Mediation; an opportunity for a new approach

(This article appears in the Spring/Summer 2011 issue of the RGDATA magazine UPDATE)

Human frailty, it seems destines us to a level of involvement in disputes and nowhere more so than in business and in the workplace. But I see a future where the support business owners might need from their association, or others will be services to achieve amicable dispute resolution, as well as the information needed to defend and contest disputes.

Alternative Dispute Resolution (ADR) is the key to keeping down business costs across a whole range of commercial, contract and workplace disputes.

My work as an employment law and HR consultant is about helping clients avoid disputes and then resolve them as quickly, cheaply and effectively as possible when they do arise. By definition such disputes are adversarial in nature, especially if they involve reference to a third party.

Increasingly we are turning to better, cheaper and more efficient ways of resolving disputes; known by the generic term ‘Alternative Dispute Resolution’ (ADR). The best known forms of ADR are mediation and arbitration.

Under Arbitration legislation (The Arbitration Act 2010) the existence of a valid arbitration clause in any contract will result in a stay on legal proceedings in respect of ANY dispute arising out of that contract (the wording is important).

This not only avoids costly court appearances but all that messy pre court stage also. Arbitration is not without cost; but it is faster, normally a good deal cheaper where the dispute is not complicated, and it is private.

Last year the Law Reform Commission published proposals on Mediation and Conciliation which will provide court encouragement and protection to mediation of commercial disputes. The full Report, including the draft bill and a commentary can be read via a link on a sub tab of the Dispute Management page on this site.

So this is not a passing fad. This is the next ‘big thing’ and the new Government has promised that the Mediation & Conciliation Bill will be published next year. Courts are likely to punish even successful litigants who refuse to avail of mediation in relation to their costs.

What does this mean for your business? In the first place all commercial contracts should contain a mediation and arbitration clause. Many already do. It’s common across a wide range of sectors; financial services, construction, package holiday and most new car purchases, for example and I have provided RGDATA with a model text and can advise further.

In the world of employment law and HR there is also a role for ADR. Strictly speaking the Arbitration Act does not cover employment disputes (for reasons lost on me, but the Mediation Bill will) but in a situation where it now take 80 weeks to get to the EAT, and three years to the Equality tribunal there is something not quite ‘fit for purpose’ about this system.

Often employers will want to ‘kick the can down the road’ but I generally advise against this. A problem delayed and unresolved may be a problem doubled.

While statutory guidelines on dispute resolution in the workplace include reference to internal and external mediation, one sees almost no standard Grievance and Discipline procedures which provide for it.

At local level, many HR departments or small business owners baulk at this, and at the mediation option in general.

And even where a claim is statute based this should not discourage settlement by mediation. While the Rights Commissioner service is worth its weight in gold it still involves a degree of delay, a trip to a hotel or Beggars Bush and a degree of unpleasant confrontation on the day with people who may be current employees. Down the road from this, a further wait for an EAT appeal which may hang over you for two years is not a great idea.

The EAT will refuse to exercise jurisdiction where parties have settled a case subject to a number of important pre-conditions (mainly based on ‘informed consent’). A mediated settlement by an independent, accredited mediator will get an issue off your desk, and resolved confidentially and in a setting where you have some control over the outcome and the cost! And with current employees you get to shake hands and get back to work!

So this is how I see the future of dispute resolution. Quicker, better, cheaper and less confrontational.  Start by having a fresh look at your commercial contracts and your Grievance and Discipline procedures! And think about getting ADR provisions into all you can!