Multi-Tiered dispute settlement

10 Jun 2020 5:00 pm by Michelle Posemann

Multi-tiered dispute settlement and the introduction of Rule 41A is a significant evolution of South Africa’s legal system

The amendment of Rule 41 of the Uniform Rules of the High Court with the introduction of Rule 41A sees our legal system moving from the ‘one size fits all’ litigation space to a multi-tiered paradigm in the sense that parties are now required to consider mediation for every new matter instituted in a High Court of South Africa.

In other words – each mechanism is able to fit together with the others in a complementary ‘multi-tiered’ way – in any sequence that appears optimal. This may be arbitration that shifts to mediation or vice-versa. It may be conciliation that shifts to arbitration that then shifts to mediation. In the High Court at the moment, the dispute system being encouraged is mediation and, failing resolution, litigation.

Written by Michelle Posemann, Advocate of the High Court of the Republic of South Africa, for LexisNexis South Africa.

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[Durban, 02 June 2020]

There are many ways to tackle a dispute and to engage in and with conflict. Litigation is not always the best way to resolve issues and, in many cases, detracts from the need to focus either on resolution or on an efficient and effective process. Multi-tiered dispute settlement is an integrated system of mechanisms used in an adaptive and appropriate way – using the best means to achieve the best outcome.

These mechanisms are:

  • Conciliation
  • Mediation
  • Arbitration
  • Litigation

The use of the channels of appropriate dispute resolution enables parties to:

  • remain empowered;
  • retain ownership of their disputes;
  • determine the most suitable mechanism for their needs;
  • resolve disputes by agreement or third party determination in an expeditious and cost effective way; and to
  • engage constructively in conflict and in so doing to preserve ongoing relationships.

The amendment of Rule 41 of the Uniform Rules of the High Court with the introduction of Rule 41A has been a long time coming and signals a significant evolution of our legal system from a ‘one size fits all’ litigation space to a multi-tiered paradigm in which disputants and their representatives may utilize a dispute mechanism most suited to their specific needs.

It is therefore important to understand each mechanism and their respective outcomes or focus.

  • Conciliation - settlement focused
  • Mediation – resolution focused
  • Arbitration – outcome imposed by private adjudicator of choice
  • Litigation – outcome imposed by judge

Traditionally South African litigation referred to other mechanisms as being alternative. My view is that it is time to shift from litigation being the main stream idea to a flexible approach that makes use of one or more mechanisms in an integrated way that is appropriate to a particular dispute.

In other words – each mechanism is able to fit together with the others in a complementary ‘multi-tiered’ way – in any sequence that appears optimal. This may be arbitration that shifts to mediation or vice-versa. It may be conciliation that shifts to arbitration that then shifts to mediation. In the High Court at the moment, the dispute system being encouraged is mediation and, failing resolution, litigation.

The amendment of Rule 41 of the Uniform Rules of the High Court with the introduction of Rule 41A in March 2020 signals a significant evolution of our legal system from the ‘one size fits all’ litigation space to a multi-tiered paradigm in the sense that parties are now required to consider mediation for every new matter instituted in a High Court of South Africa.

… and for legal practitioners to become dynamic, multi-faceted dispute managers?

This evolution presents practitioners with an opportunity to engage with clients in a different way and to shift from an approach based on legal solutions to an approach that can address a wider range of clients’ needs. This is particularly important in this era of a disrupted normal. Now, more than ever, is the time to explore the use of mediation as an efficient and effective mechanism to manage volatile business relationships and disputes arising from unforeseen circumstances.

This pandemic is presenting us with an imperative to manage commercial disputes effectively and legal practitioners need to get on board with a new approach.

Litigation is a process which provides for the assertion of one parties’ rights over the other and, like arbitration, calls upon an adjudicator to determine in favour of one party by applying the law to the facts.

Mediation on the other hand, offers parties the opportunity to transform their dispute from one based on positional bargaining to collaborative negotiation allowing for the strategic creation of a mutually acceptable outcome.

Practitioners therefore need to become dynamic, flexible dispute handlers, as opposed to simply being litigators in adapting to the new multi-tiered paradigm.

A bit about the mediation process

A mediator is merely the facilitator of this collaboration and not a decision maker whose aim is for the parties to find a mutually acceptable outcome. This allows for flexibility and creativity in finding solutions based on a future scenario rather than being limited to a prescribed remedy based on past conduct as is the case with litigation or arbitration.

It is:

Confidential - Witten or oral communications and disclosures between the parties or their representatives, in the mediation process are confidential and inadmissible as evidence so they may not be used or referred to should the matter not resolve.

Voluntary - Parties are also free to abandon the process at any stage and resume the litigation.

Flexible – If they are unable to resolve the issues in dispute, the mediation process affords parties the opportunity to agree on certain issues and to narrow the issue in dispute, allowing for a more focused litigation process to follow.

What mediation offers practitioners

It expands the role of representatives into a new space which is sophisticated and in which the skill of mediation advocacy - the technique of presenting and arguing a client’s position, needs and interests in a non-adversarial and strategic way - becomes imperative.

It becomes strategic – not only within mediation but when and how to most effectively engage in mediation in the context of the other mechanisms, including litigation, in a multi-tiered approach.

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