The Mediation Act 2017 – A Game Changer for Employment Lawyers?

Posted in : HR Updates ROI on 11 October 2017 Issues covered:

In this article, Jacqui Kelly, a Senior Associate in the Employment Department at A&L Goodbody and a CEDR accredited mediator, explains why a knowledge of mediation processes and the Mediation Act are so important to employment lawyers.

Until now mediation could be seen as the 'Cinderella' of the dispute resolution process - the beautiful sister consigned to the scullery who at last gets to the ball.   The Mediation Act, which has been under consideration since 2012 but has only been signed into law on 2 October 2017 by President Higgins. 

While the Act expressly excludes from its ambit disputes being investigated or mediated by the Workplace Relations Commission (WRC), it puts mediation at the centre of almost every other dispute resolution process.

The purpose of the legislation is to actively promote the consideration of mediation as an alternative to court proceedings.  It obliges lawyers to advise their clients to consider mediation as an alternative to litigation.

Under the Act, a solicitor must advise their client to consider mediation before issuing proceedings.  A solicitor must also provide information in respect of mediation services, including names and addresses of mediators and advise of the benefits and advantages of mediation. The solicitor must also explain the confidential nature of the process and the binding nature of any resulting settlement agreement. To reinforce the point, when commencing proceedings a solicitor will be required to make a statutory declaration confirming that s/he has complied with these obligations.

This means that, before commencing non WRC claims such as stress/bullying claims, employment lawyers not only need to be aware of the provisions of the Mediation Act but also have details to hand such as the names and addresses of mediation services and a working understanding of the process.

When advising clients of the advantages of mediation, solicitors will need to explain that if the mediation results in a settlement being agreed then the process will be much faster and cheaper than litigation. Accordingly, where mediation appears likely to have a reasonable prospect of success in resolving particular disputes then it is likely to become increasingly popular as a means of resolving such issues and avoiding the costs, risks and delays of litigation.  This must be especially true for stress/bullying claims where the legal costs often equal or exceed any damages awarded.

The Act says that the mediator's fees must be reasonable and proportionate to the importance and complexity of the issues and the amount of work carried out.  It also imposes a statutory obligation on the mediator and the parties to make every reasonable effort to conclude the mediation efficiently, which is likely to minimise costs. In practice, the mediation of an employment dispute rarely takes more than a day.

The new legislation includes the following important clauses:

  • Section 6 makes clear that the fact proceedings have issued shall not prevent the parties engaging in mediation at any time prior to the resolution of the dispute.
  • Section 16 allows the court or the parties to suggest mediation and/or provide the parties with information about the benefits of mediation.  This is likely to prove a very persuasive tool to encourage mediation.
  • Section 19 allows the parties, any time after an appearance has been entered, to adjourn the proceedings to allow for mediation where a pre-existing mediation agreement is in place.  It is likely that employers who are adverse to litigation and/or publicity will look to include a mediation clause in future employment contracts so as to avail of section 19 if the matter ends up in dispute.
  • The statutory support for mediation is reinforced by section 21 which allows the court to have regard to the unreasonable failure of a party to refuse to consider or attend mediation when awarding costs.

The Act also provides for the training and accountability of mediators and envisages a statutory Code of Practice. 

The essence of the mediation process is that it is confidential to the parties.  For employers and employees involved in litigation, publicity is one of the factors which can drive settlement.  The confidential nature of the process may result in an increased mediation uptake at the early stages of the litigation where costs are most manageable.

Any mediation will be preceded by an agreement to mediate.  This sets out the manner in which the mediation is to be conducted, the cost of the mediation, the confidential nature of the mediation, the right of the parties to seek independent legal advice and the legal enforceability or otherwise of any settlement agreement.

In a world that promotes self-determination and individuals taking control, mediation is an organic evolution of the legal process. Instead of an outside party ruling on their dispute, the parties get to keep control of the outcome which can lead to a satisfactory outcome for all concerned. That will not always be the case and there will be occasions where litigation might be the only way to bring a dispute to an end. However, litigation should no longer be the automatic or default choice. Other options, including mediation, should at least be considered by the client with the help of his or her lawyer.

Is the Mediation Act a game changer for employment lawyers? We will have to wait and see. One thing is certain - employment lawyers now need a good understanding of the mediation process. They will have an obligation to communicate this understanding to their clients and to consider the inclusion of mediation clauses when drafting all employment agreements in the future. 

This article is correct at 11/10/2017

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.