Friday, November 20, 2015

Mediation in South Africa

Mediation is not a new concept in South Africa, however it is an under utilized mechanism in the field of dispute resolution.

There are obviously many factors that contributes to the current status of mediation, but one of the main reasons for this is probably ignorance and stigma. People in general are reluctant to consider that many disputes can be resolved without having to go to court. Many may feel that they “want their day in court“. A family member was recently involved in a motor vehicle accident. Someone smashed into the back of her vehicle and then drove off. This obviously constitutes a crime in South Africa and accordingly criminal charges were laid. I was then ask by this person if I knew any good lawyers that can handle the civil claim for damages. I then suggested that she first consider using a mediator, but she didn’t want anything to do with it, because she “wanted to have her day in court“. Sad, but true!

I attended a business networking function a few weeks ago. During a general conversation someone asked me about mediation and how it works. Well, this ended in a huge debate amongst everyone present. There were also two lawyers present and they completely opposed the process. Some of the concerns they raised were very valid and I supported it, however it became clear that their biggest concern was losing money! Not all lawyers oppose mediation, but at the same time very few will recommend mediation to their clients.

So what is this mediation and where do we (South Africa) stand with mediation?

The Centre for Effective Dispute Resolution defines mediation as

“…a flexible process conducted confidentially in which a neutral person actively assists parties in working towards a negotiated agreement of a dispute or difference, with the parties in ultimate control of the decision to settle and the terms of the resolution.”

Mediation is gaining momentum in South Africa. Although a court can only suggest that a parties in a dispute consider mediation, this process is a legally binding “out-of-court” process. In other words, even if it is not suggested by a court, or parties themselves decide to use mediation, the result or outcome of mediation will be legally binding on the parties. As a method of resolving issues between parties, mediation is much more cost effective than litigation, [i]ie. court case involving attorneys or advocates[/]. In general mediation is less than 1% of the cost of normal legal processes and roughly 90% of cases are solved in just one day, so it is not only cost effective, but disputes are resolved quickly.

Apart from just the cost factor, there’s also other factors that should be considered. With mediation, there is not a judge who makes a decision on everyone’s behalf. The mediator facilitates communication between parties and the parties themselves are the one’s who settle on an agreement.

In a court, parties are not allowed to talk or address one another, whereas in mediation this is encouraged. In court, once the litigation process starts you are bound, whereas with mediation, any party can withdraw from the mediation proceedings at any given time.

With litigation the “theme” of parties are normally “revenge”, thus interests and feelings are not taken into account by the courts. In mediation, the surrounding circumstances plays a more important role and “revenge attitudes” don’t play a role.

There are a lot more comparatives one can list, but mediation is more aligned with South Africa’s Constitutional values. Litigation will always play an important role as the primary dispute resolution mechanism and the aim of mediation is not to discredit or undermine litigation or the general legal fraternity. Both mechanisms can play a critical role in dispute resolution if it is realised that at the end of the day the mechanism used to resolve the dispute should be the one in the best interest of the parties.

There are still many obstacles to overcome in South Africa when we talk about mediation. I’ve mentioned only a few of these obstacles, however we’ve also had many successes. In 2009, the South Gauteng High Court in the case of Brownlee v Brownlee expressed displeasure at attorneys who did not advise their clients to mediate before venturing to court. The court went so far as to limit the costs that the attorneys, who failed to mediate, could recover from their clients. Albeit very positive from a judicial precedent perspective and a judicial activism perspective, our courts and the legal profession in general has basically ignored the sentiment in Brownlee. In 2014 the Magistrates Court Act was amended to include court-annexed mediation. Although this is still in the trial phases it is a positive move towards mediation. We also find reference in support of mediation in other legislation, such as the Companies Act or in reports such as the King III Report on Corporate Governance.

At the time of writing, the South African legislature passed more than 35 statutes that makes reference in support of mediation. We can therefore argue that mediation is without a doubt recognised in our law, but why do we still find the slow growth in momentum?
I am of the opinion that the following plays a vital role:

  • The judiciary is not promoting mediation - I am not saying they should make orders to mediate, because that will go against the grain of mediation which is a voluntary process. What I am saying is that the judiciary should inquire into whether mediation was presented as an option to clients. If not, then the process can be explained to litigants who can then decide to voluntarily enter into mediation.
  • The legal profession needs to look at mediation holistically. I find that currently they are so focussed and blinded by the prospect of decreases in revenue that they fail to recognise the benefits that will counteract their fear of such perceived revenue losses.
  • Mediators themselves are causing slow growth. In South Africa, no “formal” qualification is required to become a mediator. You only need to do a certain fixed amount of hours training, do a practical test and then you receive your certification. However, when looking at the guideline for charges specified for court-annexed mediation, one can easily be persuaded into thinking this is a lucrative business with very high earning potentials. Mediators need to use “yardsticks” to determine expenses and even consider doing pro bono mediations in order to gain experience. EXAMPLE Why would a person pay R4000 per day to have a dispute mediated, if the civil claim is only worth R1000? This is the monetary aspects, however it can not be ignored that the first question ask by a party introduced to mediation is, “How much will it cost?“. Furthermore mediators need to be cognisant of other factors, such Small Claims Court, etc. What I am basically saying is that mediators themselves are causing slow growth in this sector.

All is however not lost for mediation and in the years to come it will play a critical role in dispute resolutions. The WCAM is actively involved in campaigns to take mediation to the people and create awareness. We openly invite anyone to contact us if they require more information on mediation or if they require us to speak about mediation at events.

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