knowledge 23 June 2016 |

Mediation is Not Always an Option

In Grant v Minister for Communications,¹ the plaintiffs were boat and ship operators on the Atlantic coast. They claimed to have been subjected to a series of decisions by the Minister, his servants or agents which were unlawful, unjust, discriminatory, in breach of EU law and for the improper purpose of either damaging the plaintiffs’ businesses or aiding their competitors. It was alleged that the decisions involved misfeasance in public office.

After close of pleadings and completion of discovery, the plaintiffs applied to have the court invite mediation. The defendants claimed that the proceedings were not suitable or appropriate for mediation. The objections included delay; the fact that the claims made very serious allegations against public officials; the fact that declaratory reliefs were central to the reliefs sought, and the fact that the allegations were wide ranging and spread over several years. The defendants suggested that it would be more appropriate to have a split trial dealing first with liability and leaving over the questions of damages.  

In considering the application, Costello J noted that in Atlantic Shellfish Ltd v Cork County Council,² Gilligan J had acknowledged the many benefits of mediation as including “…the ability of the parties to choose the mediator and the venue, that the mediation is conducted in private, the maintenance of confidentiality, the ability to agree or not agree, the savings on costs, expenses and time, the absence of the stress of an actual court case and the benefits to the parties particularly in commercial situations, to continue to do business after a successful conclusion to the mediation process.”

The High Court judgment in Atlantic Shellfish noted that the reality is that mediation is a two way process between willing parties who agree to and participate in the mediation process with a willingness to compromise and that a party ought not to be forced to attend mediation. The High Court’s refusal to invite the parties to mediate in Atlantic Shellfish was appealed but the Court of Appeal dismissed the appeal,³ holding that the court should only exercise its discretion if it considers it  appropriate to do so having regard to all of the circumstances of the case. The court must first be satisfied that the issues in dispute between the parties are amenable to the type of ADR proposed, and that it is one which is capable of determining the proceedings or issues between the parties. The court must then consider any other relevant circumstances. This may include whether the application is made bona fide in the belief that the issues in dispute can be disposed of and that the applicant is genuinely willing to engage with proposed ADR, rather than one made for the sole purpose of improving the applicant’s negotiating position given that the effect of the order will be to trigger applicable cost provisions⁴ which may put the party rejecting the invitation of mediation at greater cost risk.  

Costello J concluded that the court should not invite the parties to mediation if satisfied that the application is brought by a party who knows that an invitation will for good reason be refused and/or where satisfied that the applicant has no real interest in the ADR proposed and the application is entirely tactical.  

Costello J was not satisfied that the multitude of complex issues comprised in the proceedings was amenable to mediation. The plaintiff had not identified areas of contention or parts of the claim which might be resolved or narrowed in the context of the mediation. Mediation could not result in declaratory reliefs, which were central among the reliefs sought, and mediation could not determine any of the legal issues raised against the defendants and therefore the case could not be resolved unless the defendants abandoned their defence to issues of liability. Where mediation was unlikely to succeed, the process would, far from resulting in cost saving, increase the cost of the litigation.  

The courts’ experience is that proceedings are most likely to be resolved by mediation after the pleadings are closed but before the parties have incurred the expense of complying with discovery (which had been completed here). Proceedings are far less likely to be resolved by mediation just before the case is ready for hearing, particularly where one party does not wish to engage in mediation. The court concluded that it was not unreasonable for the defendants to maintain their entitlement to have a claim involving allegations of misfeasance in public office resolved in court where their actions could be tested and, in the opinion of the defendants, vindicated in public. Therefore the court refused to invite the parties to mediation.  

Conclusion  

Mediation is commonly and successfully used to resolve many kinds of disputes in Ireland. Where appropriate, it can save significant costs and preserve or repair relationships between the disputing parties. However, it is not a panacea. Before exercising its discretion to invite the parties to mediation, the court must be satisfied that the issues in dispute are amenable to mediation (and they may not be where declaratory relief is sought, or where an issue of principle needs to be determined which will have wider ramifications or a precedent value). The court must examine all of the relevant circumstances, including whether the party applying to refer to mediation is doing so in good faith in the genuine belief that the issues can be resolved and is itself genuinely willing to engage or is simply applying tactically to create an enhanced cost risk for the opposing party, by setting up a situation where the opposing party must decline an invitation to mediate. The point at which the application to refer to mediation is made, and the nature of the claims, reliefs sought and issues, are all critically relevant in that examination.