Brexit: UK unwinds implementation of EU ADR laws

The UK Government has published legislation to effectively revoke the implementation of the EU Mediation Directive (2008/52/EC) after Brexit.

The Cross-Border Mediation (EU Directive) (EU Exit) Regulations 2019 (the Regulations) were made on 1 March 2019 and will come into effect on exit day, whenever that occurs.

Why?

The development is part of a wider policy decision by the Government to revoke/repeal UK domestic legislation that implemented EU law in instances where that law is based on reciprocity between EU Member States. Continue reading

Article published – ADR reform: one size does not fit all

On 6 March, the Civil Justice Council held a workshop to discuss the recommendations made in its interim report on ADR, which was subject to consultation late last year. The interim report addresses concerns regarding a perceived underuse of ADR within some sections of the civil justice system and suggests a variety of possible corrective measures. The proposals include a power for the court to determine whether costs sanctions should be imposed for unreasonable conduct relating to ADR (such as an unreasonable refusal to mediate) not only at the end of a case, as currently, but during the matter when the decisions regarding ADR are taken.

Jan O’Neill has published a post on Practical Law’s Dispute Resolution blog in which she questions how realistic the suggestion of “midstream” assessment of parties’ conduct relating to ADR would be in practice. She suggests that many of the concerns expressed in the report as to the underuse of ADR are not relevant to many larger, complex claims, and urges the working group to tailor any final recommendations to the specific courts or dispute types for which the evidence suggests they are needed and practicable.

Click here to read the post (or here for the Practical Law Dispute Resolution blog homepage).

 

 

Global Pound Conference series – new online voting system now open

The Global Pound Conference (GPC) series concluded on 6 July, with the final conference held at the Guildhall in London. This landmark project (of which Herbert Smith Freehills is the lead sponsor)  has seen more than 3,000 corporate and disputes professionals come together in conferences spanning 29 cities across the globe throughout 2016-17, with many more following and discussing the series online and at other events.

Through interactive electronic voting at the individual conferences on a set of core questions, the series has gathered data aimed at improving systems for the resolution of commercial disputes in the 21st century – spanning court processes, arbitration and ADR.   We believe this is a unique set of data that has never been collected before.  Amongst other things, it will provide a unique insight into what organisations are currently doing to avoid conflict and save money through innovative uses of the key dispute resolution processes.

However, given that many people were unable to attend a local GPC event, GPC has now opened an online voting system, to allow a wider audience to provide input on the core questions.  If you were unable to vote and would like to do so, please click here to vote now.   The online voting system will be open until 31 July 2017  and should take no more than 15 minutes to complete.

We encourage you to add your voices about how to shape the future of commercial dispute resolution and improve access to justice in the 21st century.

 

Court of Appeal sends further message on mediation: Don’t drag your heels in arranging it

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 [2017] 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 [2013] 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". 

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Costs judge finds information from mediation is admissible when considering costs consequences of settlement

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 [2017] 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 [2009] 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.

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Settlement offer conveyed through a mediator found not to be protected by without prejudice privilege due to ‘unambiguous impropriety’

The Court of Appeal has recently applied the rarely invoked "unambiguous impropriety" exception to without prejudice ("WP") privilege, to find that a written settlement offer conveyed through a mediator following an unsuccessful mediation was not protected by WP: Ferster v Ferster [2016] EWCA Civ 717.   

Communications in connection with a mediation (including when the mediator acts as a conduit for negotiations after the mediation) will of course normally be protected by WP privilege. However, one of the narrow exceptions to the WP privilege is where the communication involved some 'unambiguous impropriety', in the sense of an attempt to abuse the protection afforded by the privilege.  In the present case, the Court of Appeal found that correspondence conveying a settlement offer on behalf of the claimants constituted an unambiguously improper threat against the defendant in the nature of blackmail and, as such, was not protected.

The decision serves as a reminder that WP privilege cannot be used as a cloak for impropriety.  It also underlines the fact that there is a distinction to be drawn between the use of proper leverage in the context of settlement discussions and the making of improper threats.  The courts will take a dim view of the latter.   Read more commentary on the decision here.

 

Guide to Dispute Resolution in Africa: 2nd edition

Herbert Smith Freehills has published an updated second edition of our Guide to Dispute Resolution in Africa, a publication summarising the key dispute resolution procedures and trends in each of Africa's 54 diverse jurisdictions.

Since its publication in 2013, the first edition of the Guide has proved to be an invaluable resource not just for those facing disputes in Africa but for anyone who is considering investing in unfamiliar territory and would like to understand better the legal landscape of that country.  Whether you want to know the basics of a country's legal system, details on litigation and arbitration procedures, whether ADR is embraced, or what the applicable limitation periods or privilege rules are, this publication should be a first port of call.

Please click here to download the full Guide or here to access the chapter for a specific jurisdiction. 

To request a hard copy of the Guide, please email Africa Disputes.

UK: Civil Courts Structure Review recommends expanded role for ADR

The recently published final report of Lord Justice Briggs in his Civil Courts Structure Review includes some interesting conclusions as to the role currently played by ADR in the civil justice system in England and Wales and a number of recommendations aimed at expanding that role.

Key recommendations are for:

  • the proposed new Online Court to include an expanded range of conciliation options (beyond the short telephone mediation originally recommended); and
     
  • the re-establishment of a court-based out of hours private mediation service in County Court hearing centres.

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CEDR Mediation Audit results published

The Centre for Effective Dispute Resolution (CEDR) has released the results of its Mediation Audit 2016, based on a survey of practising mediators in the UK.   (The results of a parallel survey of lawyer attitudes to mediation are to be published separately).

The audit is the seventh biennial survey CEDR has conducted in the last 14 years (in conjunction with the Civil Mediation Council).  The 2016 audit received 319 eligible responses from mediators. 

While it is important to bear in mind the empirical limitations of such reviews based on survey responses from a sample of market participants, the audit does highlight a number of interesting trends in civil and commercial mediation in the UK.    CEDR’s key findings from the responses include:

  • the current size of the civil and commercial mediation market in England & Wales is estimated at approximately 10,000 cases per annum (5.2% more than the 9,500 cases estimated in 2014)

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