Address by The Rt Hon the Lord Woolf

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2013-10-10

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SINGAPORE MEDIATION LECTURE

 

Mediation: The Way Forward

Address by The Right Honourable the Lord Woolf

10 October 2013

 

1. Introduction

I am delighted to be visiting Singapore again. Once more, I have to thank my hosts on their exceptional hospitality.

On this occasion my special thanks are due to the Singapore Mediation Centre (SMC) and its Executive Director, Mr Loong Seng Onn and Ms Sabiha Shiraz. They met my wife and I at the airport and ever since, our every wish has been cared for.

I would also like to say a special thanks to three friends who are members of the Chief Justice’s Club who have honoured me greatly by being present: CJ Yong Pung How, CJ Chan Sek Keong and CJ Sundaresh Menon. They are each outstanding jurists who my wife and I regard together with their wives as personal friends. They can claim a great deal of the credit for Singapore’s enviable record for being among the foremost dispute resolution hubs in Asia and beyond.

I would also like to mention Judge Tan Siong Thye, who I warmly congratulate on his appointment as Judicial Commissioner, under whose inspired leadership, the Subordinate Courts have thrived. On a previous visit, he took a substantial risk in asking me to give a series of talks to his Judges. I am somewhat surprised that despite this, I have been invited back. Perhaps someone failed to carry out adequate due diligence.

I am particularly glad to be giving this address in a year in which, in accordance with its work plan, the “mission” of the Subordinate Court is to enhance the contribution that mediation could make to justice in Singapore. I strongly endorse the remarks that CJ Menon made in launching the work plan of the Subordinate Courts for 2013. He stated that “access to justice can and should be enhanced by both access to the courts as well as access to the mechanisms for reaching consensual outcomes outside the courts.” He added that enhancing justice is “multi-faceted”; that courts need to work with stakeholders, communities and the public to develop and strengthen the avenues of justice that are available both within and outside the court system.

This very much accords with the spirit of the recommendations in my report to which the Chairperson of SMC, Justice Belinda Ang, referred in very generous terms in her introduction, which I greatly appreciated.

My report in 1996 advocated a change in culture and I am delighted that change has since become part of many systems of justice around the globe, including Singapore. Though I emphasise that in relation to Singapore, it was two-way traffic. We learnt at least as much from you as you have learnt from us.

There are two other things that I should make clear about that report. The first is that while at the time it was intended to provide a comprehensive programme of reform for the Civil Justice System of England and Wales, it was not intended to provide a recipe for all time. It was directed to the situation that existed at that time. It was no more than a chapter in what I hoped would be a continuing programme of reform. It was my hope that it would be revised and refreshed from time to time in accord with current experience.

However, my recommendations reflected principles which are encapsulated in Part 1 of the Civil Procedure Rules. These are as relevant today, as when they were first presented. Though the principles have to be applied to the very different world by which we are now confronted – a world that is of far greater complexity; a world in which there is infinitely greater international activity; where there are many more global companies than a decade ago.

Today, both the business world and individual members of the public have expectations of what a justice system should provide. These expectations have expanded dramatically from a decade ago. The bar is now set much higher and if countries which, like our own, want to be at the forefront in meeting those expectations, it must continually improve its performance.

This is what I believe Singapore has been doing.

These are not words just designed to flatter my hosts. Until a few months ago I was President of a Civil and Commercial Court in Qatar. I had been responsible for creating that Court. There were many areas of that process in which I needed assistance. They stretched from designing and making the robes but not wigs that the judges wear in court, to assisting with the Court’s IT. Singapore was usually our first port of call for assistance and my requests never went unmet.

I would be very surprised if the practitioners and the courts of Singapore do not meet the challenge they have been set by CJ Menon as to mediation.

There is already a success rate of 87% in the cases before its courts that are mediated. That impressive statistic is one that already reflects well on the achievements of my generous hosts at the SMC. I believe you have achieved a situation where a greater proportion of domestic civil disputes are resolved successfully here by mediation than anywhere else. This indicates you have approached this task with the commitment and thoroughness that I have come to expect from your legal institutions. The success you have had in mediation would have been much more difficult to achieve if you did not have a first class legal system.

Despite this, I hope that what I have to say is still of some relevance to this audience, though I appreciate that it will not be the last word on the subject. I am aware that your Chief Justice has established a distinguished International Working Group that will be reporting in the near future on this subject. Wisely in determining the way forward, you are adopting an approach that is researched-based. This is an approach to achieving change which, if it had not been adopted already, I would have strongly recommended.

One of the core recommendations in my report, “Access to Justice” was that the role of the judiciary should no longer be limited to conducting trials in a way which almost inevitably drive the parties further apart. Instead, the judge throughout the litigation should be looking for ways of reducing the areas of dispute, and in this way, promoting more proportionate litigation. That is litigation that is more efficient, less expensive, more expeditious and consensual. Alternative dispute resolution, and especially mediation, is an important part of this approach and so it is said that my report acted as a catalyst for the development of mediation. Certainly it led to an increase in the use of mediation. Up to that time, the use of mediation had been very limited.

