A-Z of ADR: Mediation – Understanding Mediation
-Ananya Patwardhan (IV Year, NLSIU Bangalore)
What is mediation?
Mediation is an alternative dispute resolution (ADR) method which involves a neutral and independent third party facilitating negotiation between disputing parties in order to find a mutually beneficial solution.[1] It is significantly different from adversarial processes of dispute resolution and instead focuses on being non-coercive and consensual. The disputing parties themselves are actively involved in the process to the maximum extent and work together, with the mediator’s assistance to reach a solution acceptable to all of them.[2]
Key features of mediation
- Party Autonomy: In mediation, parties have a significantly greater deal of autonomy in decision making as compared to other dispute resolution methods such as litigation. They are actively involved in the deliberation and negotiation, while the mediator is merely expected to facilitate the discussion. The parties are in charge of the outcome of the mediation and are free to mutually decide upon the terms of settlement.[3]
- Voluntariness: In most situations, mediation is a voluntary process. The parties come to the mediation table on their own accord and are free to walk out at any point during the session if they believe it does not serve their interests. It is not necessary for the parties to reach a settlement. Since parties voluntarily choose to opt for mediation, they are more likely to participate in the process actively and whole-heartedly, which increases the likelihood of reaching a settlement. One exception to the idea of mediation being a voluntary process is that of court-mandated mediation. In such cases, the court directs the parties to try resolving the dispute amicably before resorting to litigation. The parties are mandatorily required to exhaust the remedy of mediation before the court can hear the matter.[4]
- Confidentiality: Mediation is a confidential process. Anything revealed during the course of mediation sessions is required to remain confidential, as mandated by law. Such details cannot be revealed during the course of legal proceedings. Such confidentiality is binding on both, the mediator and the parties. Moreover, anything revealed by one of the parties during a private session (or caucus) with the mediator is also expected to be confidential, and the mediator is supposed to not reveal the same during a joint session, without the explicit consent of the party.[5]This confidentiality, however, is not absolute and there are certain situations wherein it may become necessary to disclose otherwise confidential information before a court.
Types of mediation
Facilitative mediation – The mediators attempt to facilitate discussion and negotiation between the disputing parties. They do not make any suggestions, or propose any solutions to the parties; instead, they encourage them to collaborate and to reach a mutually-beneficial solution that suits each other’s interests and needs. It is unlikely for a facilitative mediator to express her own opinions about the dispute during the mediation.[6]
In India, facilitative mediation is the most common type of mediation used by mediators.
Evaluative mediation – The mediator is more directly and actively involved in this type of mediation, than in facilitative mediation. In this type, mediators tend to express their own opinions regarding the dispute and are likely to make recommendations. Rather than focusing on underlying interests, such mediation may also involve assessment of the parties’ legal positions and determining the fairness of the situation.[7]
In India, features of evaluative mediation are usually seen in the process of conciliation, under the Arbitration and Conciliation Act, 1996.
Advantages of mediation
Litigation, by virtue of being largely adversarial in nature, produces excessive disputing among the parties and has a win-lose context. It involves complex procedures and rules of evidence, and also leads to increased legal costs thanks to the payment of court fees and lawyers’ fees. It is not unusual for litigation to take years, or even decades to be completed, and the stakes also tend to get larger as the matter proceeds to higher levels of the judiciary. This elongated process often enhances the already significant costs and provides further opportunity for worsening relations between the disputing parties. It is entirely possible that the central issue in the dispute, which may be of an emotional or psychological nature, may not even be considered within the strict confines of the law. Finally, the parties themselves are unable to retain much control over litigation proceedings, as a result of which they may feel disempowered.[8]
Mediation provides solutions for these problems put forth by litigation. Mediation views disputing parties not as adversaries, but rather as collaborators who can work together to reach a mutually beneficial solution, which can result in a win-win situation. Parties are encouraged to openly communicate with each other and to try to understand each other’s interests at the heart of the dispute. There are no complicated procedures involved and it is overall significantly less expensive than litigation. Resolution by mediation is much faster and is not restricted to considerations of law, and parties are free to bring in emotional or commercial aspects during sessions. Since mediation helps tackle the actual issues underlying the dispute, the resulting settlement is very likely to be durable. It helps in sustaining relations between the parties and provides for a great deal of party autonomy.[9]
Mediation in India
Presently, there is no legislation in India solely governing mediation. However, there are provisions related to mediation and conciliation present in several statutes.
