Advocate John Aycock analyses how the economic downturn has helped persuade parties to embrace the concept of mediation

Sometimes it takes an economic reality check for there to be a dose of common sense. For years, many legal advisers have been advocating the benefits of mediating disputes. It seems that finally Isle of Man litigants are turning more and more to this form of dispute resolution.

The concept of mediation has been around for decades and has accelerated at various speeds in differing jurisdictions. It was never going to be an overnight success. The litigation culture had to be changed. Parties who regularly engaged in High Court disputes did not want to be perceived as weak by seeking an alternative form of dispute resolution. Defendant companies would establish a generous legal budget and use it up by defending cases all the way to trial.

It is, then, one of the more pleasant side effects of current austerity that more and more parties involved in disputes are taking up the option of mediation. The success rate of mediation is good. Its advantages are well established. Moreover, accredited mediators are gaining valuable experience and a skilful mediator is the key to unlocking intransigent parties.

Mediation is confidential, independent and voluntary. Above all, however, it is highly flexible and engages the parties themselves in constructing an acceptable settlement. The settlement is not imposed upon the parties by anyone. Stress levels are lower at mediation because of the informality and mediation is likely to be far cheaper and quicker than undertaking the full High Court process.

You might therefore wonder why mediation has not been routinely used. The answer is that you cannot change a culture overnight. This needed a helping hand. As well as the economic downturn, the new set of High Court Rules introduced here in September 2009 for the first time gave codified recognition and process to the concept of mediation. Rule 7.83 of the 2009 Rules allows a party to apply for a referral to mediation although this does depend upon all party consent.

The Manx judiciary has actively encouraged mediation of disputes. In June 2012, His Honour The First Deemster David Doyle made it quite clear that the court expected parties to make every effort to resolve their dispute without recourse to "expensive and protracted legal proceedings". Deemster Doyle stated in Re Isis Investments (in liquidation) and others [7 June 2012]: "If they [issues in dispute] cannot be resolved by sensible negotiation, mediation and settlement then judicial determination will be necessary. Legal proceedings should however normally be the last resort of the parties."

For employment lawyers, the concept of trying to mediate every dispute goes back more than twenty years. The government run Manx Industrial Relations Service (like ACAS in the UK) has for years provided valuable independent conciliation of all Employment Tribunal disputes. This has greatly reduced the number of Employment Tribunal claims that reach hearing. MIRS promotes conciliation by actively contacting the parties to each claim filed.

In court cases it is the parties whom initiate mediation. With the new procedural code providing the framework and the Manx judiciary actively encouraging mediation, few see an offer to mediate as any sign of weakness nowadays. In fact, if a party is not prepared to mediate then it may need to have a good explanation for taking that stance. The manner in which a party litigates (conduct before and during proceedings) is a material costs consideration at the end of the case.

The tightening of belts has therefore forced the hand of some litigating parties. The culture now seems to be changing quite rapidly. The psychological barrier is being broken down. The mediation dam is being breached and the initial trickle of disputes being referred to mediation is now turning into a healthy flow.

John Aycock is head of disputes and employment law at M&P Legal and is an accredited employment and workplace mediator

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