Duty to Mediate

There is a duty on parties to a dispute to attempt to mediate the dispute and an obligation on opposing attorneys to encourage mediation, before litigation commences

On 25 August 2009 in the case of Brownlee v Brownlee heard in the South Gauteng High Court in Johannesburg, Acting Judge Brassey handed down a very important judgment on the duty of parties to a dispute to attempt to mediate the dispute and on the obligation of opposing attorneys to encourage mediation, before litigation commences. The judgment extols the virtues of mediation and capped the fees of the attorneys for both parties because they had failed to advise their clients to go to mediation at an early stage. Normally the unsuccessful litigant pays the costs of the successful one. The judge expressed his disapproval of the parties’ conduct by making each partybear his or her own costs. This case is likely to make it risky for attorneys not to advise their clients about mediation and for clients to unreasonably refuse to attempt mediation.

This is a summary of what the judge had to say:

In the opening paragraphs I said that the process by which this case had been resolved had been a tragedy. So it is, not so much because of the time taken to resolve the issues (as I have already said, the parties were commendably efficient in making the case ready for trail) but because of the legal costs that the parties will have to bear unless something is done to mitigate them. From the evidence it seemed to emerge that the cumulative costs will be at least R500 000 and may be as much as R750 000. That a sum of this nature might have been put to better use by the parties – for example, to defray the cost of private schooling for the children – goes without saying.

One of the matters that must be considered in a pre-trial conference is whether the dispute should be referred for possible settlement by mediation. In the present case the legal representatives of the parties had no hesitation in answering this question in the negative. As a result, the judge to whom this matter was originally allocated felt obliged to try to perform the role himself. Whether he is trained for the role is a matter into which I neither can nor wish to enquire. All that need be recorded here is that, in the course of the settlement process, he expressed views on the respective entitlements of the parties that prompted an application by the plaintiff for his recusal. In the normal way, the response of the other side should be neutral, for the issue is essentially one between the applicant for recusal and the court, but in the present case the respondent had no compunction in registering his opposition to the application. The case scarcely met the test for recusal, which is objective: a reasonable person is expected to know that judges are trained to divorce themselves from their preconceptions, especially those expressed in chambers. In the exercise of his discretion, however, the judge decided to grant the application lest the subjective apprehensions of the applicant should bedevil the effective resolution of the case.

When the plaintiff was busy testifying, I asked her whether the resolution of the case through mediation had been mooted by her legal advisers. She said it had not, but she went on to explain that she thought mediation would have served no purpose. Though this was her response to a question put by me, it is ultimately a matter on which, not being an expert, she can entertain no informed belief. Mediation can produce remarkable results in the most unpropitious of circumstances, especially when conducted by one of the several hundred people in this country who have been trained in the process. The success of the process lies in its very nature. Unlike settlement negotiations between legal advisers, in themselves frequently fruitful, the process is conducted by an independent expert who can, under conditions of the strictest confidentiality, isolate underlying interests, use the information to identify common ground and, by drawing on his or her own legal and other knowledge, sensitively encourage an evaluation of the prospects of success in the litigation and an appreciation of the costs and practical consequences of continued litigation, particularly if the case is a loser.

In the English decision of Egan v Motor Services (Bath) [2007] EWCA Civ 1002 the judge made scathing remarks about the fact that the parties spent substantially more in legal costs that the amount in dispute. In summary, this is what he had to say:

