By: Deborshi Sarkar and Anirudh Krishna
(This post is the second of a two part series on the topic – ‘Mandatory Mediation: an Oxymoron?’)
In Part 1 of this series the authors analysed the issue of voluntariness that surrounds the ‘mandatory pre-litigation mediation’ clause in the Mediation Bill, 2021 (hereinafter ‘the Bill’) and argued how it infringes upon voluntariness to a permissible extent. In this Part 2 of the series, the authors further build upon their argument for the same.
Under this form of compulsory mediation, courts or tribunals may retrospectively penalise parties using adverse cost orders, if parties unreasonably recant from the mandatory formal meetings at the initiation of the mediation proceedings. Consequently, such schemes can be classified as ‘quasi-compulsory’. Here, mediation is not necessarily mandated, but the court or tribunal retrospectively penalises a party by way of adverse costs if meditation is not instituted prior to commencement of court proceedings. When a party fails to cooperate, irrespective of the success of the claim, cost sanctions can be imposed by the court. The quasi-compulsory nature of mediation has also been sustained in the Bill under section 20(2) , where, if a party fails to attend the first two mediation sessions without any reasonable cause, the court is authorised to, in subsequent litigation, to take into consideration the said failure to attend and impose cost sanctions. The key argument expounded for such schemes is that the differences between the disputing parties are dexterously identified due to the desirability of cooperation when there is a fear of cost sanctions. However, voluntariness being the essence of mediation, various proponents of mediation decried that the order of cost sanctions abridged the will of parties, who, though not interested in mediation, were being compelled to opt for it. In this given backdrop, it is of essence to explore the extent to which voluntariness is curbed in quasi-compulsory mediation.
Inference can particularly be drawn from the English jurisdiction to portray the impact of quasi-compulsory mediation on the voluntariness of parties. Under r. 44.2 of the Civil Procedure Rules, 1999 (UK) the English courts have recognised a discretionary power to pass retrospective cost sanctions after assessing the reasonableness of a party’s unwillingness to in Dunnett v Railtrack Plc. The Court of Appeal dealt with this issue of alteration of voluntariness in quasi-compulsory mediation in the case of Halsey v. Milton Keynes General NHS Trust and held that a court couldn’t compel unwilling parties to mediate. The court added that such compulsion would be in contravention of Article 6 of the European Convention on Human Rights (hereinafter ‘ECHR’), or would infringe a fair trial. Nonetheless, instructing parties to opt for mediation was allowed by the court. The Court of Appeal in the subsequent case of Rolf v. Guerin, laid down two important pointers which were in line with the observations made in the Halsey case. Firstly, unreasonably refusing to agree to mediate would invite cost sanctions. Secondly, the interpretation does not contravene Article 6 of the ECHR. Indirectly compelling parties to mediate with a fear of cost sanctions cannot be equated to compelling unwilling parties to mediate and reach a settlement. It is rather an instruction by the courts to the parties to opt for mediation, especially considering the fact that in case of failure of mediation, the parties can, out of their own volition, leave and proceed with litigation. It is imperative to understand that the existence of quasi-compulsory mediation indwells in the scheme of sanction in the form of adverse cost orders.
The quasi-compulsory nature of mediation posited under section 20(2) of the Bill is comparable to the legislations of England. The provision cannot be considered to be compelling parties to settle as, via Section 20(1), a party has complete liberty to withdraw from mediation after the conclusion of the first two mediation sessions. Further, the provision only aims at instructing the parties to mediate and if a reasonable cause to not institute mediation can be shown, the parties can directly proceed with litigation. The provision can seek support from the observations made by the Court of Appeal in the English case of Bradley v. Heslin, where a thin line of difference between compelling parties to mediate and requiring/instructing parties to attempt mediation under threat of cost sanction was observed by the court. Since Section 20(2) of the Bill provides an opportunity to parties to show a ‘reasonable cause’ to not institute mediation, the Bill essentially retains the quasi-compulsory nature of mediation it aims to introduce.
After examining the experience of mandatory mediation in other jurisdictions, it can be asserted that a pre-litigation form of mandatory mediation would be beneficial for India in the long run. Besides acting as an effective Alternative Dispute Resolution (hereinafter ‘ADR’) scheme, mediation has the potential to significantly reduce the burdens of the civil courts in India. Certain essential provisions in this novel Bill include the creation of mediation training institutes for the training of mediators and forming mediation service providers. These would enhance the legal health of the country besides revamping the quality of mediation in India. Concomitantly, other forms of ADR must be emphasised equally rather than upholding mediation as a panacea for the overcrowded judicial system in India. Mandating mediation before approaching courts in civil matters would augment and re-establish communication between parties thereby resulting in a communicated and informed mediated agreement. This can be considered as being beneficial rather than being bound by an unsatisfactory order of the court. It can safely be assumed that mandatory mediation is set to bring a paradigm shift to our perception of courts being the first stop for dispute resolution.
Cite as: Deborshi Sarkar and Anirudh Krishna , ‘Mandatory Mediation: an Oxymoron? (Part 2)’ (The RMLNLU Law Review Blog, 1 June 2022) <https://rmlnlulawreview.com/2022/06/01/mandatory-mediation-2/> date of access