No current article is complete without mentioning the coronavirus and so I begin by highlighting the revolution in communications which the virus is causing. Courts throughout the EU are having to adapt and introduce remote hearings or are adjourning cases, creating a backlog to be dealt with when the isolation period ends. Disputes do not stop and in fact, many are likely to arise as a result of the pandemic.
People are discovering the benefits of online and telephone mediation and using it as a way of breaking the deadlock. The platforms used include Zoom (which even the UK Parliament is going to be using), Skype for Business and Microsoft Teams. Prior to the pandemic, we were seeing a gradual uptake of online mediation which is now accelerating at a faster pace. The Courts in the UK have been forced to accelerate their reforms and people have no choice but to use technology. The theory is that this change may be irreversible and remote dispute resolution become the norm. Clearly, online mediation is ideal for cross border disputes. People are not focusing on Brexit again yet, but after the pandemic there is likely to be more uncertainty and an upheaval in terms of trade with the EU, particularly if only a limited agreement is reached before the 31 January 2021 deadline. There are bound to be disputes between suppliers and businesses in the UK and EU. Jurisdiction and enforcement may become more difficult. Online mediation may be able to fill the void of uncertainty and help parties to resolve disputes more quickly and cost effectively.
Every indication is that the EU will continue to promote the use of mediation generally for the resolution of disputes and ADR for consumers. In the UK, businesses and consumers are becoming more familiar with mediation and the ADR Regulations and the UK may eventually agree to remain affiliated with the EU ADR/ODR system, like other third countries like Iceland, Norway and Liechtenstein. If not, it is unlikely that they will dismantle and abolish the ADR system in the UK which helps to reduce the pressure on the Courts in relation to lower value consumer disputes. At the other end of the scale, with major commercial disputes between companies and individuals trading multi-nationally, mediation is likely to continue to be an attractive option as a means of reducing costs. Many businesses throughout the EU already include mediation and/or arbitration in contractual dispute resolution clauses. I also anticipate that a wider range of mediation providers may be included in contracts, so as to increase the choice, competition and to reduce the cost of mediation.
In the last decade we have witnessed a significant growth in international mediation. Many jurisdictions have incorporated the legal recognition of mediation and settlement agreements in their legal systems. The Singapore Mediation Convention will also give mediation users in signatory states more confidence in mediation as a dispute resolution procedure.
The convention will come into force on 12 September 2020. Crucially the EU and UK are not yet signatories, but after Brexit they may do so. The EU currently has Mediation Directive 2008/52/EC in force with mechanisms for enforcing mediation settlement agreements. It is considering whether to sign or to require Member States to sign individually. The impetus for the UK signing may increase now that it is leaving the EU, bringing with it an increased focus on protecting its position as a pre-eminent dispute resolution forum.
Traditionally, mediation has had limited scope in cross-border disputes because a mediation settlement agreement can only be enforced in the same way as any other contract. In an international context, this can be a difficult process. There has not been much of an incentive to use mediation in international disputes as the New York Convention already provides a means of enforcing arbitration awards in many countries.
The Singapore Mediation Convention provides a process for the direct enforcement of cross-border settlement agreement between parties resulting from mediation. This allows the party seeking enforcement to apply directly to the courts of the State where the assets are located.
The Convention does not apply to all settlement agreements as there are some exclusions, such as relating to consumer transactions nor to family, inheritance or employment law. However, if it does apply then there are simplified enforcement procedures.
The Convention’s success will depend on how many states ratify it and how well it works in practice, but it could encourage parties involved in cross-border disputes to consider mediation as a cost effective way of resolving disputes and lead to an increased use of cross border mediation.
Peter Causton, Director of ProMediate UK Limited
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