Limiting High Court Litigation Costs

Mediation of Disputes in the High Courts

It is now recommended, from March 2020, that parties to a dispute in the High Court resolve the dispute by way of mediation and not litigation. This is in terms of the new 2020 Rule 41A of the Uniform Rules of Court governing the High Courts in South Africa.

Introduction

Mediation is defined as a voluntary process by agreement between the parties, in which process the mediator (who is an impartial and independent person) assists the parties to resolve the dispute or in identifying issues which could be settled or to explore areas on which compromise can be achieved or to generate options to resolve the dispute or clarify priorities of the dispute. The mediator does so by facilitating discussions between the parties and assisting the parties in their negotiations to resolve the dispute.

Legal Procedure

A plaintiff/applicant is now required to serve on the defendant/respondent a mediation notice together with the summons or notice of motion.

If the defendant defends the action (by way of a summons) or the respondent oppose the application (by way of a notice of motion), then, together with the defendant’s notice of intention to defend or the respondent’s notice of intention to oppose or at any time thereafter (but not later than the time of the delivery of the defendant’s plea or the respondent’s answering affidavit), the defendant/respondent is required to serve on the plaintiff/applicant or the attorneys of the plaintiff/applicant a mediation notice.

The mediation notice must substantially accord with Form 27 of the First Schedule of the Uniform Rules of Court. The mediation notice must state whether the plaintiff/applicant/defendant/respondent agrees to or opposes the mediation of the dispute, together with clear and concise reasons why the dispute is or is not capable of being resolved by mediation. The mediation notice is without prejudice to the rights of the parties and does not need to be filed with the Registrar of the High Court.

The parties may at any time before the judgement is given in the matter refer the dispute for mediation. If the hearing of the action (the trial) or of the application has commenced, the referral to mediation must only be by the leave of the court.

Before the hearing of the matter, a judge, through the case management procedure in terms of Rule 37A of the Uniform Rules of Court, may direct the parties to refer the dispute to mediation. In such circumstances, if any party refuses mediation of the dispute, then the other party may, in terms of Rule 30A of the Uniform Rules of Court, apply to the court for order that:

  1. such direction be complied with by the refusing parry; or
  2. the claim of the plaintiff/applicant or the defence of the defendant/respondent be struck out.

The parties may agree as to which of them will pay the fees of the mediator or, alternatively, the fees of the mediator shall be borne equally by the parties.

What happens if a party refuses mediation?

The provisions of Rule 41A do not provide any clear sanction against the party refusing mediation. However, Sub-rule 41A(9)(b) provides that, when considering which party is to pay the costs of the matter, the court may have regard to the mediation notices. This implies that the refusal by any party to mediate the dispute will be sanctioned by an award of costs against such refusing party. It is submitted that the South African courts may be guided by the courts of England in this regard (South African frequently seek and take guidance from the case law of England, especially on matters, like Rule 41A, which have not been judicially considered). There have been decisions in the English courts where the courts made a costs award against the party who had refused to mediate[1]. Accordingly, a court in South Africa may very likely make an award of costs against the party who refused mediation, even if such party is the successful party (where the successful party was the party who refused to mediate the dispute).

Mediation during COVID-19

Parties should consider mediation and the resolution of the dispute thereby without persisting with the litigation – which involves huge costs, with a very long period of time elapsing before a court date is given for the hearing of the matter, and it burdens the courts with extremely large volumes of cases to be heard. Mediation will avoid all of this, especially with the extremely increased strains on the courts due to the extremely large numbers of defended or opposed matters before the courts, specifically in these times of Covid-19 and its consequent lockdowns.

[1] Dunnett v Railtrack [2002] EWCA Civ 303; Bristow v The Princess Alexander Hospital NHS Trust [2015]     EWHC B22

Compiled by:
Irfaan Abdullah, a senior consultant at Pather and Pather, with an LLM degree in International Trade Law, specializing in Commercial and Corporate Law.