‘What I have found profoundly unsatisfactory, and made my views clear in the course of argument, is the fact that the parties have between them spent in the region of £100,000 arguing over a claim which is worth about £6,000. In the florid language of the argument, I regarded them, one or other, if not both, of them, as “completely cuckoo” to have engaged in such expensive litigation with so little at stake. At the time of writing this judgment I rightly do not know whether any, or if so what, attempts have been made to settle this case and the remarks that follow are of general application.I raise that matter again in this judgment to make the point, as firmly as I can, that this is a paradigm case which, if it could not have been settled by the parties themselves, customer and dealer, then it behoved both solicitors to take the firmest grip on the case from the first moment of instruction. That, I appreciate, may not always be easy, but perhaps a copy of this judgment can, at the first meeting, be handed to the client, bristling with righteous indignation, in this case the customer who has paid a small fortune for a motor car which does not meet his satisfaction, and the dealer anxious to preserve the reputation of his prestige product.“This case cries out for mediation”, should be the advice given to both the claimant and the defendant. Why? Because it is perfectly obvious what can happen. Feelings are running high, early positions are taken, positions become entrenched, the litigation bandwagon will roll on, experts are inevitably involved, and, before one knows it, there will be two/three day trial and even, heaven help them, an appeal. It is on the cards a wholly disproportionate sum, £100,000, will be to fight over a tiny claim, £6,000. And what benefit can mediation bring? It brings an air of reality to negotiations that, I accept, may well have taken place in this case. Mediation can do more for the parties than negotiation. In this case the sheer commercial folly could have been amply demonstrated to both parties sitting at the same table but hearing it come from somebody who is independent. At the time this dispute crystallised, the car was practically brand new. It would not have been vastly different from any demonstration car. The commercial possibilities are endless for finding an acceptable solution which would enable the parties to emerge, one with some satisfaction, perhaps a replacement vehicle and the other with its and Audi’s good name intact and probably enhanced, but perhaps with each of them just a little less wealthy. The cost of such a mediation would be paltry by comparison with the costs that would mount from the moment of the issue of the claim. In so many cases, and this is just another example of one, the best time to mediate is before the litigation begins. It is not a sign of weakness to suggest it. It is the hallmark of commonsense. Mediation is a perfectly proper adjunct to litigation. The skills are now well developed. The results are astonishingly good. Try it more often

If mediation is appropriate in commercial cases, how much more apposite is it in family disputes. They engage the gamut of emotions, from greed through pain to vengefulness; they generally involve the rights of children, majors as well as minors, who can only experience fear and bewilderment at the breakdown of the structures of love and support on which they, as family members, have come to depend; and the division of the estates of the parties, intertwined as they invariably are, can be very complex and are frequently made the more so by the parties’ bloody-mindedness and duplicity. Throughout the process, moreover, the legal costs come out of the common pot and, since they deplete the assets that can be used for the advancement of members of the family, must be the subject of continual concern and anxiety. Divorces proceedings are by their nature ‘traumatic events’: see Clemson v Clemson [2001] 1 All Sa 622 (W) at 627.

The Court expects attorneys acting on behalf of such people, as professional people and officers of the court, to display objectivity and sound common sense in assisting their clients. Fortunately most attorneys perform this task admirably. However there is a minority of attorneys who approach each divorce as a war between the two litigants. The rules of court and legal principles are utilised as weapons in a fight to destroy the opposition. As happens in most wars of attrition by the time the war has come to an end both sides have lost. There is now permanent hatred between the parties and their joint assets have been consumed to pay legal fees’

The responsibilities are especially difficult to discharge when the matrimonial bar is small and the practice of family law is so inbred. A limited number of practitioners perform the role and, while some rub along together well enough, others rub each other up the wrong way. Acrimony between legal representatives, which can carry over from one case to the next, easily produces an over-identification with the client’s cause and an attitude of win-at-all-costs. These emotions can act as a complete barrier to settlement. I cannot say whether the attorneys in the present case fell foul of this vice, but the correspondence suggests that they might have. Lawyers create the illusion that clients are solely responsible for the stances that are adopted in litigation, but of course their advice is profoundly influential and shapes the demands being made and strategies used to achieve them. With this in mind, the lawyers have much to answer for when a party requires the other ‘to vacate the matrimonial home forthwith’; when requests for particulars are deflected on the grounds of petty mistakes in the formulation of the questions; when there are interminable skirmishes over documents that result, eventually, in the production of bundles totalling almost 1000 pages, few of which have any direct bearing on the matter at hand; and when the parties threaten each other with criminal proceedings and respond by saying that the threat is being dismissed ‘with the contempt it deserves’. In a very real sense, this was a case in which, if the parties did not need mediation, the legal representatives certainly could have profited by it.

