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Mediation Not Always The Answer: Atlantic Shellfish Ltd v County Council of the County of Cork

AUTHOR(S): Nicola Dunleavy
PRACTICE AREA GROUP: Commercial Litigation and Dispute Resolution
DATE: 11.08.2016

The Irish Superior Court Rules (the “Rules”) allow Judges to adjourn Court proceedings and invite disputing parties to mediate. If one party refuses the invitation, the Courts may take that refusal into account when awarding costs and may even penalise a successful party that refused a Court invitation to mediate. Recently, the Court of Appeal considered the circumstances in which a Court should exercise its discretion to make an Order inviting parties to litigation to engage in mediation.

Facts and High Court Ruling

Atlantic Shellfish operated an oyster fishery in Cork Harbour until 2002 when the fishery closed due to sewage contamination. The contamination was allegedly caused by discharges from a sewage scheme operated by Cork County Council(1) in the nearby town of Middleton. Atlantic Shellfish commenced High Court proceedings against the Council for damages and other reliefs and invited the Council to mediate. After the Council refused to mediate, Atlantic Shellfish asked the High Court to invite the parties to mediate the dispute. The High Court refused to invite the parties to mediate on the basis that the real purpose of the request was to take advantage of the Court rules that allow the Courts to penalise a party in costs for refusing to mediate. Atlantic Shellfish appealed the High Court’s refusal to the Court of Appeal.

Court of Appeal Judgment

The Court of Appeal upheld the High Court’s decision, finding that the Courts should only invite parties to mediate if the issues in dispute between the parties are amenable to mediation. The Court of Appeal set out a non-exhaustive list of factors to consider in deciding whether to adjourn proceedings to facilitate mediation, including:

  • the manner in which the parties had conducted the case up to the application;
  • the nature and potential expense of the proposed mediation;
  • the likely effect on the progress of the case if the invitation was accepted and the mediation was unsuccessful;
  • the potential saving in time and costs that might result from the acceptance of an invitation;
  • the extent to which mediation might narrow the issues between the parties;
  • any proposals made by the applicant in relation to the issues that might be dealt with in the mediation; and
  • any proposals as to how the costs of such a process might be dealt with.

Taking the above factors into account, the Court of Appeal decided that it was inappropriate to invite the parties to mediate as the Court was not convinced that mediation could determine any of the legal issues in the case. In addition, the Court stated that it was not unreasonable for the Council to refuse to mediate as the case raised novel and complex issues around the Council’s legal obligations. The Court held that it was reasonable for the Council to seek to have those obligations determined by the Court.

Comment

Although the parties were not invited to mediate in this case, the Court of Appeal emphasised the importance of encouraging parties to resolve their disputes through alternative dispute resolution processes such as mediation. However, a party should consider the appropriateness of mediation to the particular dispute before requesting the Court to invite the parties to mediate.

Draft Heads of the Mediation Bill, which is intended to promote mediation as a viable, effective and efficient alternative to Court proceedings, were drafted in 2012 and the Bill has been included in the Government’s recently published 2016 Legislation Programme. It will be interesting to see how the Bill, once published, will impact on the use of mediation in the future.

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1. [2015] IECA 283

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