Under section 89 of the Code of Civil Procedure, if the court believes there to be a possibility of a settlement between the parties, it may refer the parties to one of the ADR mechanisms before it hears the matter.[10] Mediation is one such mechanism. Details regarding the manner of conduction of the court-mandated mediation are provided for in the Rules formulated by various High Courts. These rules often contain provisions regarding the appointment of mediators, the duty of mediators and procedures revolving mediation.[11] As mentioned earlier, court-annexed mediation is mandatory in nature as provided under Order X Rules 1-A, 1-B and 1-C of the Code of Civil Procedure, 1908.[12]
Under the Consumer Protection Act 2019, the District Commission may refer the disputing parties to mediation.[13] Under Chapter V of the Act, various provisions regarding empanelment of mediators, the nomination of mediators, duty of disclosure and procedure regarding mediation have also been provided. In case of failure to reach a settlement, the Commission may then proceed with hearing the complaint of the aggrieved party.[14]
The Commercial Courts Act 2015 is another legislation that provides for mandatory pre-litigation mediation. Under s 12A of the Act, there is a requirement for parties to the commercial dispute to exhaust the remedy of pre-institution mediation before a suit can be instituted.[15] If the parties are able to reach a settlement, then it is reduced into writing and is to be signed by the parties and the mediator. This settlement has the same effect as that of an arbitral award under s 30(4) of the Arbitration and Conciliation Act, 1996.[16]
While the Arbitration and Conciliation Act does not have provisions strictly applicable to mediation, given the relative similarities between mediation and conciliation, one can look to this Act for statutory guidance on matters such as disclosure of information and confidentiality.[17]
There have been some significant judgments which have clarified the position of law on some crucial aspects regarding ADR methods in India, including mediation. In the case of Salem Advocate Bar Association v Union of India, the Supreme Court held that section 89 required the courts to necessarily refer such matters for resolution by ADR means if it believed it to be appropriate depending on the facts of the case.[18] Moreover, it stated that the terms of settlement were to be settled by the parties before the mediator and not before the court. It also instructed High Courts to formulate rules for court-annexed mediation and establish mediator panels for the same.
The case of Afcons Infrastructure v Cherian Varkey Constructions comprehensively dealt with the court reference to each of the ADR methods listed under section 89 of the Code of Civil Procedure, 1908 including mediation.[19] It also laid down details regarding the laws applicable to each process and the enforcement of settlements in each situation.
In the case of Moti Ram (D) Tr. LRs and Anr v Ashok Kumar and Anr., the mediator had submitted the mediation report before the court.[20] The Supreme Court held that mediation proceedings were to be completely confidential in nature and that very limited information ought to be conveyed to the court regarding mediation sessions. It also held that the mediator should only submit the executed mediated agreement or merely a statement that mediation was unsuccessful, depending on the outcome. Elaborate details regarding the sessions were not to be revealed before the court.
Perspectives from other jurisdictions
The most striking difference between mediation in India and other jurisdictions is that while India does not have dedicated and comprehensive legislation on mediation, many other jurisdictions have detailed statutes.
Some key features regarding confidentiality and admissibility of mediation communications in Singapore and the United States of America have been highlighted below to give a multi-jurisdictional perspective.
Singapore
Mediation in Singapore is governed by the Mediation Act, 2017 which covers all types of mediations other than those mandated by courts, or community mediation.[21]
Mediations in Singapore courts are carried out on a ‘without prejudice’ basis. This is a common-law privilege which means that nothing disclosed during mediation sessions is admissible in any subsequent court proceedings. However, this privilege is not absolute and communications during mediation proceedings may be admissible in situations where the existence of the agreement itself is in question, or to determine whether the privilege has been waived by the parties.[22] Mediation communications are categorically confidential subject to exceptions such as the commission of an offense, seeking legal advice, preventing or minimizing the threat of injury to a person, as laid down under s 9.[23]
The principle of confidence in equality is also prevalent in relation to mediation in Singapore. As per this principle, any information obtained in confidence by a person cannot be used in an unauthorised manner. Relief may be granted in case of breach of such confidence. There are three principal elements of breach of confidence: – Firstly, the information sought to be protected must necessarily be of a nature required to be kept confidential. Secondly, the circumstances under which such information is conveyed ought to impose an obligation of confidentiality on the parties. And finally, there should have been misuse or unauthorised use of the information to the detriment of the party communicating it.[24]
The United States of America
There is specialised legislation on mediation called the Uniform Mediation Act, 2001. It provides that generally all communications in relation to the mediation, made before the commencement to the proceedings, during them, or after, would be privileged in nature. Such mediation communications, whether oral or written, could not be disclosed or even used in any proceedings before a judicial authority unless the confidentiality was waived, or the statute specifically had provisions to that effect.[25]
The mediation privilege incorporated in the Uniform Mediation Act is qualified in nature. As per its provisions, mediation communications may not be confidential if it is shown that the evidence would not be available otherwise, and that the interest in hearing such evidence is greater than that served by keeping the communication confidential, among other exceptions. This privilege is not applicable in cases where the relevant mediation communication is to be used in any kind of criminal proceedings.[26]
The privilege extends not just to the parties to the mediation and the mediator, but also to non-party participants to the mediation session.[27] It is quite significant to note that under section 6 of the Act, certain exceptions to the mediation privilege are explicitly laid down, such as ‘abuse of mediation processes, complaints of misconduct during the course of the mediation proceedings’, among others.[28]
Conclusion
Mediation is an ADR method is gaining popularity across jurisdictions including India and caters to various types of disputes. Particularly in the commercial arena, international mediation is likely to become even more prevalent thanks to the United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the Singapore Convention on Mediation.[29] This Convention provides a legal framework for the enforcement of settlements reached through mediation and does not require separate agreements to be entered into for them to legally binding. This is likely to make enforcement easier and is likely to increase the importance of mediation even further. Substantial legal developments in the field of mediation in India are awaited so that the potential of mediation as an amicable means of dispute resolution could be explored to the maximum extent possible.
