(Continued from yesterday)

Reference by courts to mediation is a universally accepted phenomenon. In the recent Churchill case (November 2024), the UK Court of Appeal determined that the courts of England and Wales can lawfully stay proceedings and or order the parties to engage in non-court-based dispute resolution processes which includes mediation, provided that order does not impair the essence of the claimants right to a fair trial, is made in pursuit of a legitimate claim, and is proportionate to achieving that legitimate claim.

The mediation process is informal, structured, non-adversarial and disciplined. The Bill sets out how a mediation can be initiated in different circumstances, ie. when there is a mediation agreement and also when parties agree to mediate after a dispute arises even without a prior mediation agreement. The concept of the ‘Mediation Service Provider’ (MSP) is recognised. An MSP is an important player in the process because it is the MSP that provides administrative support. An MSP can be a single individual or an entity. The obligations of an MSP are provided for in the Bill itself to ensure that important global standards are complied with. This provision is one of those that seeks to ensure that internationally accepted standards are complied with.

Disputants must engage directly and voluntarily in good faith

and must be present at the mediation sessions. The good faith principle is important to ensure that disputants are sincerely committed to a settlement and must provide full disclosure of matters that are relevant to a sustainable solution. The process ensures party autonomy which means that the parties take all decisions regarding the settlement or the refusal to settle. The process has no focus on adjudication of legal rightsand wrongs and has a focus on assisting parties to identify and satisfy their concerns.

Legal representation is not essential but Lawyers and other professionals (Engineers, Doctors, Architects, Family Counselors, Surveyors, Actuaries) can attend the sessions to assist the disputants and advise on settlements. Lawyers do have a role in mediation and must engage as strategic partners. Globally, Lawyers are trained in mediation advocacy to equip them with the skills necessary to perform a niche role in mediations, which role is very different to the one Lawyers assume in an adversarial process.

The Mediator must be independent, impartial and have no conflict of interest. Professional Mediators are trained in the core skills and techniques that are relevant to assist parties to better understand their concerns, to communicate effectively and to identify creative solutions that satisfy their concerns. The Mediator functions as a Communicator, a Negotiator, and a Manager. These roles require specific skills and hence specialized training is of the essence as in any other profession.

Confidentiality must be maintained by all parties and by the Mediator with regard to matters discussed and submissions made during the mediation. The without prejudice rule also applies and serves to assure to the disputants the space to discuss matters freely and creatively without fear that thoughts generated and solutions suggested at the mediation sessions will be used against them as a surrender of rights or an admission of a position, in the event that any other dispute resolution process is pursued thereafter.

Where a settlement is reached, the terms and conditions are incorporated in a Settlement Agreement and signed by the parties. Such an agreement has the same sanctity as any other agreement entered into by parties and is valid in law and enforceable in a court of law. If a settlement is not reached, a certificate of non-settlement is issued to the parties. Although a decree of court is not necessary to provide validity to the agreement, if a party desires to obtain a decree based on the terms of the settlement, an application may be made to the High Court. The Bill provides of the procedure to be followed to obtain a decree and includes provisions to ensure speedy disposal of such applications. Grounds for refusal to grant a decree are included and adopt some of the UN Convention grounds. These include incapacity of a signatory, Mediator malfeasance without which the party would not have entered into the agreement, that the grant of a decree would be contrary to public policy of Sri Lanka and that the subject matter is not capable of settlement by mediation.

Why ADR and why Mediation?

Laws Delays – Globally, ADR mechanisms including mediation, have been resorted to by Governments and by disputants, due to the serious issue of laws delays. In Sri Lanka the number of cases pending in all courts in the country at the end of 2024 amounted to just over one million. It is clear that laws delays have reached phenomenal levels and that costs of litigation are overwhelming for many litigants. The cost of maintaining the administration of justice system in a country is significant and is a burden on the State. For trade, business and investment, delays in resolving business disputes detract from their corporate objectives, retard the achievement of business targets, and consume the time of executives.

Contract enforcement must improve – Sri Lanka has a weak contract enforcement record and its performance was marked as being below the South Asian average. This impacts adversely on business and is a deterrent to investors. Henceforth the World Bank will use its B-READY index to measure the business climate of economies. The indicators will provide important data that investors will look at, to make investment decisions and which businesses will examine to make better business decisions. If Sri Lanka desires to offer itself as an attractive investment destination, the dispute resolution regime must be improved.

Benefits of Mediation – The widely accepted benefits of Mediation are that it is cost effective, time efficient, has the potential to reduce the instances when a dispute leads to the termination of a business relationship, and produces savings in the administration of justice for States. These benefits are articulated in the preamble of the UN Mediation Convention and are articulated by international bodies such as WIPO, ICC, ICSID, IBA, to name but a few. It is because the practice of mediation has generated these benefits over several years of use that its popularity has grown.