I am given to understand that in England the all but obligatory recourse to mediation has profoundly improved the process of dispute resolution. Parties resolve their problems so much more cheaply as a result and the burden on the court rolls has been considerably lightened. Informed estimates put the success rate of mediation at between eighty and ninety percent. For present purposes it is unnecessary, indeed undesirable, for me to say more about the general imperatives that favour mediation as a means of settling cases. I do not even feel the need to say much more about the need for mediation in family disputes. But I can say with confidence that the parties would have been well served if they had submitted this dispute to mediation and then fought out, if fight they must, the one or two issues of fundamental concern to them.

A single instance drawn from the proceedings is enough to make the point tellingly. In the course of argument, I put the point to the parties that I have made above: namely, that by the manner in which the inheritance is used, Sheldon’s natural father can, as it were, make a posthumous contribution to his education.

Employing this principle might, I suggested, justify the conclusion that the defendant should bear one third of the costs of the boy’s schooling and the plaintiff should shoulder the balance out of income and inherited capital. The suggestion met with the defendant’s immediate approval and the plaintiff, albeit somewhat more grudgingly, acknowledged that it would certainly be equitable. No longer, it will be observed, was this an issue of principle entailing a consideration, through the process of judging, of rights and duties; now it was a practical problem with an eminently practical solution that, emerging out of potential consensus, placed a premium on the dignity of the parties as autonomous adults and provided an affirmation, symbolically important, of the bond that in happier times developed between the defendant and his putative son. How much richer would this solution have been had it emerged out of a consensus-seeking process rather than in adversarial proceedings in which positions were taken up that gave every appearance of callousness and cruelty.

This is but an instance of what mediation might have achieved. In fact the benefits go well beyond it. In the process of mediation, the parties would have had ample scope for an informed but informal debate on the levels of their estates, the amount of their incomes and the extent of their living costs. Nudged by a facilitative intermediary, I have little doubt that they would have been able to solve most of the monetary disputes that stood between them. The saving in time and legal costs would have been significant and, once a few breakthroughs had been made, I have every reason to believe that an overall solution would have been reached. Everyone would, in the process, have been spared the burden of two wasted days trying to settle in judge’s chambers and four further days in which the minutiae of assets and liabilities and income and expenses were interrogated.

In short, mediation was the better alternative and it should have been tried. On the facts before me it is impossible to know whether the parties knew about the benefits of mediation, but I can see no reason why they would have turned their backs on the process, especially if they had been counselled on the matter by the attorneys. What is clear, however, is that the attorneys did not provide this counsel; in fact, in the course of the pre-trial conference they positively rejected the use of the process. For this they are to blame and they must, I believe, shoulder the responsibility that comes from failing properly to serve the interests of their clients.

In the course of the hearing, I asked counsel whether I had the power to cap the fees that the lawyers might derive from the case, and it was agreed that this is indeed my right. I can find nothing in the conduct of counsel to warrant such a move – they take their instructions from the attorney – but I am persuaded that the failure of the attorneys to send this matter to mediation at an early stage should be visited by the court’s displeasure. On this basis, I propose to limit the fees they can recover from their clients to the costs they can tax on a party and party scale. The client retains the right to pay more, but the attorney should not ask for this unless the client has obtained the advice of an independent practitioner.

In the matter of costs as between the parties, I have an overriding discretion. From what I have said, it will be clear that I disapprove of the way the dispute has been ventilates, and I cannot believe that the parties are blameless on this score. The plaintiff, who made a very impressive witness, made unreasonable claims in the litigation (forfeiture of benefits being among them) and the defendant was anything but candid about his earnings. It is true that the defendant made an open tender which the plaintiff has beaten, but not by much. I can see no reason why either should bear the costs of the other, and this is the order I propose to make.

Each party shall bear his or her own costs –

7.1. which may encompass disbursements (including counsel’s fees),

7.2. but, as to the fees claimable by the attorney, shall not exceed the costs recoverable on a party and party basis –

7.2.1. as taxed

7.2.2. or, following advice received from an independent legal practitioner, as agreed.

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