In recent years the Isle of Man Courts, in common with their
counterparts in many other jurisdictions, have demonstrated a
strong desire for parties in litigation to attempt to resolve their
issues by means other than litigation, most notably
mediation.
In May 2012, the English Court of Appeal issued a stern warning to
a defendant who rejected mediation offered at a previous hearing,
with Lord Justice Longmore referring to the decision as an
"inadequate response". The defendant in Ghaith v
Indesit successfully defended a personal injury claim by an
employee, but the employee was subsequently given leave to appeal
and the Court urged both parties to pursue mediation. Indesit
rejected that advice, a decision which LJ Longmore said will
"inevitably lead to a substantial increase in
costs" for the defendant. Another member of the Court of
Appeal panel, Lord Justice Ward, said that mediation has
"a canny knack of transforming the intractable in to the
possible" and reiterated that, when offered, mediation
should be embraced.
The attitude of the English Court of Appeal mirrors that of the
Isle of Man Courts. In his 2009 judgment in Association of Cosmetic
Surgery, Deemster Doyle (who as First Deemster is the Island's
Chief Justice) said, "law is sometimes a very blunt
instrument to try and solve disputes...and I would encourage the
parties....to endeavour to resolve their disputes through the
mediation process."
Deemster Doyle summarised the Court's attitude to ADR in his
2003 judgment in Vrinera Marine Company Limited:
"Litigation these days is moving away from confrontation
and more towards co-operation. Parties are being encouraged to
engage in the mediation process rather than destroying valuable
personal and commercial relationships and wasting valuable time and
costs in court. Those involved in commerce are fast coming to the
sensible conclusion that their time and money is best spent on
constructive commerce rather than on lawyers and destructive
litigation."
The introduction of the "new" Rules of the High Court of
Justice of the Isle of Man 2009 (the "Rules") has
instigated changes to the way in which the different methods of ADR
are viewed. The Rules allow for active case management encouraging
parties to use ADR if the Court considers it appropriate: a claim
or any matter arising from it may, if all parties agree, be
referred to mediation and the Court action will be stayed.
In recent years, and not least because of the introduction of the
Rules, it has become increasingly common for ADR to be used to
settle differences between parties to a dispute; it is becoming a
vital tool for all involved in dispute resolution. ADR techniques
have gained prominence due to their speed, flexibility and
relatively low cost.
Mediation
Mediation is a form of ADR in which a mediator follows a
structured process in an attempt to facilitate an agreed settlement
between parties to a dispute. The mediator, who will be entirely
independent of both the dispute and the parties, does not decide
how to resolve the dispute but instead assists the parties in
finding a mutually agreeable solution.
A mediator's skill as a mediator is often more important than
any legal or technical knowledge relating to the dispute. Mediators
tend to operate in one of two ways: they may be
"facilitative", assisting the parties without expressing
a view on the dispute or appropriate settlement terms; or
"evaluative", playing an active role in the process and
suggesting solutions. In reality, many mediators adapt their style
to suit the situation during the mediation and they routinely use a
combination of techniques to aid the parties in reaching a mutually
agreeable outcome.
The mediation process is often likened to an exhausting
rollercoaster ride which can be frightening yet fulfilling. It is
conducted on a "without prejudice" basis, so the parties
are free to offer concessions or compromises and to negotiate
freely without influencing, in any way, any Court action that may
follow if the mediation fails. Each "session" solely with
the mediator is confidential unless one party permits the mediator
to raise certain issues with the other party. Mediation is
non-binding in the sense that the parties can walk away at any time
and any agreed settlement will be set out in a binding agreement to
be signed by both parties.
It is now common practice for commercial contracts to contain an
ADR clause stipulating that attempts must be made to settle any
dispute of its terms using ADR and, in many cases, specifying
details of the procedure to be used. Inclusion of such a clause
ensures that neither party is able to force the other into costly,
time-consuming, constrained litigation through the Court without at
least attempting ADR, thereby protecting the parties' ability
to benefit from its myriad advantages.
Advantages of Mediation
Mediation offers a number of advantages when compared to protracted, expensive and potentially damaging litigation in Court, such as:
- potentially huge savings in terms of both management hours and money;
- enabling the parties to retain control of the dispute and its settlement rather than placing control in the hands of a third party (e.g. the Courts, an arbitrator);
- greatly reducing disruption to the parties' businesses;
- confidentiality (in contrast to court proceedings which are a matter of public record and may attract press attention);
- minimising harm to relationships between the parties; and
- allowing the parties to agree innovative solutions rather than the restricted awards available to the Courts.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