However, while there has since been growth in usage as it started from a low base point, enthusiasts such as myself as well as those in Singapore were disappointed that the rate of increase in mediation has not been as rapid as we had hoped. This situation has continued to this day.

Despite encouragement from the judiciary and a solid core of ardent supporters, use has remained sluggish across the broad range of litigation in most jurisdictions. This is a worrying situation because greater use would have made a significant contribution to dispute resolution.

In order to identify the causes of this and ascertain what should be done to improve the situation, it is important to understand the basic distinction between litigation and mediation.

2. The difference between mediation and litigation

When I refer to “litigation” I mean civil as opposed to criminal litigation, [although in many jurisdictions the dividing line between them is increasingly blurred]. I am also primarily focusing on substantial disputes with a commercial and international flavour. Different considerations can apply to small or family disputes.

For present purposes, in most jurisdictions, “litigation” can be described as the process established by legislation, having the force of law that a state provides for resolving disputes in its courts. If it runs its course, litigation will usually culminate in a trial before an independent judge appointed by the stte and (subject to any appeal) in a final judgment.

Mediation on the other hand, is also a process for resolving disputes.

While it may be recognised and supported by law, it is not usually established by law. Instead, it is primarily a consensual process established by an agreement between the parties, with the purpose of trying to resolve a dispute. This is accomplished with the assistance of an independent neutral mediator jointly agreed by the parties. The mediator can be, but need not be, a lawyer.

The mediator will usually decide on the procedure to be followed in consultation with the parties and their advisors. If the parties in the course of the mediation reach an agreement as to how the dispute should be resolved, this does not constitute a judgment. It has no greater status than any other contract entered into by two individuals. The mediator will normally assist the parties to set out in writing the terms which the parties have agreed. If no agreement is reached, that is the end of the process and what happened during the mediation cannot be relied on by either party without the consent of the other. In this, it resembles a “without prejudice” negotiation and is confidential. Hence, it cannot unilaterally be relied on by the parties in subsequent litigation. It is the confidentiality that also binds the mediator. If there is an agreement, unlike a judgment it cannot be directly enforced. Instead, if it is not observed by one of the parties, it has to be enforced in a separate action.

The success of the process is very much dependant on the skill and the creativity of the mediator.

I apologise for going into matters which will probably be well known to everyone present. However, this consensual nature of mediation is of critical importance to a proper understanding of my approach to mediation.

3. The advantages and disadvantages of mediation

The advantages of mediation include:

a) The process can usually be completed in a day and is almost invariably quicker and less expensive than litigation.

b) Unlike litigation, it is not likely to damage any pre-existing relationship between the parties.

c) It can produce a result that would be beyond the powers of any court to order. As long as the parties have agreed on the solution, it does not matter if the terms depend on matters quite outside the original dispute.

d) If it is successful and ends in agreement it reduces the demands on scarce court resources.

e) Even if it is unsuccessful, it can reduce the complexity of the dispute and lead each party to understand more clearly the case of the opposing party.

f) Unlike litigation, a party can strictly confine the costs of mediation and not allow him or herself to be sucked into an extremely expensive process over which he can lose control.

The disadvantages of mediation are:

a) Unless it is successful, it results, even if modest, in wasted expense and delay.

b) It usually requires a party who would be wholly successful, if the litigation continued, either to compromise partly on his or her legal entitlement or to provide some benefit to the other party that he would not otherwise be obliged to offer.

c) It can be weighted against the weaker party who may not have the financial muscle to stand out against the stronger party. Though a skilled mediator should guard against this.

d) It takes place behind closed doors, which is always undesirable. In the absence of a judgment, it may, in my opinion mean the development of the law is prejudiced.

e) At best, it produces only an agreement that cannot be directly enforced. This may create problems particularly in the case of international disputes.

My own view is that the advantages of mediation far outweigh the disadvantages. This is self-evident except, perhaps, in the case of foreign enforcement. While it is true the agreement will not be directly enforceable, it should only be rarely, that the agreement which should have been freely entered into with the assistance of a mediator, disowned. Further, like any other agreement it should be easily capable of being converted into a judgment in proceedings that it will be difficult to contest. Then that judgment will be at least as enforceable as any other judgment.

The fact that the process is consensual means that the parties are, and in my opinion should be, able to substantially influence:

  • When the mediation should take place, how long it continues for and the fees of the mediator.
  • Who should be the mediator and how the mediation is conducted?
  • Its scope, i.e. should it cover the whole of the issues that divide the parties or only some. For example, should it cover only liability or quantum?
  • Should it be a one-off event or a continuing resource to which the parties can, for instance, continually have recourse when ever disputes arise?