Mediation is popular globally –In 2018 the United Nations adopted the Convention on International Settlement Agreements Resulting from Mediation (the Singapore Mediation Convention) responding to a call for a uniform framework to enforce mediated agreements across borders. The need for such a framework was due to the increasing use of mediation for the resolution of cross border trade and business disputes. Sri Lanka signed the Convention in 2019 and enacted domestic legislation in 2024.International Organisations that previously offered only arbitration services such as WIPO, ICC, ICSID, IBA had adopted mediation Rules and have been providing mediation services for many years.

Mediation in domestic regimes – Many countries have institutionalised mediation in their domestic laws including for mandatory use at the pre trial stage. Some jurisdictions provide for court annexed mediation which means that mediation is integrated into the judicial system. Other jurisdictions provide for court referred mediation.

The UK’s civil justice reforms of 1999 which were inspired by Lord Woolf’s review of the civil Justice system contained a recommendation that ADR be pursued prior to litigation. Many amendments were made to the Civil Procedure Rules including as recently as 2024 to provide for courts to exercise greater powers to mandate mediation.

India enacted the Mediation Act 2023 which provides a framework for the conduct of mediations and also encourages pre-trial mediation by stating that whether any mediation agreement exists or not, the parties before filing a civil or commercial action, may voluntarily and with mutual consent take steps to settle the disputes by pre-litigation mediation. This clearly articulates a pre-trial, pro mediation bias.

Some other countries in the Asian region that have institutionalised mediation include – Hong Kong (Mediation Ordinance 2013), Singapore (Mediation Acts of 2017 and 2020), Malaysia (Mediation Act, 2012 and AIAC (Malaysia) 2018), Pakistan (CPC as amended and the ADR Act, 2027), Japan (Civil Mediation Act, 1951). Singapore in particular is a leader in the provision of mediation services.

The EU adopted the EU Mediation Directive in 2008 and many European countries have institutionalised mediation.

USA, Canada, Australia and New Zealand are some countries that have a long history of the use of mediation.

The International Mediation Institute (IMI)

is a body with a global reach, dedicated to driving transparency and standards in mediation worldwide. Its vision is “Professional Mediation worldwide: promoting consensus and access to justice.”

Is Sri Lanka ready to provide mediation services?

Yes. A number of persons including Lawyers and other professionals have been trained at international Training Institutes, received accreditation and are available to provide services. Trained Mediators have already conducted mediations and the number of disputes being referred to mediation is increasing. Opportunities to obtain training and accreditation from international accreditation Institutes are offered, aided also by Institutions such as UDecide that facilitate training opportunities. The International ADR Center which is a purely private sector non-profit Company has its own Institutional Rules for Mediation and provide services and infrastructure facilities of international standards, including for virtual mediations which have already taken place. The International Chamber of Commerce (Sri Lanka) and the Sri Lanka National Arbitration Centre also have the capability to provide mediation services.

A majority of the trained group includes Lawyers. Trained Mediators continue to develop their learnings and skills and an Association of Trained Mediators is being established. Following global trends, a group of Lawyers have been trained in mediation advocacy to learn the skills to perform their niche role in the mediation process and the trainings will continue.

Is Regulation necessary?

While accreditation for Mediators and MSPs is vital to ensure that standards are maintained, the need for regulation should be addressed with care. Given that Arbitrators have no regulatory regime, the argument is often advanced as to, Why then for mediators and MSPs? Given that the Mediation Bill itself sets down standards for Mediators, MSPs, disputants and sets out the procedure, a regulation framework, if found necessary, must be designed to ensure efficiency and value addition, rather than to provide for regulation for the sake of regulation.

Conclusion

The challenge today is to provide disputants with access to meaningful dispute resolution processes that may be pursued with confidence and which, in their judgment will offer them a result that will satisfy their requirements. This issue assumes a greater degree of importance given the state of the litigation overload in the country and the resulting delays, expense and unpredictability that deny disputants the justice that they seek. It is this context that the initiative to institutionalise Mediation as a mechanism that has proved successful globally and to sustain it in its purest form, assumes relevance.

The Bill before Parliament is timely and will contribute to establishing a comprehensive eco system for the use of mediation in its purest form in Sri Lanka. In time, given the geopolitical imperatives, Sri Lanka can develop into an ADR hub that can be accessed by international partners with confidence.

by Dhara Wijayatilake,

Attorney at Law, Director and Secretary General of the International ADR Center, Sri Lanka; former Secretary to the Ministry of Justice.