[1] Sriram Panchu, Mediation Practice & Law: The Path to Successful Dispute Resolution (2nd edn, LexisNexis2015).
[2] ibid.
[3] Sriram Panchu, ‘The Road Less Travelled – An Increasingly Attractive Path’ (2007) 19(2) Student Bar Review 30.
[4]‘Mediation’ (American Bar Association)<https://www.americanbar.org/groups/dispute_resolution/resources/DisputeResolutionProcesses/mediation/> accessed 7 August 2020.
[5] Panchu (n 1) 24.
[6] ‘Types of Mediation: Choose the Type Best Suited to Your Conflict’
(Program on Negotiation – Harvard Law School 7 May 2020) <
https://www.pon.harvard.edu/daily/mediation/types-mediation-choose-type-best-suited-conflict/> accessed 8 August 2020.
[7] ibid.
[8] Panchu (n 1) 30.
[9] Panchu (n 3) 37.
[10] The Code of Civil Procedure 1908, s 89.
[11] For eg: Karnataka Civil Procedure (Mediation) Rules 2005 (Karnataka High Court), Mediation and Conciliation Rules 2004 (Delhi High Court).
[12] The Code of Civil Procedure 1908, order X rules 1-A, 1-B & 1-C.
[13] The Consumer Protection Act 2019, s 37.
[14] The Consumer Protection Act 2019, s 38.
[15] The Commercial Courts Act 2015, s 12A.
[16] The Arbitration and Conciliation Act 1996, s 30(4).
[17] The Arbitration and Conciliation Act 1996, s 70 & s 75.
[18] AIR 2003 SC 189.
[19] (2010) 8 SCC 2014.
[20] (2011) 1 SCC 466.
[21] ‘Mediation’ (Singapore Law Watch 2019) <https://www.singaporelawwatch.sg/About-Singapore-Law/Overview/ch-03-
mediation > accessed 9 August 2020.
[22] Ng Chee Weng v Lim Jit Ming Bryan [2012] 1 SLR 457.
[23] The Mediation Act 2017, s 9 & s 10.
[24] X Pte Ltd & Anor. v CDE [1992] 2 SLR(R) 575 996.
[25] The Uniform Mediation Act 2001, s 5.
[26] ibid.
[27] The Uniform Mediation Act 2001, s 4.
[28] The Uniform Mediation Act 2001, s 6.
[29] United Nations Convention on International Settlement Agreements Resulting from Mediation (adopted 20 December 2018, open for signature 7 August 2019).
-Ananya Patwardhan (IV Year, NLSIU Bangalore)
Ananya Patwardhan is a fourth-year student from the National Law School of India University (NLSIU), Bangalore.
BIMACC expresses its gratitude towards the author and to the members of the Legal Services Clinic, National Law School of India University (NLSIU) for their support in our collaborative efforts to promote ADR with this series titled “A-Z of ADR”. The purpose of this series is to increase the understanding of certain fundamental concepts of Alternative Dispute Resolution.
The Legal Services Clinic is a student-run committee that provides free legal services to the socially and the economically backward sections of the society who have difficulty accessing the judicial system. It also has a mandate of spreading legal awareness and providing free legal assistance to those who cannot afford it.
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Disclaimer: The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of BIMACC, any of the members of the Board, or the empanelled neutrals. This blog is for informative purpose only and does not constitute legal advice in any manner whatsoever.