This can be very effective, for example, in the case of a large engineering contract when it is important that the progress of a contract is not interrupted.

This brings me to one matter of real concern that I would like to see addressed, and which is already beginning to receive attention in many jurisdictions. It is the lack of sufficient independent regulation of both the process and mediators. Without this, I fear it is inevitable that sooner or later, allegations of abuse are bound to arise. This could be extremely damaging to the positive image of mediation. The reputation is part of the explanation of its growth, and I am surprised that there have not been, at least to my knowledge, allegations of abuse.

There needs to be suitable screening as to who can properly be entrusted with the very considerable powers of a mediator. Where parties are competently represented, the lawyers for the parties should be able to fully protect their clients’ interests. While recognising this, I do still believe that there is a need for the market to be properly overseen. In the UK, anyone can set up as a mediator. No training or qualification is required. Too often there are possibilities of conflict. Those who provide and train mediators should consider whether it is also appropriate for them to be marketing their own directors as mediators in conflict with those who they have accredited.

There is a need for the continual appraisal of mediators who are accredited. It would be desirable if a sufficiently robust disciplinary process were to exist. Until this happens, some lawyers are going to advise their clients the risks involved in mediation are unacceptably high. I am confident that the Working Group will be considering this delicate problem in much more detail than I have been able to do here, and their proposals will be carefully considered by all those involved in the justice process. What matters is not whether the regulation is statutorily imposed or self imposed. What matters is that it is, and is generally believed to be effective.

Before I leave this subject I should disclose I have from time to time been a consultant of the International Mediation Institute (IMI), who I regard as being in the forefront of devising proposals to deal with these issues. The task is far from an easy one. For centuries there have been individuals who are formidable natural mediators who are totally unqualified but accepted as being masters of the art. This is the case, whether it is a dispute between neighbours or nations. When we talk of regulation we must bear in mind that the present situation has the virtue that it lets individual skills flourish. Whatever the nature of the regulation, it should be no more restrictive than the protection of its good reputation.

Just before I left England to come here, I attended the 80th birthday party of the Lord Griffiths - who some of you may know - is one of these outstanding natural mediators. He has a formidable reputation in the UK for his abilities, and any suggestion to him that he should receive training or that he should be mentored in any way would be regarded by him as an outrage. He knows that he has got these magnificent eyebrows, and he just needs to raise those eyebrows to achieve all that is necessary in the course of a mediation. Our duty, all with eyebrows of that sort, is considering regulation.

As Michael Leathes, a director of IMI, and I jointly agreed in 2010;“Mediation has come a long way but still has further to go. The field now needs to evolve quickly into a true profession. High minimum practice and ethical standards need to be set, made transparent and achieved internationally. Users of mediation need to see these standards operating effectively. More and better information needs to be made available by individual mediators about their skills, capabilities and personalities. Quality and transparency together will enable mediation to grow.”

4. Should mediation be compulsory?

One of the issues that has worried mediators and others is whether it should be compulsory.

Over a decade ago when I was conducting my inquiry into Access to Justice, among the countries I visited were Australia and the United States. Both of these countries’ experience of mediation were much greater than that of the UK.

I was urged in both jurisdictions that a sufficient use of mediation would only be achieved if it were made compulsory. It was their experience that great benefits flow from this. Certainly the statistics were impressive. In some states, the majority of cases were compulsorily sent for mediation and most resulted in settlement. This provided the benefits to which I have referred. However, this was at the cost of the right to have the dispute resolved by a court. It is true that in practice this was, at least in a number of States, more of a theoretical then an actual deprivation and was mainly due to the scale of the backlogs on their court civil lists. Frequently this was because of the volume of criminal cases awaiting trial. This meant that in practice, there was little hope of having a civil case heard within any remotely acceptable time scale as only a trickle of civil cases were in fact reaching a hearing. It was a case of making a virtue of necessity. 

In the UK, court administrators would always welcome a reduction in their list of outstanding cases through the referral of parties to mediation, which then resulted in settlements; but this was by no means a necessity. (I understand a similar situation exists here in Singapore). So I was reluctant to go down the route of compulsory reference to mediation and did not recommend it. Great weight must be attached to the individual’s right of access to a court. I urged the judiciary to encourage litigants to mediate whenever it is appropriate, but not to order its use or to make access to court conditional, based on attempted mediation which did not reach a settlement. Some would contend that there is a distinction between making it compulsory for the parties to go through the process of mediation and making it compulsory for the parties to resolve their dispute in mediation. It is suggested the first alternative is acceptable but the second is not. I regard both as unacceptable, the difference being limited to the degree of unacceptability. 

The second alternative is, in reality, not an alternative at all since you cannot compel a party to reach a compromise that a party finds unacceptable.

