Geoff Sharp* There is anticipation building around what our civil courts will look like once we leave Alert Level 4 both next week and beyond. And there is a dawning realisation that “beyond” maybe longer than we think as the world lives with COVID for some years.
Will there be in person (suitably distanced) hearings, with judges and counsel and witnesses in the courtroom? Or will we adopt remote hearings where all the players participate online for some matters, or more realistically will the lasting legacy of all this be a hybrid model where some are in the courtroom and some are online… are some cases worthy of a courtroom, while others a computer?
COVID fallout will be severe, we can all agree on that. Disputes will flourish, not straight away but in the months, and in some cases years, after restrictions end. The pressure on our civil courts will come from a surge of cases resulting from global and domestic economic activity falling off a cliff and the recession widely tipped to follow.
Unlike the two previous surges – the leaky building crisis and Canterbury earthquakes – the deluge of cases this time will not be issue-specific – it won’t be water ingress and it won’t be physical damage – it will be a time-compressed range of commercial issues like we have not seen before – from leases to insurance claims and coverage disputes to construction to disrupted supply chains and more, and COVID legal issues will be remarkably similar around the globe.
So, whatever the success or otherwise of discrete out-of-court systems set up to deal with these previous crises (like the Weathertight Homes Resolution Service and Greater Christchurch Claims Resolution Service), it will not work this time but mediation will remain, as it has historically, a faithful workhorse in the aftermath of a national crisis.
COVID claims will primarily fall to the High Court which will have to find ways to deal with increased volumes as cases make their way through the system – it will take time for most businesses to asses claims and, like the earthquakes, the surge will take a while to manifest, but we will see it coming from the registry data.
The High Court’s Response
Along with rigorous scheduling, double/triple bunking to avoid wasteful holes in the court calendar as cases settle last minute, more directive case and issues management to deal with bloated proceedings and maybe even more courtrooms and more judges working more hours, mediation is an important piece of the puzzle to flatten the curve of the impending demand on our courts.
We know that a one or two-day mediation has the potential to resolve a dispute otherwise set down for hearing over weeks and sometimes months – mediators see it day in and day out. Two days of mediation for a ten-week trial is not unusual.
Mediation Will Assist (but now it needs help from the courts)
I have long been an advocate of keeping the courtroom and the mediation room entirely separate, leaving a mediation savvy profession in New Zealand to opt for mediation in appropriate circumstances. To be honest, that has historically worked at the top end of town, but there has always been a raft of mid-range civil cases that should be mediated but are not. This is where much of the pressure will be.
But COVID changes everything. These extraordinary times call for our courts to partner mediation, integrating mediation with the court’s own process and providing stick and carrot type incentives to mediate.
Certainly, mandatory mediation is not the answer but in my view a combination of judicial persuasion and cost sanctions is.
First, we need judges to (pro)actively consider the suitability of mediation during case management and encourage parties to consider it – often by accommodating a mediation window in the trial timetable. To some extent, and depending on the judge, this happens now but it needs to be given life and formalised. A consistent approach across the High Court is needed.
Second, if a party to litigation is invited to mediate and is found to have unreasonably declined, there should be cost consequences.
This combination of judicial prompt, ignored at one’s peril, together with the knowledge that declining an invitation to mediate from another party in the litigation will have cost consequences, is a measured approach suitable to the times.
In England, with pre-action protocols, the Civil Procedure Rules and the Jackson reforms all promoting the use of ADR, courts have repeatedly found a failure to mediate may constitute unreasonable conduct and therefore risks a negative costs award (the Halsey v Milton Keynes General NHS Trust line of cases).
In Halsey, the Court of Appeal identified six factors that may be relevant to the court’s consideration of a refusal:
(a) the nature of the dispute
(b) the merits of the case
(c) the extent to which settlement methods have been attempted
(d) whether the costs of the ADR would be disproportionately high
(e) whether any delay in setting up and attending the ADR would have been prejudicial, and
(f) whether the ADR had a reasonable prospect of success.
So, while mediation is not mandatory in England and Wales – and while there are views both ways on the wisdom of costs sanctions – if the trial judge subsequently finds that there should have been an attempt at mediation, costs consequences will usually follow – and that is whether the refuser won or lost. Singapore’s Supreme Court Practice Directions also provides for cost sanctions against a party unreasonably refusing to accept an ‘ADR Offer’.
More radical measures would not suit the New Zealand environment. They include mandatory mediation and an opt-out presumption, where all cases coming before the court are referred to ADR by default unless the parties opt-out (in the Singapore State Courts there is a “Presumption of ADR” which is responsible for the resolution of thousands of cases annually).
Proactive encouragement and imposition of costs sanctions, perhaps with a more nuanced reformulation of Halsey, is what our system needs right now.Report this
Geoff Sharp is a full-time international mediator, with a focus on the resolution of cross border disputes in Asia and Europe. Geoff is based at Maxwell Mediators, Singapore and Brick Court Chambers, London and Clifton Chambers, Wellington.He is ranked in Chambers UK Bar 2020 and is described by Who’s Who Legal as a “mediation megastar”. He has conducted mediations in Singapore, Korea, UK, Switzerland, Australia and New Zealand and prior to the COVID travel restrictions, two further mediations in Singapore in February 2020.
This article was first published by Geoff Sharp on LinkedIn
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