The Future of Mediation in Singapore Courts (3)

Starting from 1 April 2022, new procedures for conducting civil cases will take effect in Singaporean courts. Amongst a key feature of the Rules of Court 2021 (“ROC21”) is to further encourage – some might even say redirect – parties to settle their disputes through other means rather than in litigation. This is particularly apparent when one looks at Order 5, rule 3 which sets out the court powers in relation to amicable resolution of cases.

3.—(1) The Court may order the parties to attempt to resolve the dispute by amicable resolution.

(2) In deciding whether to exercise its power under paragraph (1), the Court must have regard to the Ideals and all other relevant circumstances, including whether any of the parties have refused to attempt to resolve the dispute by amicable resolution.

(3) Without affecting the Court’s power under paragraph (1), if a party informs the Court that the party does not wish to attempt to resolve the dispute by amicable resolution, the Court may order the party to submit a sealed document setting out the party’s reasons for such refusal.

(4) The sealed document will only be opened by the Court after the determination of the merits of the action or appeal and its contents may be referred to on any issue of costs.

(5) The Court may suggest solutions for the amicable resolution of the dispute to the parties at any time as the Court thinks fit.

Compelling parties to attempt amicable resolution

Rule 3(1) is a significant step forward even considering how pro-ADR the courts have been up to this point. Typically the court would adjourn hearings for parties to go to mediation if they can see that parties desire to mediate, but now that the court has the power to compel parties to go for mediation, how would it be exercised?

Unfortunately, rule 3(2) does not give very much guidance on how the court would exercise such a discretion. It would seem counter-intuitive to order an attempt at amicable resolution if both parties have aleady refused, but arguably economics would take priority over parties’ narrow interest. The Ideals referred to, which can be found in Order 3, rule 1, includes factors such as “cost-effective work“, “efficient use of court resources” and “fair and practical results suited to the needs of the parties“. so presumably if the court sees the possibility of an earlier amicable resolution to the dispute, it may redirect parties away from litigation.

Judge-led settlements?

Generally there are two schools of thought regarding the mediator’s role – either to assist parties in pinpointing interests and finding feasible solutions (facilitative) or to collect the facts and recommend a solution to the parties (evaluative). Most lawyers in Singapore would be trained in, and usually expect to encounter mediators who are facilitative, even in court-based mediation.

Rule 3(5) seems to be a fairly interesting provision as it gives the court the discretion to suggest solution. However, since the information available to the court is usually limited due to the nature of pleadings, which may not always reveal the parties’ interests or motivation, one wonders how effective or well-received such suggestions would be. Although it may hasten the process by getting parties to realise that there are other alternatives to going to trial, it would be incumbent on lawyers to help clients assess such suggestions rather than adopt them simply because they came from a person of authority.

Would such a mechanism lead to greater acceptance of directive mediation? That depends on how much time a registrar or judge (not being the arbiter on a particular issue or the entire dispute) could allocate to unearth the parties’ interests and obtain enough information to propose a solution. However having the court dig deeper into amicable resolution solutions would appear to contradict the overall intention of having expeditious proceedings, since mediation sessions would require at least a few hours, if not an entire working day, to conclude. It would also might not be an “efficient use of court resources” given that there are several established mediation institutions with well-staffed panels in Singapore.

Disincentivising refusal

Rules 3(3) and (4) present another novel mechanism to disincentivise parties from unreasonably refusing to attempt amicable resolution of disputes. If a party refuses to proceed with amicable resolution, his reasons can be captured contemporaneously and then referred to after trial, which could lead to costs penalties, even for a successful party (as discussed in the previous article). Even though we have yet to see these rules in action, the possibility of being penalised may be sufficient as a deterrent against an outright or unreasoned refusal.

It remains to be seen what would constitute an “unreasonable” refusal. Would legal advice on the merits and strength of the case be accepted as reasonable, even though it would be susceptible to hindsight depending on when such advice was given? Would parties waive their legal advice privilege (which would normally make any communications made to obtain legal advice confidential) in order to avoid cost penalties? Would a court’s decision to not condone legal advice to refuse amicable settlement have ethical and disciplinary implications for lawyers? These would be interesting developments to observe.

Conclusion

The new ROC 2021 pushes amicable dispute resolution to the forefront in Singapore as it introduces a whole slew of measures to incentivise early attempts and to prevent or discourage parties from insisting on a railroad to trial. Although other jurisdictions and cultures may be puzzled to see such a development, it appears fairly consistent with our national focus (some may even say obsession) with efficiency, at least in terms of managing the cost of legal disputes. Mediation and negotiation will become even more important soft skills for lawyers as amicable resolution becomes the first stop, especially for litigators since it may not be easy to justify refusing to attempt such amicable resolution. Perhaps market perception and demands of lawyers may even begin to shift. These may be exciting new times for pro-mediation advocates and practitioners.