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Motivate to Mediate – The Carrot and the Stick

Annmarie Carvalho, Associate and Family Mediator with Farrer & Co LLP, examines two recent High Court cases which illustrate the court’s powers to ‘encourage’ parties into mediation.

Annmarie Carvalho, associate, Farrer & Co LLP

Annmarie Carvalho, Associate and Family Mediator, Farrer & Co LLP

Mediation has been the buzz word in family law throughout 2014 and this shows no sign of abating with the Ministry of Justice's announcement on 3 November that, in circumstances where one party is legally aided, the government will now fund both parties' attendance at one session of mediation.

Reported cases which focus on mediation are somewhat few and far between; not surprising given the 'without prejudice' nature of mediation. However, there have been two interesting cases reported recently which looked at the extent of the court's powers to 'encourage' parties into mediation and also the possible costs implications for a party who behaves unreasonably in relation to mediation, either by refusing to attend or in some other way.

Since section 10 of the Children and Families Act 2014 came into force on 22 April this year, any applicant in a children or financial dispute is required to attend a MIAM prior to issuing proceedings (unless exempt) and respondents are also encouraged to participate in at least a MIAM. The court also has a general duty, enshrined in r3.3(1) of the Family Procedure Rules 2010, to consider non-court dispute resolution at every stage of proceedings. . Rule 3.3(2) sets out the factors that the court will take into account in deciding whether non-court dispute resolution is appropriate, which include whether the parties have attended a MIAM and/or mediation.

Mann v Mann [2014] EWHC 537 (Fam)
In this case
Mostyn J delivered a judgment regarding a wife's enforcement proceedings against the husband in respect of sums owing under a court order for financial relief.  The husband had sought to prevent the wife bringing those proceedings on the basis that she had signed an agreement to mediate within a specified timescale in relation to the dispute; an agreement which she later reneged on. The agreement to mediate had also recorded the fact that the parties intended that agreement to be binding.

Mostyn J highlighted in his judgment the fact that enforcement proceedings are not governed by FPR Part 9; which is the procedure for applications for a financial remedy. This is the procedure which includes the requirement for court-led mediation in the form of the Financial Dispute Resolution appointment. Mostyn J said that: 'since an enforcement application was not governed by FPR Pt 9 and so did not have a procedure for financial dispute resolution, the court could not compel the parties to such an application to engage in mediation'.

Aside from the requirement on an applicant to children or financial proceedings to attend a MIAM and the requirement for both parties to attend an FDR in financial proceedings, there is no compulsion to mediate in family proceedings. Neither a MIAM nor an FDR can be said to be mediation in the true sense of the word, given that the former provides only information about mediation and other non-court DR options and the latter, nine times out of ten, involves limited if any interaction and communication between the parties.

Given that Mostyn J did not have the power to compel the parties to mediate, he used the court's general powers under FPR r3.4(1)(b) to adjourn the application for a specified period to enable non-court DR to take place, in this case for 8 weeks. He noted that judges only have such a power under the FPR 'if the parties agree' and recommended that the Family Procedure Committee consider removing this requirement to bring the rules into line with the CPR which do not contain such a requirement. In this case, given that there had previously been an agreement to mediate, Mostyn J decided that this was sufficient for him to adjourn proceedings. He also said that, while 'parties could not be compelled to engage in the mediation…the court could robustly encourage engagement by means of an order in terms that failure to justify a decision not to engage in mediation could result in costs sanctions'. This could be so 'even if the refusing party were ultimately successful in the proceedings'.

H v W [2014] EWHC 2846 (Fam)
This was primarily a wife's application for costs, decided in the High Court: Family Division by Eleanor King J.

The original judge had made a joint lives maintenance order in favour of the wife as well as an order that she receive 25% of the husband's annual bonus on a joint lives basis. Upon the husband's appeal, Mostyn J (again) gave permission to appeal in relation to the bonus, indicating that a cap should be put on the share of the bonus to be received by the wife. A direction was then made for the parties to engage in mediation. The husband was willing to engage in mediation and offered to pay for the wife's costs of the sessions. However, the mediation failed as the identity of the mediator could not be agreed (with the wife insisting on using a top price mediator) and also seeking for her legal representative to be present during the mediation. 

The husband's appeal was allowed in part, in relation to the bonus, with Eleanor King J agreeing that a cap should be placed on the wife's entitlement (see H v W [2013] EWHC 4105 (Fam)). Given that this was an appeal, the judge decided that this took it outside the realm of financial remedy proceedings and the general rule 28.3(5) regarding costs that 'the court will not make an order requiring one party to pay the costs of another party' subject to conduct. However, the judge also did not find herself bound by CPR r44.3(2)(a) that costs follow the event. She therefore approached the issue of whether there should be an order for costs with a 'clean sheet'. Her conclusion was that, in light of the wife's unreasonable behaviour in relation to the mediation, she was ordered to pay the husband's costs of £22,320.

These two cases indicate an increasing willingness by judges to use what powers they do have to encourage parties to mediate and to impose sanctions if they adopt an unnecessarily combative approach.

In particular, Mostyn J's judgment indicated that he would like to go further and to adjourn proceedings for non-court dispute resolution to take place, absent of the parties' agreement to do so. Some say that this would contradict the voluntary nature of mediation, and thereby its effectiveness. For example, the recent Mapping Paths to Family Justice three year research project into non-court DR found that those participants who had been less keen to enter into mediation than the other party tended to get less out of the process and be more dissatisfied with it.

Having said that, this study also exposed the frustration of many of those going through family proceedings at the ability of the other party to block the other's choice of non-court DR. This exposes the Catch-22 at the heart of most non-court DR methods: that their voluntary nature is both their hallmark and their Achilles' heel. However, given the recent falling rates in mediation despite the extensive publicity it has received, it may well be that Mostyn J's view that the Rules Committee do need to go further to encourage recalcitrant or just unsure litigants out of the courts and into the mediation rooms is the right one.