The first alternative has the disadvantage that it can be undesirable because of the difficulty in enforcement that it can create if a party does not wish to cooperate. The furthest a court can safely go is to make the provision for an opportunity for the parties to mediate if they wish to do so, by building into the procedure a time for the parties to mediate.

As here in Singapore, the judiciary in England have limited powers to take a refusal to mediate into account when making an order for costs. A justification for the use of this sanction is that while every litigant has a right to have access to a court for the resolution of their disputes, to do so where mediation is an obvious course, or a refusal to take part, could be classified as unreasonable. You can still refuse to do this but it may be at your own expense. Case law in England makes clear this power is strictly circumscribed in its application. This is an approach that is supported by Art 6 of the European Convention of Human Rights. In family matters a more robust approach, again as in Singapore, may be justified because of the possible effects on children due to strife between their parents.

In addition, as I have already made clear, compulsion is inconsistent with the consensual nature of mediation and the importance of flexibility in the process. How do you force someone to agree with a compromise of his dispute by a process with which he does not agree, and at the same time expect him to feel justice has been done?

Again it is by no means easy for a judge, after the event, to determine whether a party has been unreasonable in his approach to mediation. This is particularly so when the party decides to pay no more than lip service to an obligation to mediate. The possibility is that deliberate deception would be difficult if not impossible to prove. It is, in my view important for courts to resist the temptation of questioning the mediator. This could undermine the mediators’ impartiality. The risk of expensive, unproductive satellite litigation should be avoided. It cannot but damage the reputation of mediation. 

When I have challenged the few lawyers who have admitted to me they have advised against mediation, they have sought to explain their attitude by saying it was too early or too late to mediate. This was on the one hand because they did not have sufficient knowledge about the other side’s case yet to mediate confidently. This is not withstanding that I had introduced a power to order disclosure even prior to proceedings commencing, if this was reasonably necessary to enable efforts to settle the dispute to take place. By contrast, lawyers also argued it was too late to mediate because discovery had been such an expensive process that it meant mediation would be a waste of time, as the other side would never agree to pay the substantial costs already incurred by his client.

5. Mediation and arbitration

An area where I have been surprised that mediation has not expanded more rapidly is arbitration. Arbitration is an area of litigation which, in my experience, has all the positives about it which would justify its use every bit as much as litigation in the courts. Indeed, I see it as being more likely to be amenable to mediation than litigation in the courts because after all, it is a confidential process in most circumstances, and in addition, it is normally conducted by sophisticated litigators who could be expected to be familiar with mediation.

In addition, parties have agreed to incur the additional costs of arbitration over litigation in the courts. Hence, they can be expected to be able to meet the costs of mediation without difficulty - although the fact is that use of mediation, or sometimes called Med-Arb, has been extremely limited.

An explanation may be that arbitrators, especially in commercial litigation, are more diffident in encouraging the use of mediation than full time judges who would conduct the trial in civil or commercial courts. After all, they usually owe their appointment as arbitrators to the parties’ lawyers. Thus, arbitrators would be likely to defer to them on questions such as whether there should be an attempt to resolve the dispute by mediation.

I have over the years found among the arbitration industry a remarkable reluctance on promoting mediation. I find the reasons advanced for this entirely unsatisfactory. If this is in any way due to supposed self-interest, it would be considered a mistake in my view. Parties to commercial arbitration as in litigation are increasingly jaundiced as to the rising costs. If increased use of mediation reduces the average cost of arbitration, and leads to arbitrations being resolved quicker by that means, it would increase its popularity and result in the number of arbitrations also willingly increased.

In keeping with Singapore’s high reputation as a centre for international arbitration, I very much hope it will take the lead in promoting mediation.

6.Conclusion

It is now time to bring these remarks on the future of mediation to a conclusion. I hope my fragmented survey has not distracted from the great progress mediation has made over the years. It is an impressive story.

Mediation has progressed from being a marginal activity of limited significance to becoming a major player on the dispute resolution landscape.

The issue is not whether it will continue to be a valuable resource in the future.

It is whether it can achieve the greater potential that enthusiasts like myself are confident it has.

It could be and should become a critical part of any dispute resolution activity of significance. While this position is already close, it will not be achieved easily and will involve difficult decisions, primarily as to what and how much regulation of mediators and mediation should be provided. Whatever is decided should be based on proper and well-resourced research, and should be implemented as part of an international programme, with as broad support as is possible. The regulation should be sufficient to give the public confidence in mediation, but not so rigid as to deter innovative initiatives in mediation practice.

Certain jurisdictions will have to give a lead and I very much hope that Singapore will feel this is a role it should embrace. If it does, that will give the project every prospect of success. This is because a modern efficient process for mediation would be a natural companion to Singapore’s highly efficient litigation and arbitration systems.

END