Rule 41A – What does it mean for parties to litigation in the High Courts of South Africa?

13 March 2020

High Court Rule 41A came into operation on 9th March. The Rule seeks to encourage litigants to refer their disputes to mediation before proceeding with litigation. This is very good news for litigants who want quick, cheap and fair settlements of their disputes. It is also good news for the South African economy at a time when it needs all the assistance it can get. A big advantage of mediation in the present climate is that it can be done remotely, whereas litigation cant.

In a recent survey of 12 000 civil mediation cases in the United Kingdom it was found that 89% of the cases were settled and that the average time spent in mediation was 16.3 hours. The total value of cases mediated in a year was approximately 11 million Pounds and, by achieving earlier resolution of cases that would otherwise burden the courts, business was saved about 3 billion Pounds a year in wasted management time, damaged relationships, lost productivity and legal costs. Rule 41A has the potential to replicate this in South Africa and is a cause for celebration.

The first question that litigants who want to mediate ask about the Rule is, can a reluctant opponent be compelled to mediate? The answer to that question is not simple. On the face of it the answer may appear to be no, because the Rule expressly defines mediation as a voluntary process (see Rule 41A (1). However, it goes on to require that, at the time that a party commences any litigation over any dispute in the High Court, it must serve a notice on all other parties to the litigation indicating whether it agrees or opposes referral of the dispute to mediation (see Rule 41A (2) (a)). The other parties must then serve a notice on the plaintiff or applicant and indicate whether they agree or oppose referral of the dispute to mediation (see Rule 41A (2) (b)).

In their notices, the Rule states that the parties must “clearly and concisely indicate the reasons for” their “belief that the dispute is or is not capable of being mediated" (see Rule 41A (2) (c)). This is a rather strange choice of wording, as it is difficult to think of any dispute that is not capable of being mediated. However, what the drafters probably had in mind were situations when, for some good reason like that mediation has already failed, or a that a party needs to establish a legal precedent, it would not be reasonable to refer the dispute to mediation.

In many foreign jurisdictions, courts make adverse costs awards against parties who unreasonably refuse to refer a dispute to mediation, and this has proved to be a major inducement to parties to agree to mediation. Whereas Rule 41A does not expressly say that a Court may do this, it does state that, when an order for costs of the action or application is considered, a Court may have regard to what the parties say in their notices. The most obvious inference from this is that a Court may make an adverse costs award against a party who unreasonably refuses to mediate. This certainly falls within the Court’s discretionary powers and there does exist precedent for it in our law (see MB v NB 2010 (3) SA 220 (GSJ)).

In order to make it difficult for a reluctant party to refuse to mediate, it is advisable for the proposer to suggest a skilled, trained and accredited mediator because it will probably be reasonable to refuse to refer a dispute to an unskilled, untrained and unaccredited mediator. Conflict Dynamics can help in this regard (CD Direct mediators). It would also be advisable to propose a reasonable agreement to mediate and, again, Conflict Dynamics can help provide parties with such an agreement 

Hopefully, the High Courts will use Rule 41A to assist willing parties to get unwilling ones to mediate, and that mediation will lessen the Courts’ litigation load and prove to be a major boost to access to speedy, cheap and quality justice!

JOHN BRAND

- John Brand