identified concerns can be addressed by developing statements of best practice or models, to be followed by both courts and ADR providers when assessing what dispute resolution process should be adopted in a particular dispute.
The interface between courts and ADR processes is of course a key issue being discussed more globally in the ongoing Global Pound Conference (GPC) series, and it will be interesting to see how the data and commentary generated out of the GPC (following the final event in London in July 2017) compares to the conclusions from this consultation (the final report on which is planned for the end of 2017).
Draft Regulations have been published by the South African government setting out rules for the mediation of investor-state disputes (to the exclusion of international arbitration).
Click here to read our Johannesburg office's bulletin, which highlights concerns with the proposed developments and calls for the Regulations to be brought into harmony with international best practice, such as the International Bar Association's Rules for Investor-State Mediation (which recognise mediation as a supplement, not a substitute, for international arbitration).
With the first eight Global Pound Conference (GPC) events complete and more than 650 delegates sharing their views so far, some interesting data has started to emerge, particularly regarding the views expressed by those participating in the GPC as 'Users' of dispute resolution processes – in-house counsel and business executives whose organisations find themselves embroiled in commercial disputes.
One of the key themes to emerge from the Users at GPC events so far is that their highest priority when selecting which dispute resolution process to use (eg courts, arbitration, mediation or other ADR) is efficiency. They rate efficiency higher than they do the advice given by their advisors, which is revealing. It reflects the extent to which commercial conflicts are a distraction from the day to day activity of Users, namely commerce.
Continue reading on our ADR Hub here.
Herbert Smith Freehills has launched a new Alternative Dispute Resolution Hub (at www.hsf.com/adr).
Sitting alongside our ADR Notes blog (which keeps subscribers up to date on legal and other developments in the ADR landscape), the ADR Hub features the latest thinking and in-depth commentary on the role ADR can and should play within dispute resolution and how it can be used to greatest advantage.
In particular, the ADR Hub will include insights from across our global network arising out of the ongoing Global Pound Conference (GPC) series. With seven events concluded in 2016 and over 30 more planned across the globe for the next six months, the GPC will be amongst the most important events in dispute resolution in 2017, with the data and insights gleaned from the series having the potential to influence dispute resolution practice and policies in the coming years.
In addition to regular commentary, the ADR Hub also brings together some of our most in-demand published resources, including:
- Our 'business-friendly' series of ADR Practical Guides, giving practical guidance on how to make the best use of ADR mechanisms in a variety of contexts
- Regional spotlights such as our 'ADR in Asia Pacific' series
- Client research studies into how ADR is (and isn't) being used effectively by corporates, and a toolkit for those looking to optimise the way their organisation employs ADR in their dispute management processes.
A costs judge has held that information about a party's costs provided for the purposes of a mediation could be used as evidence when considering the cost consequences of a subsequent settlement: Savings Advice Limited v EDF Energy Customers Ltd  EWHC B1 (Costs)
Documents produced for the purposes of mediation are generally covered by without prejudice privilege and, subject to limited exceptions, cannot subsequently be used as evidence. In the present case the costs information was provided in emails headed "without prejudice save as to costs", so it is perhaps not surprising that the costs judge concluded it could be used as evidence in subsequent cost proceedings.
However, other aspects of the reasoning for the decision are more surprising and arguably not supported by existing authorities regarding the without prejudice rule. In particular, the costs judge held that the costs information was not in any event covered by the privilege because it was a statement of pure fact rather than an admission or concession. Such distinction has been rejected in previous cases on the basis that requiring parties to a negotiation to constantly analyse whether they are making admissions or factual statements would undermine the privilege's purpose of enabling parties to speak freely in settlement negotiations (see for example the decision of the House of Lords in Ofulue v Bossert  UKHL16, considered here).
While the decision will not necessarily be followed in future cases, it serves as a reminder that parties should be aware of the limitations of without prejudice privilege and the circumstances in which information provided during mediation may be used in subsequent litigation. As a practice point, parties should ensure that they are clear as to what is intended when they provide or receive information 'without prejudice save as to costs' in the context of a mediation.
Gary Horlock (associate) and Jan O'Neill (professional support lawyer) in our dispute resolution team consider the decision further below.
Asian Dispute Review, sponsored by the Hong Kong International Arbitration Centre, Chartered Institute of Arbitrators, Hong Kong Institute of Arbitrators and the Hong Kong Mediation Council, has published an article on the Global Pound Conference Series, and what to expect from the Hong Kong event.
The one day Global Pound Conference is coming to the Hong Kong Convention and Exhibition Centre on 23 February and promises to be one of the major dispute resolution conferences of 2017. Delegates from across Hong Kong's dispute market will vote via GPC's voting app, and participate in real time debates by world class speakers.
The full programme is here. Register here before 21 January and benefit from the early bird rate of USD 150.
Herbert Smith Freehills is proud to be a founding sponsor of the Global Pound Conference Series and lead organiser of the Hong Kong event.