MEDIATION AND RULE 41A
The operation of this Rule holds exciting times for conflict resolution in South Africa. The operation of the rule from 9 March 2020 entrenches mediation as a formal concept both in and outside of the litigation process. Below is a brief explanation regarding the operation of Rule 41A.
MEDIATION UNDER RULE 41A IS DEFINED AS A VOLUNTARY PROCESS
Rule 41A(2)(a) requires a plaintiff/applicant when issuing summons or motions to serve on the defendant or defendants a notice indicating whether the plaintiff agrees to or opposes referral of the dispute to mediation.
Rule 41A(2)(b) states that a defendant or respondent shall when delivering an appearance to defend, or at any time later but not later than the delivery of a plea/opposing affidavit serve a notice indicating whether it agrees to or opposes referral to mediation.
Rule 41A(2)(c) requires both of the above mentioned notices to clearly and concisely indicate the reasons for each such party’s belief that the dispute is or is not capable of being mediated. These notices are without prejudice and should not be filed at court.
We find this to be a constructive step towards promoting early and meaningful engagement between the parties. Further, the requirement to serve such a notice is peremptory rather than optional.
Rule 41A(3)(a) holds that parties can at any stage before judgment, agree to refer a matter to mediation, provided however that if the trial or application has started this can only be done with leave of the court. This means that the stage at which mediation can be utilized is pretty limitless.
Rule 41A(3)(b) states that a judge or Judicial Management Judge may direct that the parties consider referral to mediation whereupon parties may agree.
It is noted that the provision empowers the judge to issue an instruction to consider mediation rather than order mediation itself.
With the costs risk associated with a refusal, we believe this to an exceptionally strong provision.
WHAT HAPPENS WHEN THE PARTIES HAVE DECIDED TO REFER A DISPUTE FOR MEDIATION
Rule 41A(4)(a) requires the parties deliver a joint signed minute recording their election and the (b) subsection requires them to enter into an agreement to mediate.
Rule 41A(4)(c) provides that time limits for pleadings and notices shall be suspended for every party to the dispute from date of signature to conclusion of the mediation. Any party who considers that the suspension is being abused can apply to have it uplifted.
There is little doubt that there shall be attempts to abuse the court process and that notices calling for mediation shall be utilized as a dilatory tactic. In anticipation of this, the court has afforded us Rule 41A(4)(c) thus providing a remedy to such dilatory tactics.
A time limit has also been set out in the (d) subsection of sub-rule (4) requiring the mediation process to be concluded within 30 days of signature of the joint minute.
WHAT IF SOME PARTIES TO THE ACTION WISH TO MEDIATE AND OTHERS NOT
Rule 41A(5)(a) provides that where there are multiple parties to an action and some are agreeable to mediation while others not, the parties agreeable may proceed notwithstanding any other party’s refusal to mediate.
Again, time limits for delivery of pleadings and notices shall be suspended for every party from date of signature of the joint minute until conclusion of the mediation. The same relief here is afforded to parties who feel that the process is being abused.
It is important to note that parties can agree to refer some issues to mediation and allow other remaining issues to proceed to litigation.
DISCOVERY AND THE NOTICE CONFIRMING CONCLUSION OF MEDIATION
Except as provided by law or discoverable in terms of the Rules or agreed, all communications and disclosures, oral or written made at mediation shall be confidential and inadmissible.
The nature of mediation is such that it is without prejudice.
Rule 41A(7) requires the party who called for mediation to inform the registrar by notice that the mediation has been completed.
In the event that the party fails to deliver such notice, the suspension of time limits shall nonetheless lapse unless a Judge or court has extended it and notice has been given to all parties within 5 days of such order.
DEEMING PROVISION
Rule 41A(8) (a) states that the mediation shall be deemed to be completed within 30 days from signature of the joint minute and this is when time limit suspension shall lapse. However, where the mediation is completed before the 30 day period, parties shall deliver a notice indicating that mediation is completed. While the rule does not say so specifically, we assume that early delivery of such a notice shall also result in the lapse of time limit suspensions.
FILING OF MINUTE POST-MEDIATION
Parties to the mediation shall within 5 days issue a joint minute setting out:
- Whether full or partial settlement was reached or whether the mediation was successful or not;
- The issues upon which settlement was reached and which do not require hearing by the court;
The minute is the joint responsibility of the parties, not just the plaintiff.
Important to remember is that no tender made without prejudice shall be disclosed to the court at any time before judgment is given. Where the parties have reached settlement at mediation, Rule 41 shall apply.
WHO COVERS THE COSTS OF MEDIATION
Rule 41A(9) (a) states that unless agreed otherwise, parties to the mediation shall share the costs equally by the parties participating.
The (b) subsection of the sub-rule states that where an order for costs is considered, the court may have regard to the notices served by the parties in relation to whether they were prepared to agree to mediation or not and at this point any offers or tenders made can be brought to the attention of the court.
This sub-rule provides enormous motivation for the parties to consider mediation as an alternative dispute resolution method or to face the risk of an adverse costs order.