UK: The Court Of Appeal Mediation Scheme - The Way Forward?

Last Updated: 4 October 2012
Article by Lisa Kingston

Background to the Scheme

The Court of Appeal Mediation Scheme ("the Scheme") is an extension of a voluntary pilot mediation scheme that was introduced in April 2003 which was extended to apply to all contract and personal injury claims up to the value of £100,000 for which permission to appeal has been sought, obtained or adjourned. The Scheme has applied to qualifying claims since 2 April 2012 and is set to run for a year.

The Scheme was developed with the stated aim of reducing the number of claims below £100,000 reaching the courts in order that more court time can be devoted to larger disputes.

Lord Justice Rix LJ led the working group that was set up by the Master of the Rolls to revitalise the Scheme. He explained the rationale behind the Scheme in the following terms:

"Judges regularly see cases in the Court of Appeal which could easily have been resolved at an earlier stage through the use of mediation. Parties may not be poles apart, but litigation can have a corrosive effect for which mediation can provide a balm. Mediation in the Court of Appeal can save a great deal of money and anxiety."

How does the Scheme work?

The Scheme is managed and monitored by the Centre for Effective Dispute Resolution ("CEDR"), a London-based mediation and alternative dispute resolution body founded as a non-profit organisation in 1990 to encourage the development and use of alternative dispute resolution and mediation in commercial disputes. CEDR's evaluation of the Scheme will be considered by the senior judiciary.

Qualifying cases will, unless the judge orders otherwise, be recommended for mediation to CEDR. If the parties agree the recommendation to mediate, a mediator from the court-approved panel will be appointed by the parties. If agreement cannot be reached as to the mediator's identity, a mediator will be appointed from CEDR's own panel. The role of the mediator is to bring the parties together with a view to reaching settlement. If no settlement is achieved, the case will be referred back to the Court of Appeal for determination.

Will the Scheme be used in practice?

The key question is whether the Court of Appeal judges and the parties will abide by the spirit of the Scheme and order and agree to mediation respectively.

Until relatively recently, the Court of Appeal's reaction to the Scheme was uncertain. This is because the recommendation to mediate is not mandatory and the judge may therefore direct that the Scheme should not apply. A further unknown is whether there will be any adverse consequences for a party who chooses to ignore the court's recommendation to mediate.

Two recent Court of Appeal cases have shed some light on the uncertainty.

The Faidi case

Faidi v Elliott Corporation [2012] EWCA Civ 287 related to the enforcementof a covenant in the lease of a flat forreasons of neighbour noise. Judgmentwas handed down on 16 March 2012,slightly in advance of the Scheme beingintroduced.

Even at that early stage, Lord Justice Jackson's comments about the way in which the litigation had been conducted by the parties were instructive and he fully endorsed mediation as the recommended approach:

"This case concerns a dispute between neighbours, which should have been capable of sensible resolution without recourse to the courts. During the course of his submissions in the Court of Appeal, Mr Pearce for the Claimants observed that this may not be an 'all or nothing' case. A moderate degree of carpeting in flat 8 might (a) reduce the noise penetrating into flat 6 and (b) still enable the occupants of flat 8 to enjoy their new wooden floor. This is precisely the sort of outcome which a skilled mediator could achieve, but which the court will not impose.

Of course, there are many cases where a strict determination of rights and liabilities is what the parties require. The courts stand ready to deliver such a service to litigants and must do so as expeditiously and economically as practicable. But before embarking upon full blooded adversarial litigation parties should first explore the possibility of settlement. In neighbour disputes of the kind now before the court (and of which I have seen many similar examples) if negotiation fails, mediation is the obvious and constructive way forward.

In the present case a mediator would not have been concerned about the interaction between the various leases and the licence to carry out works. Nor would he have been concerned about the other interesting points of construction, which first the county court judge and now this court have been called upon to decide.

Instead he would have been helping the parties to find a sensible resolution of the practical problem which had arisen. I have little doubt that such a mediation would have been successful. The points of law upon which the litigation has turned are not easy ones and at the time of the hypothetical mediation neither party could have been confident of victory.

