On the 9th March 2020, a new High Court rule, Rule 41A, came into effect. The Rule makes it mandatory for parties to consider mediation before pursuing any contemplated litigation. This requires that as summons or applications, pleas or opposing papers are served, plaintiffs and defendants must exchange mediation Notices indicating whether they agree to or oppose the referral of their matter to mediation, and why. In addition, at any stage before judgement parties may agree to refer the dispute between them to mediation and a Judge or a Case Management Judge may direct parties to consider referral of a dispute to mediation.
Where a dispute is referred to mediation, the parties will be required to file a Joint Minute, recording their mutual decision to enter into an Agreement to Mediate. The mediation process must be concluded within 30 days of the date of signature of the Minute. At the conclusion of the mediation proceedings, the parties must file a further Joint Minute indicating to the Court whether a full, partial or no settlement was reached. The parties must also clarify the issues on which an agreement was reached and therefore will not require a hearing.
When an order for costs of the action or application is considered, the Court may have regard to the initial Notices referred above or any without prejudice offer or tender made by a party at any time before judgment has been given. It is anticipated that a party that unreasonably refuses to mediate may face an adverse costs order.
COVID-19 and the introduction of Rule 41A might be considered a perfect storm in that just as our world was turned upside down by COVID, mediation was presented as a mechanism to streamline dispute resolution. Indeed, COVID-19 not only curtailed the functioning of the Courts thereby exacerbating backlogs and waiting lists, but it also increased the range of potential disputes, including commercial disputes over tenancy agreements, medical negligence and COVID-19 breach-related disputes. Mediation in terms of Rule 41A is an alternative to waiting for the Courts to function normally and it also presents an ideal opportunity to deal with many ‘new’ dispute types, especially those where relationships are key and delays are to the detriment of both parties.
Litigants and their representatives need to understand their roles and responsibilities in terms of Rule 41A. Not only are there questions of compliance but there is also much to learn about how to prepare for mediation and how to get the best out of mediation. In particular, lawyers who are generally more familiar with the role of gladiator must now wear the hat of problem-solver. The also parties and their representatives have various responsibilities to keep the Court informed of the progress of the mediation and of its completion.
It is just as important for mediators to know how to work with Rule 41A. Once the parties have agreed to mediate, they must enter into an Agreement to Mediate and appoint a suitably qualified mediator. The mediator can assist in drafting the Agreement to Mediate and in guiding the parties in their drafting of the Settlement Agreement.
Rule 41A is a powerful tool in the South African legal system and if used effectively by parties, their representatives and mediators it could make a considerable impact on the management of litigation in the High Courts. Join our webinar on Rule on 18 March 2021, to learn about how you can best use this tool.