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Alternative Dispute Resolution and the Irish Commercial Court.

How India can learn from the Irish experience?

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An article in the current issue of the Arbitration and ADR review, Alternative Dispute Resolution and the Commercial Court, written by the judge in charge of the list, Mr. Justice Peter Kelly, gives an interesting insight into the history, role and effectiveness of mediation in the Commercial Court. When the court was first established over six years ago, the rules provided that the proceedings could be adjourned for 28 days to allow the parties engage in the process of mediation, conciliation or arbitration. It appears that mediation has been the most utilised and popular ADR process to date.

We learn from Mr. Justice Peter Kelly that the wording for the rules was chosen carefully, after considerable consultation and principally with judges and practitioners in the Commercial Court in Belfast, London and Edinburgh. The Commercial Court in London has been in existence for well over 100 years. The judges and practitioners in these jurisdictions were all agreed on the importance of the voluntary nature of the alternate dispute resolution process, that you cannot force litigants to go to mediation and if you do, it may not achieve the desired result.

Six years on, every practitioner in the Commercial Court now knows how the rules operate and in all likelihood on the application to have the matter entered into the list or at the next directions hearing, the court will be informed that the parties have agreed to engage in mediation. The court will then want to know the name of the mediator and the date of the mediation.

The Question of When to Refer to Mediation?

Judge Kelly writes that there is no hard and fast rule here but his experience over the last six years in the Commercial Court seems to indicate that the parties stand a better chance of a successful mediation if the referral takes place subsequent to the delivery of pleadings and before discovery of documents. In disputes involving family members, that might be a typical Section 205 application under the companies acts, Judge Kelly has found that the earlier the parties are sent to mediation the better.

On The Standard of Mediators

Mr. Justice Kelly notes that the standard is very good, but highlights two particular problems. One, “in some cases persons are being chosen as mediators who had no formal training in the art. They do not have an appreciation of what mediation is about. Very often they do more harm than good and just add an additional layer of costs because the mediation will not be successful. These cases are becoming fewer because practitioners appreciate that if the mediation is to be successful, a trained and preferably an experienced mediator is much more likely to achieve success than one who is not.”

The other problem that arises is that some mediators have become very popular, their services are in demand and they may not be able to facilitate the parties. However, on certain occasions when this arose, the Commercial Court was in a position to offer a trial of the action faster than the mediator could arrange the mediation.

Recent Cases Involving Mediation in the Commercial Court

In 2009, there was a substantial increase in the number of cases seeking entry into the commercial list, 373 and the average time between entry into the list and the conclusion of the action is 21 weeks. According to Commercial Court statistics, 25% of cases are concluded in less than four weeks with 50% of cases finishing in less than 15 weeks and 75% of cases are brought to an end in less than 32 weeks. 90% of commercial Court cases are concluded in less than 50 weeks.

The Commercial Court statistics contrast sharply with the courts in India, where it will be 2330 by the time Indian courts, working at their current pace, clear the extreme backlog of cases that exists today. This interesting observation was made by Indian Justice V.V. Rao in an address on E-Governance to the judges there. Mr. Justice Rao painted a very bleak picture going forward and said the system must change if they are to reduce the backlog within the next 320 years. The judges in India have been encouraging litigants to look towards alternative dispute resolution but progress has been slow.

Mr. Justice Rao said that the average caseload for each judge is in or around 2,145 cases and given the amount of cases settled through mediation in Bangalore and Delhi alone, this would relieve eight judges of all the cases in their hands right now. This is just the start in the relief that mediation can allow for the justice system. The next step is to take mediation to the district levels in each state, which will hopefully further reduce the backlog of 320 years.

The first case in the Irish Commercial Court involving mediation was in 2005, it concerned a commercial property dispute which had been long-running and bitter. It was brought to an end within three weeks of being referred to mediation.

The case of The Dubliners (Baycourt) Limited and Ors v. EMI Records Ireland Limited was entered into the Commercial Court list on Monday, 13th November 2006. It was adjourned on that occasion to allow mediation to take place, the mediation was successfully completed on Thursday 16th  November, 2006. This case probably holds the record in that within three days of the case being entered in the Commercial Court, the mediation having been successfully completed and the agreement reached between the parties.

Also mentioned in the article is a case involving Carlow County Council and Nesselside Builders Ltd which on the suggestion of Mr. Justice Kelly was referred to mediation. It involves a dispute over a small piece of land but that was holding up the completion of a major road development. The mediation was successful and accordingly avoided lengthy and expensive litigation.

It is now widely expected that similar rules to the Commercial Court will  be introduced in the High Court in November 2010, The Rules of the Superior Courts (Mediation and Conciliation) 2010, introducing a new rule 56A. On the 2nd March 2010 the Chief Justice John Murray, speaking at the Dublin Solicitors’ Bar Association launch of its family mediators group, said that mediation “is in a sense an antidote to a too casual recourse to litigation not only as a first but as the only option.”

Since January 1, 2010, we have the Circuit Court Rules (Case Progression (General), 2009. Case progression is a relatively new mechanism used by the courts. These rules facilitate the progression of the case to ensure that proceedings are prepared for hearing in a manner which is just, expeditious, economical and that court resources are employed optimally. Section 7 of these new rules enables the Judge or County Registrar, or one of the parties on application, to adjourn proceedings and invite the parties to use mediation.

The Multi-Units Development Bill, 2009 – This proposed new Apartment Management Company Bill will change the way disputes are handled for over 500,000 members of apartment management companies, investors and tenants. On the application by a party at any stage in the proceedings, the Court may refer the parties to mediation. Recent changes to the Bill at Report stage  in the Dail, will provide that the Court of its own motion can issue a direction to the parties to engage in mediation.

Further developments expected in December 2010 or perhaps early 2011Free Web Content, will be the Law Reform Commission Report on ADR  and a new Mediation ADR/ Bill. There will be pressure on the government to have this legislation enacted before 21st  May 2011 to comply with the European Directive on Mediation. The EU Directive was adopted by the European Parliament in 2008 and seeks to encourage the use of mediation in civil and commercial matters regarding all member states of European Union.

Brian Walker BL

October 2010

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