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Mediation Update - July 2006       © David Cornes        Republished with permission

For a list of cases by date, click here.
For a list of cases by subject, click here.
For an alphabetical list of cases, click here.

Court Encouragement of Mediation Continues

Changes in the Pre-Action Protocol & two recent cases:

The “Practice Direction - Protocols”, part of the Civil Procedure Rules was recently amended as to mediation.  

Two recent Court of Appeal decisions have emphasised the benefits of mediation.


Dr SR Burne –v- “A” [2006] EWCA Civ 24
IDA Limited and Others –v- University of Southampton and Others [2006] EWCA Civ 145

Question Quick Overview

What is the Protocol amendment about? What is the essence of the Court of Appeal’s comments?

The “Practice Direction - Protocols” has been amended so as to give more emphasis to pre-action attempts to settle, including mediation. It provides the court with a power to require evidence as to what alternative means of settlement were considered and to have regard to such matters when considering costs.

The two Court of Appeal cases are: Dr S R Burne  -v- “A”  (an allegation of professional negligence) and IDA Limited and Others -v- University of Southampton and Others (about who owned a patent). In both cases the Court of Appeal recommended mediation to the parties in unequivocal terms.

The Detail  

“Practice Direction – Protocols”

This Practice Direction (to read the Protocol in full, click here ) applies to the pre-action protocols which have been approved by the Head of Civil Justice. So, for example, it applies (Paragraph 1.1) to the Construction and Engineering Disputes Protocol. It has always been a requirement (Paragraph 4.3(f)) that the Claimant’s Pre-Action Protocol Letter should state that the Claimant wishes to enter into mediation (or some other form of ADR). However, Paragraph 4.7 has been re-written as follows:

“The parties should consider whether some form of alternative dispute resolution procedure would be more suitable than litigation, and if so, endeavour to agree which form to adopt. Both the Claimant and Defendant may be required by the Court to provide evidence that alternative means of resolving their dispute were considered. The Courts take the view that litigation should be a last resort, and that claims should not be issued prematurely when a settlement is still actively being explored. Parties are warned that if the protocol is not followed (including this paragraph) then the Court must have regard to such conduct when determining costs.

It is not practicable in this protocol to address in detail how the parties might decide which method to adopt to resolve their particular dispute. However, summarised below are some of the options for resolving disputes without litigation:

  • Discussion and negotiation.
  • Early neutral evaluation by an independent third party (for example, a lawyer experienced in that field or an individual experienced in the subject matter of the claim).
  • Mediation – a form of facilitated negotiation assisted by an independent neutral party.”

Court of Appeal Cases

In Dr SR Burne –v- “A” [2006] EWCA Civ 24 (for the full judgment, click here), the Court was concerned with allegations of professional negligence against a Doctor, who is a GP. “A” had suffered a heart attack and brain damage when he was under 7 years of age as a result of a blockage in a ventriculo-peritoneal shunt (a device that continuously drains fluid from the brain cavity) that had been fitted when he was 9 weeks old. The Judge at first instance had put the agreed expert evidence as to diagnosis over the telephone using open questions on one side and found for “A”. The Court of Appeal ordered a re-trial but Lord Justice Sedley, in giving the judgment of the Court, said:

“I do, however, feel very strongly that this is a case which must be referred to alternative dispute resolution before it is restored for the re-trial. Both parties should take stock of the strengths but also the weaknesses of their respective cases which are now plain for all to see and I hope mediation will bring a swift conclusion to a tragic event.”

In IDA Limited and Others –v- University of Southampton and Others [2006] EWCA Civ 145 (for the full judgment, click here), the Court was concerned with costly litigation over who owned a patent. In allowing the appeal, Lord Justice Jacob, in giving the decision of the Court, said:

“Parties to these disputes should realise, that if fully fought, they can be protracted, very, very expensive and emotionally draining. On top of that, very often development or exploitation of the invention under dispute will be stultified by the dead hand of unresolved litigation. That may be the case here: there has not yet been any exploitation by either side, some 8 years after the original PCT application. It will often be better to settle early for a smaller share than you think you are entitled to – a small share of large exploitation is better than a large share of none or little.

This sort of dispute is particularly apt for early mediation. Such mediation could well go beyond conventional mediation (where the mediator facilitates a consensual agreement). I have in mind the process called "med-arb" where a "mediator" trusted by both sides is given the authority to decide the terms of a binding settlement agreement. Such a power in effect already exists in the Comptroller once he has found a case of entitlement (see s.8(2)). But by then it will probably be far too late.”

Although the Judge referred to “med-arb”, it might be said that “arb-med” might be more suitable in such situations. It avoids the potential difficulties as to how a mediator deals with information that he has gleaned from a mediation when he comes to give an arbitration award. Arb-med can be set up so that the arbitration award is put in an envelope on terms that it is not to be opened unless and until the subsequent mediation fails to produce an agreed settlement.

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