Over the past year, the appetite to make changes to the Scottish civil justice system has increased, particularly in the case of mediation. Although at an early stage, there are various legislative reforms being proposed that give mediation a more prominent position in all civil litigation matters. But what exactly are these proposed changes, and will they benefit the parties involved?
Mediation is an assisted negotiation, where parties voluntarily attend a (typically) neutral venue with a third party mediator, who facilitates communication between them. In most cases, mediation is an appropriate and cost-effective means of dispute resolution. However, it is not a panacea: there are situations where mediation is neither desirable nor appropriate.
Mediation north and south of the border
In England, although mediation is not compulsory, courts regularly encourage parties to attempt mediation and enforce that approach with cost sanctions. If a party is deemed to have unreasonably refused to take part in mediation, they are at risk of being penalised in respect of costs. For example, where an individual or organisation refuses to mediate and is subsequently successful in litigation, the court may not award costs in their favour. Similarly, they may have to pay additional costs if they lose the court action.
In Scotland, courts encourage mediation in certain cases and, like England, the process is not compulsory. The big difference between jurisdictions is that Scottish courts do not currently impose cost sanctions for failure to engage in mediation. Parties participating in mediation in Scotland are more likely to be doing so because they want to resolve the dispute, rather than to tick a compliance box.
Proposed reform for Scotland
The Scottish Parliament and other bodies have mediation on their reform agenda. Margaret Mitchell MSP initiated a consultation on her proposal for a Mediation (Scotland) Bill in May 2019. Her proposals are:
- It would be compulsory for parties to a litigation to consider mediation, although there would be no requirement for them to agree to mediate.
- The mediation process would be initiated by issuing parties with a questionnaire. The court would then appoint (and pay for) a duty mediator, who would hold an initial meeting with the parties.
- If parties do not wish to mediate, they are free to continue with the litigation. If they wish to mediate, parties will appoint a mediator and will be required to meet the costs of the mediation going forward. Parties will be required to sign an agreement setting out the terms on which the mediation will be conducted.
- The scope of the mandatory initial meeting is expanded, to the extent that a court action cannot be raised unless parties have attended an initial meeting.
A summary of consultation responses was lodged in November 2019 and it remains to be seen how any bill will be shaped.
In June 2019, Scottish Mediation published a report entitled Bringing Mediation into the Mainstream in Civil Justice in Scotland. This report was prepared with the support of the Scottish Government and also calls for the introduction of a Mediation (Scotland) Bill. The conclusions of the report are:
- Legislation would make it compulsory for parties to consider mediation but parties would not be compelled to participate.
- Parties would be referred to an Early Dispute Resolution Office (EDRO) and would attend an initial meeting with a mediator. A report on the outcome of this meeting would be issued to the EDRO and, if court proceedings subsequently proceeded, the report would be lodged in process.
- Mediation would be publicly funded in the case of Simple Procedure actions (actions under £5,000 in value) – it would either be free or available at a very low cost.
- In respect of higher value cases, a ‘price point’ would be set which would identify those cases that would benefit from funding.
- Mediation would be available even before court proceedings were raised.
- Court rules would be changed to create a duty on judges to encourage the use of mediation.
The pros and cons of proposed changes
The Scottish mediation landscape is the subject of review. It seems inevitable that legislation will follow in some form, either by way of a private member’s bill or one promoted by government. Any efforts to promote awareness of and increase involvement in mediation should be viewed as a step in the right direction, and the fact that mediation is on the Scottish parliament’s radar is a positive sign.
However, what is not acknowledged within either the consultation or the report is that mediation is already a major player on the Scottish dispute resolution scene, particularly when it comes to significant commercial disputes. Larger commercial parties are all too aware of the economics of litigation and will turn to an alternative, more cost-effective method of resolution wherever possible.
In respect of the proposals, a distinction should be drawn between lower-value disputes and high-value commercial litigations. Lower-value disputes will characteristically involve more unrepresented parties and, in such cases, a formal route to mediation may be more helpful than in disputes involving sophisticated parties represented by legal professionals with existing knowledge and experience of mediation. Indeed, the Law Society of Scotland Rules already require solicitors to meaningfully advise clients on alternative dispute resolution. Lower-value disputes often result in a disproportionate amount of court time being required to hear the case – increased uptake of mediation should result in increased court efficiency to the benefit of all court users.
As the proposed reforms progress, it is important for legal professionals to be aware of the proposed changes and how this might impact their approach to litigation and, indeed, mediation. If and when a bill is drafted, it would be prudent for feedback to be sought from those working on the ‘front line’, with regular experience in the practicalities of dispute resolution.
Whatever form the proposed legislation might take, it is important that mediation retains its voluntary status and continues to be a service led by demand – compelling parties to mediate is not productive and could, in many cases, result in increased costs and delay in resolving disputes.