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27 September 2016
A recent High Court decision(1) reaffirms that not all cases are appropriate for mediation. Although the Irish courts are supportive of mediation and recognise the benefits that it may bring in the context of a commercial dispute, the court rules pursuant to which proceedings may be adjourned to facilitate mediation(2) (and arising from which, potential cost consequences may flow from an unreasonable refusal to mediate) will not always be invoked. In considering whether to make an order pursuant to the relevant rule, various factors are relevant to the exercise of the courts' discretion.
The proceedings have a lengthy history (originally commencing in 2003), in respect of which some 50 reliefs were sought regarding various matters from 1997 onwards. The plaintiffs were boat and ship operators at various locations on the Atlantic coast and had challenged decisions taken by government officials in relation to vessels owned or operated by them. The nature of the business meant that the plaintiffs were subject to regulations which involved, among other things, the application of EU law. Allegations were made in the proceedings that a series of decisions made by the first named defendant, his servants or agents were made either unlawfully or unjustly, unfairly, discriminatorily or in breach of European law (of both the European Union and the European Convention on Human Rights). The plaintiffs advanced claims in respect of misfeasance in public office, tort, breach of rights (including constitutional rights) and European law.
The proceedings were well advanced, with discovery having been made, and it was accepted that the action was ready to be set down for trial to obtain a date for hearing. In response to the plaintiffs' request for mediation, the applicants' considered response was that it was not a suitable case to be mediated. Subsequently, a motion was issued pursuant to Order 56A of the Rules of the Superior Courts.
In support of their application, the plaintiffs contended that there would be a considerable saving of court time, costs and expenses if a lengthy trial could be avoided. Notwithstanding this, many declarations were sought (including that an EU directive had not properly been transposed into national law). The plaintiff still contended that the proceedings could be disposed of by way of mediation because it was inherent in the agreement to submit the entire proceedings to mediation that a resolution, if reached, would not require such reliefs. The plaintiffs also contended that the parties would have ongoing dealings with each other in relation to operations into the future and, in that context, mediation was attractive.
The defendants rejected this and in their view explained why the long-running proceedings were not suitable or appropriate for mediation. First, reference was made to delay in the proceedings. Second, it was noted that the claims advanced made very serious allegations against public officials amounting to claims of misfeasance in public office which were inappropriate for mediation, and equally the declaratory reliefs sought were also not appropriate for mediation. Further, the allegations were wide-ranging and spread over a number of years, involving a number of vessels and therefore the mediation itself would be a lengthy process. The defendants felt that a split trial was a more appropriate way to determine the issues in dispute.
Judge Costello recognised her jurisdiction to make the order sought and referred to Atlantic Shellfish Ltd v County Council of Cork,(3) where the benefits of mediation had been extolled. However, in that case it was acknowledged that mediation is a two-way process and a party ought not be forced to attend mediation if a bona fide reason is set out as to why mediation is unsuitable and a court should not make an order inviting the parties to further consider it. The Court of Appeal confirmed this on appeal,(4) where Judge Irvine pointed out that the court should exercise its discretion only if it considers it appropriate to do so, having regard to all of the circumstances of the case. She recognised that, in the first instance, the court must be satisfied that the issues in dispute between the parties are amenable to the type of alternative dispute resolution proposed and that it is capable of determining the issues.
Costello stated that she was not satisfied that the multitude of issues involved in these proceedings were amenable to mediation. She felt that the plaintiffs had not indicated any areas of contention or parts of the claim which might be resolved or narrowed in the context of mediation. With regard to the contention that the claim might be settled in full, she noted that the nature of certain pleas meant that either the plaintiffs or defendants would need to entirely abandon their position. Although she accepted that this was not impossible, in circumstances where those positions had been maintained for 13 years she felt that it was a matter of considerable weight in the exercise of the court's discretion. She also noted the defendants' submission that by virtue of the number of issues in dispute, mediation was unlikely to succeed and would be both lengthy and costly. She observed that the late timing of the application in the context of the proceedings, where discovery had been undertaken and the matter was ready for trial, was contrary to the courts' experience of when proceedings are most likely to be resolved by mediation. She also felt that it was not unreasonable for State defendants to maintain their entitlement to have claims of misfeasance in public office be resolved in court and, if successful, their position vindicated.
Ultimately, she concluded that the issues in dispute were not amenable to being disposed of by way of mediation and the defendants' opposition was entirely bona fide.
No new legal principle was involved in this case, but it serves as a useful reminder that not all applications to the courts to facilitate mediation will be successful. In the exercise of the courts' discretion, various factors are relevant and these should be taken into account by any party considering whether to bring an application. The extent and nature of the reliefs sought, the allegations made and the stage in the proceedings at which the application is being considered are all factors that will influence the exercise of the court's discretion.
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