In the recent case of Byrne -v- Arnold (2024) IEHC308, Mr Justice Kennedy reducedrecoverable party and party costs by 5% for failure to comply with the statutory obligations pursuant to Section 14 of the Mediation Act, 2017.
The requirement is for the moving party’s solicitor, in the normal course, on behalf of the Plaintiff to advise that Mediation ought to be considered as an alternative basis to litigation.
The benefits of Mediation have been highlighted and should be considered in the context of this decision. Mediation can be less costly, confidential, flexible with a neutral party actively assisting the parties towards a negotiated settlement. Mediation often operates in parallel to litigation and is never a bar to proceeding with litigation if unsuccessful. Mediation often serves to reduce the issues in dispute.
Mr Justice Liam Kennedy highlighted his considered views regarding the perception of a litigant “showing weakness by proposing Mediation”. He further noted that Section 14 allowed a type of “get out” for that perception in that it is a statutory and professional requirement of litigation.
In practice, there can often be the misconception that Mediation takes place at the commencement of the case, however, his decision highlighted that parties could agree Mediation and continue to exchange pleadings and obtain expert reports in order to prepare for same.
The Judgment further noted that it was not an excuse that urgency might dispense with the requirement to recommend Mediation. Broadly speaking his view was that it should be considered in any consultation before an action no matter how unlikely it would lead to a positive outcome.
In considering the costs penalty, he reduced the party and party solicitor’s fees by 5%. He did consider a higher penalty for the failure to comply with the statutory obligations in Section 14 of the Mediation Act 2017 and stated that a higher amount could be imposed in the future for non-compliance.
The Judgment serves as a timely reminder of the obligations to investigate or consider Mediation and the costs penalties for not considering same. It is noted that a more significant costs penalty could be imposed in future cases and in particular reaffirms the requirement of a Statutory Declaration to be filed in order to avoid a Court adjourning proceedings.
Mary Byrne
Partner
OBL Solicitors.
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