As it is, neither side wrote to the other proposing mediation until shortly before the hearing in the Court of Appeal. By then huge costs had been incurred."

The Ghaith case

Judgment in Ghaith v Indesit Company UK Ltd [2012] EWCA Civ 642 was handeddown on 17 May 2012 (aroundsix weeks after the Scheme wasintroduced) on which date the Courtof Appeal provided the first insightinto the level of support that it wouldprovide to the Scheme.

The case was a work-related personal injury claim. The employer was found to be liable for a back injury that was suffered by its employee during a stock take. The employee issued proceedings claiming £60,000 and the employer refused to mediate.

In providing permission to appeal, Lord Justice Toulson recommended the Scheme to the parties. At that stage, Indesit's advisers took the view that the costs already expended were greater than the value of the claim (as is common in claims of this size) and that mediation would not be cost effective. Indesit sought to limit any further expenditure and so declined to mediate.

Even though the appellate judges allowed the appeal, they criticised Indesit's refusal to mediate. In his closing remarks, Lord Justice Longmore added as a postscript that:

"It is a great pity that Indesit did not pursue the option of mediation rightly encouraged by Toulson LJ when hegave permission to appeal. Mr Peebles informed us that it was not pursued because the costs had already exceeded the likely amount in issue. This is an inadequate response to the Court's encouragement of mediation, since a full day in this Court will inevitably result in a substantial increase in costs. Indesit's reaction is all too frequent and the Court has, since April of this year, decided that any claim for less than £100,000 will be the subject of compulsory mediation. It is devoutly to be hoped that such mediation will mean that these comparatively small claims will not have to be adjudicated by this Court so frequently in future."

In the same case, Lord Justice Ward LJ added:

"I fully endorse Longmore LJ's postscript. When this Court grants permission to appeal, it does so because there is a real prospect of success. That does not mean that the appeal will succeed, but it does mean that the appeal is by no means hopeless. That should tell both parties that there is still all to play for. If they have any sense, they will therefore heed a recommendation to mediate because the costs of mediation are likely to be exceeded by the costs of the appeal by a significant margin. It is not enough, as Mr Peebles [counsel for Indesit] suggested that there had been some attempt in the correspondence between solicitors to settle the case. The opening bids in a mediation are likely to remain as belligerently far apart as they were in correspondence, but no one should underestimate the new dynamic that an experienced mediator brings to the round table. He has a canny knack of transforming the intractable into the possible. That is the art of good mediation and that is why mediation should not be spurned when it is offered."

Conclusion

As can be seen from the Faidi and Ghaith cases, the early indications are that the Scheme has the full backing of the Court of Appeal which has little sympathy for those parties who decline to mediate when mediation is recommended. Its commitment to tackling litigation cost by advocating mediation is clear, so if in doubt, you should mediate.

Some might find the Court of Appeal's enthusiasm for mediation surprising. This is because a number of cases that come before the Court of Appeal may well have had failed mediations previously (provided, that is, that mediation was proposed by one of the parties) and for such cases the positions of the parties might have become too entrenched for mediation to be successful. However, this has not proved to be the case. Studies have confirmed that the Scheme has actually achieved a settlement rate of 66 per cent since its inception in 2003 and the message seems to be, therefore, that it is never too late to mediate.

It remains to be seen what impact the Scheme may have on litigation cost. In the Ghaith case, the appeal was allowed and the matter was referred back to the County Court for a decision on the level of damages that should be awarded. Therefore, no costs were awarded as a result of the parties' failure to adhere to the recommendation to mediate. However, the discretion to award costs remains and it will be interesting to see how costs will ultimately be allocated by the County Court which may take Indesit's failure to mediate into account when it considers the question of costs.

Looking at the Scheme overall, its purpose is to reduce litigation cost and increase the certainty of any final result (i.e. by agreement as opposed to imposition by the court) and therefore it has to be welcomed.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Lisa Kingston
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.