Mediation Rule 41A of the High Court

COVID-19 has put the new Mediation Rule 41A of the High Court at the centre of our legal system. Attorneys are seeing their world turn upside down by social distancing and many are scrambling to understand how Rule 41A and online mediation will help them resolve their clients’ cases. However, it creates a problem-solving environment where a skilful and experienced mediator can help attorneys settle their clients’ cases or limit the issues in dispute.

Written by Jacques Joubert, Advocate of the High Court of the Republic of South Africa, for LexisNexis South Africa.

[Durban, 12 May 2020]

COVID-19 has put the new Mediation Rule 41A of the High Court at the centre of our legal system. Attorneys are seeing their world turn upside down by social distancing and many are scrambling to understand how Rule 41A and online mediation will help them resolve their clients’ cases. They have many questions, especially about their role in mediation and how they prepare for mediation. Few have experienced online mediation.

This is how Rule 41A prepares the ground for litigants to mediate, before they venture to court.

Sub rule (2)(a) compels a plaintiff or applicant to file a prescribed Rule 41A Notice of agreeing or opposing mediation, before summons or motions may be issued.

Secondly, sub rule (2)(b) compels the defendant or respondent to also file a prescribed Rule 41A Notice of agreeing or opposing mediation, before a plea or opposing papers may be issued.

The above notices according to sub rule (2)(c) have to be substantially in accordance with Form 27 of the First Schedule.  According to sub rule (2)(d) the said notices will be without prejudice and not filed with the Registrar.

The purpose is not to disclose the parties’ positions in regard to mediation to the trial judge, until the end of the trial.

If one or both parties decide to oppose mediation, then they have to clearly and concisely indicate reasons in their sub rule (2) Notices that the case is or is not capable of being mediated.

An example that springs to mind is where urgent relief is required from the court. It is expected as in the UK that case law will develop to give attorneys guidance on whether a dispute can be mediated or not.

It is however likely that in the majority of cases the parties will give notice in terms of sub rule (2) that their case is capable of mediation.  They would do so rather than take the risk of an adverse cost order at the end of the trial.^[1]

The purpose of sub rule (2) is to compel parties to announce their positions on mediation early on.

It does not automatically open the door to mediation. The Rule requires a second step, namely a formal referral to mediation.

Sub rule (3) provides that the parties may at any stage of the proceedings, notwithstanding sub rule (2), refer their dispute to mediation, provided that leave of the court is necessary if the hearing has commenced.

Or a judge or Rule 37A case management judge may in terms of (3)(b) direct the parties to consider referring a dispute to mediation.

Sub rule (3} does not however explain how the referral to mediation takes place. Sub rules (4)(a) and (b) show the way.

The first step is for the parties to file a Joint Minute in terms of sub rule 4(a) that records their decision to mediate the dispute or any aspect of the dispute.

The second step in terms of sub-rule (4)(b) is for the parties to enter into an Agreement to Mediate.

The norm in mediation practice is that the parties sign an agreement to mediate before mediation and in which they agree on the following:

1. Appointment of a suitably qualified mediator;
2. The costs^[2] of the mediation, including the costs of the mediator;
3. When and where the mediation is to take place.

Entering into an Agreement to Mediate is not a simple matter as disputes are likely to ensue in regard to who a suitably qualified mediator is. It is recommended that attorneys attend free no strings attached online pre-mediation meetings generally offered by experienced mediators, where they are able to conclude an Agreement to Mediate and decide who to appoint as their mediator.

The third step is when the mediation takes place as per the Agreement to Mediate. All communication and disclosures, whether oral or in writing made at mediation proceedings is confidential and inadmissible as evidence in terms of sub rule (6), except as provided by law or discoverable under the rules.

It is foreseen that Rule 41A mediation will in practice not be purely facilitative. Attorneys who are not familiar with the different styles of mediation need to become familiar as soon as possible. They need to know what to expect from the mediator and what their clients are expecting to pay them. It is why attending a free pre-mediation (information) meeting is so important.

Upon conclusion of the mediation the following steps need to be taken:

1. In terms of sub rule (7)(a) the parties and the mediator have to inform the Registrar and other parties by Notice that the mediation has been completed.

   If they fail to do so, (7)(b) provides that the suspension of the time limits under this rule nevertheless lapses, unless a court decides otherwise.

2. In terms of sub rule (8)(b) the parties and the mediator have to file a Joint Minute within 5 day after the conclusion of the mediation, indicating:
3. Whether a full or partial settlement was reached or whether mediation was unsuccessful, and
4. The issues on which agreement had been reached and do not require a hearing by the court.

It is the joint responsibility of the parties in terms of sub rule (8)(c) to file the (8)(b) Joint Minute with the Registrar.

Sub rule (8 (a) provides^[3] that the mediation shall be deemed to have been completed 30 days after the date of the signing of the Joint Minute referred to in sub rule (4)(a) and that the suspension of time limits shall also then lapse.

If the mediation concludes before the 30 days, the parties may file the Notice contemplated in sub rule (7)(a) that the mediation has been completed. This is to ensure that the 30-day suspension of time limits for court processes can be uplifted earlier.

Sub rule (8)(d) provides that no offer or tender made without prejudice in terms of this sub rule shall be disclosed to the court at any time before judgment has been given.

Sub rule (8)(e) provides that Rule 41 applies mutatis mutandis if the parties reached a settlement during mediation. Rule 43(3) provides that if a settlement has been reached the attorney for the plaintiff has to inform the Registrar and Rule 41(4) provides that any party to a written settlement signed by all the parties, may apply for judgement in terms of the settlement with five days’ notice.

Sub rule (9)(a) provides that unless the parties agree otherwise that the parties shall pay the liability of the fees of the mediation equally.

Sub rule (9)(b) provides that when an order for costs of the action or application is considered, the court may have regard to the sub rule (2) Notices or any offer or tender referred to in sub rule (8)(d).

Any party may bring the above notices or offers to the attention of the court.

Sub rules (8)(d) and (9)(b) are controversial and unclear. It is controversial because mediation is a confidential process and for one party to refer to offers made during mediation is a breach of confidentiality.

It is unclear if the without prejudice offer has to be in writing.

Is it an offer made during mediation or one made after completion of the mediation, without any reference to the mediation?

These are questions the courts, attorneys and mediators are going to have to grapple with if the Rules Board does not clarify sub rules (8)(d) and (9)(b).

Rule 41A challenges the adversarial civil justice system that we inherited from England. It creates a problem-solving environment where a skilful and experienced mediator can help attorneys settle their clients’ cases or limit the issues in dispute.

It by no means undermines the important relationship of trust between attorney and client.

Jacques Joubert

[1] See discussion on sub rule 9(b) below.

[2] Sub rule (9)(a) provides that unless the parties agree otherwise that the liability of the fees of the mediation shall be born equally by the parties.

[3] It is a duplication of sub rule (4)(d)