Mediation in the wake of Coronavirus – Court Guidance & Cabinet Directives

2020 mid-winter storms and flooding to the ever emerging threat of COVID-19, court closures and social distancing. If recent WHO announcements and the previous Sars epidemic teach us anything, we are all in this very much for the long haul. Lord Burnett of Maldon, the Lord Chief Justice, has made it clear that the court system will never again operate as it did before the Coronavirus pandemic. Lord Neuberger of Abbotsbury, a former President of the Supreme Court, also appeared on Radio 4’s Today programme encouraging parties to consider mediation. We will all have to acclimatise to change and new working practices.

We have all seen multiple headlines about Virtual Justice and Remote Hearings. Technology certainly has been pushed to the fore not least in world of Mediation where the use of ZOOM Pro has become the industry standard and default platform for ONLINE Mediation.

In the wake of Coronavirus there has been a string of three cases in 2020 in which the parties who refused to mediate were financially penalised by the courts, laying down a marker for more stringent times ahead. Indeed as the Law Society has commented recent cases have provided “a very real economic incentive for parties to say ‘yes’ to mediation, because the price of saying ‘no’ has become rather costly.”

Cases Post PGF II

Litigation Solicitors will be fully familiar with PGF II which is embedded in the court and pre-action practice landscape. PGF II itself came within the wake of a number of previous cases. With each new tranche of cases has come increased emphasis on the use of ADR.

Amidst the clamour for the revival of the football league season another Football Club entered the legal arena and received a scolding at the hands of the courts. For local football fans fortunately this was neither Southampton FC nor Portsmouth FC but rather a more distant northern cousin.

In DSN v Blackpool FC [2020] EWHC 670 (QB) which concerned a somewhat delicate matter involving a football scout, a claim for sexual abuse and vicarious liability, Mr Justice Griffiths stated: “No defence, however strong, by itself justifies a failure to engage in any kind of alternative dispute resolution” echoing the words of the Court of Appeal in N J Rickard Limited v Holloway & Anor [2015] EWCA Civ (unreported) where the Court of Appeal observed that “no dispute was too intractable for mediation.”

DSN v Blackpool repeated the earlier observations of Sir Geoffrey Vos C in OMV Petrom SA v Glencore International AG [2017] EWCA Civ 195 at para 39 where he stated: “The regime of sanctions and rewards has been introduced to incentivise parties to behave reasonably, and if they do not, the court’s powers can be expected to be used to their disadvantage. The parties are obliged to conduct litigation collaboratively and to engage constructively in a settlement process.”

In the somewhat more wordy and certainly more harrowing case of BXB v (1)Watch Tower and Bible Tract Society Of Pennsylvannia and (2) Trustees of the Barry Congregation of Jehovah’s Witnesses [2020] EWHC 656 (QB) an indemnity costs award was likewise meted out for a failure to engage in ADR. Similarly in Wales (t/a Selective Investment Services) v CBRE Managed Services Ltd & Anor [2020] EWHC 1050 (Comm) which concerned pensions and commissions, a costs sanction was imposed for refusing to mediate.

The tide is certainly turning strongly in favour of mediation as the go to platform for parties and solicitors alike and a number of commentators have referred to this being a watershed moment although the writing has been on the wall for some time.

In Thakkar v Patel [2017] EWCA Civ 117 Lord Justice Jackson at para 31 stated: “The message which this court sent out in PGF II was that to remain silent in the face of an offer to mediate is, absent exceptional circumstances, unreasonable conduct meriting a costs sanction, even in cases where mediation is unlikely to succeed. The message which the court sends out in this case is that in a case where bilateral negotiations fail but mediation is obviously appropriate, it behoves both parties to get on with it. If one party frustrates the process by delaying and dragging its feet for no good reason, that will merit a costs sanction. In the present case, the costs sanction was severe, but not so severe that this court should intervene.”

More sanctions for the unwary will certainly follow. It has become increasingly clear that judicial efforts to get parties to negotiate rather than litigate have moved away from the carrot towards the stick. Commentators have described it as a “relentless push towards mediation.”

Cabinet Office Guidance

On 7 May 2020 the Cabinet Office issued Guidance directed at both public authorities and private enterprise as to the conduct it would expect in relation to disputes arising out of contracts in the wake of the Coronavirus epidemic. Parties are specifically required to engage in “responsible and fair behaviour” which includes “requesting and responding to requests for mediation” (See Para 15).

As the Directive further states at Para 17: “The Government would strongly encourage parties to seek to resolve any emerging contractual issues responsibly – through negotiation, mediation or other alternative or fast-track dispute resolution – before these escalate into formal intractable disputes.”

There is both judicial and political will to bring about a new way of doing things whether through telephone or video hearings or pro-active encouragement of negotiation and ADR.

There are already significant court backlogs and in a socially distanced world cases will invariably take longer. Parties will be required to make genuine attempts to resolve their dispute and are likely to face tougher court sanctions if they do not. His Honour Judge Bird said that parties will be expected to “make all sensible efforts” to avoid trial. Within the wake of the above cases Offers to Mediate have even been referred to as “the new costs weapon.”

Coronavirus has descended upon us clothed in a cape of fear and uncertainty, disruptive, climactic, foreboding, ushering in a sea of change but also promising opportunities for transformation.

Mediation may help you shoulder the burden of client needs and expectations and move forward to a brighter and more productive future. ■

Russell Evans

Mediator

Mediation Expert of the Year in the United Kingdom – GAE Award 2020