LITIGATION AS WE KNOW IT MIGHT SOON BE SOMETHING OF THE PAST, WITH MEDIATION BECOMING THE MAIN DISPUTE RESOLUTION MECHANISM.

fhbc_blog_dec_02The Rules Board for Courts of Law of the Republic of South Africa introduced the proposed High Court Uniform Rule 41A in December 2018.  Rule 41A can be seen as a type of reform, putting mediation in the spotlight.  This will change our litigation system dramatically as mediation is proposed to become the mainstream mechanism for resolving disputes, should Rule 41A come into effect.

Mediation defined

The Oxford Dictionary of English (Third Edition, 2010) defines mediation as the:
“intervention in a dispute in order to resolve it”.

In general mediation is an alternative dispute resolution mechanism whereby parties appoint a neutral, qualified third party to facilitate a settlement.  It can be seen as a more realistic approach, giving an independent professional the scope to test the dispute against reality.

Regarding the third party, or the mediator, PJ Veldhuizen, managing director of Gillan and Veldhuizen and a practising commercial mediator earlier this year stated that:

“The mediator facilitates discussions between the parties, assisting them in identifying issues, clarifying priorities, exploring areas of compromise and generating options to resolve the dispute.”

What does High Court Rule 41A entail? 

Some highlights:

  • When issuing summons or application or when delivering a plea – parties will be required to specifically indicate whether they consider mediation to be possible or not and to give reasons for either consideration.
  • In addition to the above, the parties will have to deliver a joint minute, recording their agreement to refer the dispute to mediation.
  • Time limits to deliver pleadings will be suspended whilst mediation is in progress.
  • The procedure where multiple parties are involved in the litigation process and some parties proceed to mediation, while others do not, will be possible.
  • The admissibility and confidentiality of documents will be taken into consideration.
  • A joint minute indicating the outcome of the mediation must be submitted.
  • Costs of the mediation proceedings and cost orders may be given.

Which type of disputes will fall within the parameters of mediation? 

The proposed Rule will apply to all disputes before the High Court and is not specific to any type of dispute, at this stage.

Does this mean that mediation will henceforth become compulsory (instead of going to court)? 

No, the proposed Rule will not make mediation compulsory.  It should rather be seen as a mechanism to facilitate mediation proceedings which was accepted/agreed to by the particular parties or mediation which was recommended by the court.  If the proposed Rule was meant to force parties into mediation, it would most probably result into a largely unsuccessful dispute resolution mechanism and a waste of time and money.

The practical side 

If the proposed Rule 41A becomes effective, and parties agreed to make use of this route – how will it work and what is important to know?

  • A notice, indicating a party’s decision regarding whether he or she opts for mediation or not, must accompany the summons or notice of motion, when delivering it to the other party.
  • This notice must clearly set out the party’s reasons as to why mediation will be suitable (or not).
  • Parties may agree to refer their dispute to mediation at any stage before judgment is given.
  • Keep in mind that the court may also, in terms of Rule 37A, direct the parties to consider that the matter be referred to mediation.
  • Once the parties have agreed to refer their dispute to mediation, the mentioned joint minute must be in place, recording their mutual decision.
  • The mediation process starts on the signatory date of the joint minute.
  • The mediation must be concluded within 30 (thirty) days after the date of the signature of the minute.  However, the Judge of the court does have the discretion to extend the period if necessary.
  • If the dispute has been resolved by the mediation proceedings, a settlement agreement must be drafted, and should be in accordance with Rule 82 (Form 14, J 628 may be used in this regard).
  • The settlement agreement should include the following:
    • Proper and correct citing of the parties involved.
    • Where necessary, confirmation that the signatories have the authority to conclude the agreement.
    • A clear and precise indication whether the dispute was settled as a whole, or alternatively, which part(s) have been settled.
    • What is the settlement amount?
    • Who is liable for the payment of the settlement amount?
    • To whom must the payment be made out – including the correct and full banking details.
    • When must the payment be made?
    • If necessary, a confidentiality clause (as the settlement agreement is not automatically a confidential document).
    • Who will be considered liable for the legal (and other) costs?
  • Once the settlement agreement has been drawn up and signed, it should be made an order of court, ensuring the enforceability of the agreement.  Thus, confirming that the legal proceedings are being settled fully and finally (if that is the case).
  • Lastly, if the dispute was resolved as a whole by the settlement agreement, the parties should ensure that the legal proceedings are properly dealt with – meaning that they will have to, for example, withdraw the initial action on the basis of settlement.

A bag of bonuses 

The mediation process and nature of the concept is far more informal, less intimidating, more affordable, time effective and is more accessible for all.  However – this does not mean that the outcome of a successful mediation (a settlement agreement) has less power – as you are able to submit the settlement agreement to the High Court to be made an order of the court which ensures that the agreement will be fully enforceable.

In closing, it is important to seek professional advice regarding your dispute before any decision should be made with regards to the dispute resolution route.  Also keep in mind that this article should be seen as a source of guidance.  For more information or advice, please contact our office or schedule an appointment.

Lorraine Oosthuysen:  lorraine@fhbc.co.za / Chantél van der Merwe:  c.vandermerwe@fhbc.co.za

Source:

Proposed Uniform Rule 41A: Mediation as a Dispute Resolution Mechanism – Rules Board for the Courts of Law Republic of South Africa
https://www.lssa.org.za/upload/files/General/Rules%20Board%20letter%20Uniform%20Rule%2041A%20December%202018.pdf

Proposed Amendments to Rule 41 of the Uniform Rules of Court and its impact on the Companies Tribunal
https://www.companiestribunal.org.za/proposed-amendments-to-rule-41-of-the-uniform-rules-of-court-and-its-impact-on-the-companies-tribunal/

South Africans may soon be required to consider mediation before heading to court:
https://businesstech.co.za/news/business/335459/south-africans-may-soon-be-required-to-consider-mediation-before-heading-to-court/

Taking the mediation route before heading to court:
https://businesstech.co.za/news/business/335459/south-africans-may-soon-be-required-to-consider-mediation-before-heading-to-court/

Mediation in the High Court:
https://www.financialinstitutionslegalsnapshot.com/2019/11/mediation-in-the-high-court/

Important Clauses to Include in Settlement Agreements:
https://www.fanews.co.za/article/legalaffairs/10/general/1120/important-clauses-t-include-in-settlement-agreements/27624

Form 14 (J 628) Rule 82:
https://justice.gov.za/forms/med/J628-Mediation-14.pdf