Tánaiste Announces Intention to Publish Mediation Bill.
The Tánaiste was responding to an oral PQ posed by Deputy Josepha Madigan
Wednesday, 13th July 2016: “I welcome the announcement by the Tánaiste and Minister of Justice, yesterday in the Dáil, that she intends to publish the long awaited Mediation Bill in the autumn,” stated President of the MII Sabine Walsh, who was commenting on the Tánaiste’s response to an oral PG posed by Deputy Josepha Madigan in the Dáil yesterday.*
“This legislation will promote mediation as a viable, effective and efficient adjunct to court proceedings and the enactment of the Bill has the potential to divert many civil and commercial disputes from our courts and save billions in the process,” said Sabine Walsh, President of The MII. She added, “There appears to be widespread political support in the Oireachtas for the Bill and there is now a great opportunity for this Dáil to demonstrate its effectiveness by enacting the Mediation Bill as soon as possible.”
Draft Mediation Bill 2012
The previous Programme for Government called for the encouragement and facilitation of mediation to resolve civil disputes. The programme stated that mediation would deliver significant cost and time savings for businesses and the State, and the MII has demonstrated significant savings can be made through mediation. The MII estimates that legal costs in relation to civil cases in 2011 are estimated to have been €1.17 billion – a huge figure considering our current financial situation. This figure is calculated from figures contained in the 2011 Court’s Services Annual Report. The formula takes costs claimed by the winning party, multiplies this by two to get the costs for both sides of the case and then takes account of the fact that 90 per cent of civil cases are settled before Court. The MII has estimated that litigation costs relating to civil cases in 2010 was €1.3 billion and in 2009 it was €1.2 billion.
Must parties to a dispute entertain ADR before litigating and what are the consequences if one party refuses? The case of Murray and another v Bernard develops this area of law.
The Admiralty and Commercial Court Guide (paras G1.1 and G1.4), the Chancery Division Guide (paras 17.1 and 17.4), the Queen’s Bench Guide (para 6.6.1) and the Technology and Construction Court Guide (paras 2.4.3 and 7.1.3) state that legal representatives should:
(1) in all cases consider with their clients and the other parties the possibility of attempting to resolve the dispute or issue(s) by ADR; and that
(2) they should ensure that their clients are fully informed as to the most cost-effective means of resolving their dispute.
However, parties are not obliged to submit their dispute to ADR but the court will consider the reasons for any refusal to do so when exercising its discretion on costs under CPR 44.2. For example, in Vector Investments v J D Williams  EWHC 3601, the failure of the claimant to negotiate after having received a substantial offer led the judge to limit costs to 50% starting 21 days after the offer had been made.
However, in PGF II SA v OMFS Company 1 Limited  EWCA Civ 1288 the Court of Appeal said that “while in principle the court must have that power, it seems to me that a sanction that draconian should be reserved for only the most serious and flagrant failures to engage with ADR, for example where the court had taken it upon itself to encourage the parties to do so, and its encouragement had been ignored.”
The court in PGF II SA applied Halsey v Milton Keynes General NHS Trust  1 W.L.R. 3002 said:
1. The court should not compel parties to mediate even were it within its power to do so. This would risk contravening article 6 of the Human Convention on Human Rights, and would conflict with a perception that the voluntary nature of most ADR procedures is a key to their effectiveness.
2. Nonetheless the court may need to encourage the parties to embark upon ADR in appropriate cases, and that encouragement may be robust.
3. The court’s power to have regard to the parties’ conduct when deciding whether to depart from the general rule that the unsuccessful party should pay the successful party’s costs includes power to deprive the successful party of some or all of its costs on the grounds of its unreasonable refusal to agree to ADR.
4. For that purpose the burden is on the unsuccessful party to show that the successful party’s refusal is unreasonable. There is no presumption in favour of ADR.
The Jackson ADR Handbook (2013, OUP, para 11.56) sets out the steps which a party faced with a request to engage in ADR, but which believes that it has reasonable grounds for refusing to participate at that stage, should consider in order to avoid a costs sanction. The advice includes:
1. Not ignoring an offer to engage in ADR.
2. Responding promptly in writing, giving clear and full reasons why ADR is not appropriate at the stage, based if possible on the Halsey guidelines.
3. Raising with the opposing party any shortage of information or evidence believed to be an obstacle to successful ADR, together with consideration of how that shortage might be overcome.
4. Not closing off ADR of any kind, and for all time, in case some other method than that proposed, or ADR at some later date, might prove to be worth pursuing.
In the recent case of Murray and another v Bernard  EWHC 2395 (Ch), the court considered the effect on costs of the claimants’ initial refusal to mediate, in circumstances where the claimants later agreed to mediate.
The defendant had argued that there should be no order for costs in favour of the claimants because the claimants had failed to take an opportunity or accept an offer to mediate. However, it was determined that although the Claimants had refused an initial offer to mediate, they had subsequently (and relatively speedily) changed their minds and agreed to mediate. However, the mediation did not take place because the Defendant then decided it was not ready to mediate.
The judge held that this was not a case in which it could be said that the claimants failed to mediate. They did not have one opportunity only to mediate for the purpose of the costs rule. A party may be penalised for a wrongful refusal to mediate because parties are not to be encouraged to refuse opportunities to settle cases. However, in this case, the claimants changed their minds and therefore they could not be criticised for refusing to mediate.
Although this case confirms that a delay in agreeing to mediate will not automatically lead to adverse costs consequences, it would be risky to assume that if a party initially refuses to mediate, but later changes its mind, this will have no effect on costs.