Exiting the European Union (Mediation)

John Howell Excerpts

Monday 18th February 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Justice (Lucy Frazer)]

I beg to move,

That the draft Cross-Border Mediation (EU Directive) (EU Exit) Regulations 2019, which were laid before this House on 21 January 2019, be approved.

This draft instrument forms part of our ongoing work to ensure that if the UK leaves the EU without a deal our legal system will continue to work effectively for our citizens. It is solely related to our no deal preparations. If Parliament approves the withdrawal agreement, which includes an implementation period, and passes the necessary legislation to implement that agreement, the Government would defer the coming into force of this instrument until the end of that implementation period. Once a deal and our future relationship with the EU had been reached, we would review whether this instrument needed to be amended or revoked.

This statutory instrument relates to mediation. That is a process whereby parties to a dispute attempt voluntarily to reach an agreement to settle their dispute with the assistance of a mediator but without a court needing to rule on it. In the civil and commercial field such a dispute might for instance relate to a contract, a debt or contact with children.

[John Howell (Henley) (Con)]

As my hon. and learned Friend knows, I am hoping to become an associate of the Chartered Institute of Arbitration. I have spent much of my political life championing mediation as a means of settling disputes. To what extent are the Government committed to mediation for the future as a result of these measures?

[Lucy Frazer]

My hon. Friend is a member of the Justice Committee and has taken part in many debates on this subject. I know he has extensive experience of arbitration as well as mediation. I am very pleased that he is planning to go further on that. He must rest assured that the Government remain committed to mediation. It is a very important tool in the armoury to help people to resolve their disputes. Outwith this statutory instrument and the EU rules that we already have, as I will go on to explain, we have very strong domestic provision for mediation, and that will continue. The reason to bring forward this statutory instrument and the approach we have adopted is that the current arrangement with the EU is reciprocal and that following our leaving the EU we cannot rely on any reciprocity. This statutory instrument will therefore revoke the EU legislation.

In 2018, the European Council agreed a cross-border mediation directive which sought to harmonise certain aspects of mediation in relation to EU member state cross-border disputes. The aim of the mediation directive is to promote the use of mediation in such cross-border disputes. An EU cross-border dispute can be one between parties who are domiciled or habitually resident in two or more different member states, or it can be a dispute where judicial proceedings or arbitration are started in a member state other than the one where the parties are living. The UK, as a member state, enacted domestic legislation which gave effect to certain aspects of the mediation directive. I say certain aspects, because in many areas, such as ensuring the quality of mediation or information about mediation to the public, our existing arrangements already met the requirements or standards set out in the directive. However, to implement the directive the UK had to introduce some new rules for EU cross-border mediations involving UK parties.

The new rules first specify that if a time limit in a domestic law during which a claim could be brought in a court or tribunal expired during the mediation process, the parties could still seek a remedy through the courts or tribunals should the mediation not be successful. Secondly, the new rules define the rights of a mediator or someone involved in the administration of mediation to resist giving evidence in civil or judicial proceedings arising from information disclosed during a mediation. Various changes were also made to court rules to supplement the changes and to implement the requirements of the mediation directive relating to enforceability of agreements resulting from mediation.

Under the European Union (Withdrawal) Act 2018, the legislation implementing the mediation directive is retained EU law upon the UK’s exit from the EU. However, should the UK leave the EU without an agreement on civil judicial co-operation, the reciprocity on which the directive relies will be lost. Even if we were to continue to apply the enhanced EU rules to EU cross-border disputes, we would be unable to ensure that the remaining EU member states applied the rules of the directive to cross-border disputes involving parties based in the UK or judicial proceedings or arbitration taking place in the UK that were not otherwise in scope.

Accordingly, and in line with the Government’s general approach to civil judicial co-operation in the event of no deal, this instrument will repeal, subject to transitional provisions, the legislation that gives effect to the mediation directive’s rules on confidentiality and extension of limitation periods. It amends the relevant retained EU law in England, Wales and Northern Ireland, and in Scotland—in so far as it relates to reserved matters. Separate instruments will amend the related court rules in England, Wales and Northern Ireland. There is other legislation implementing the directive that is within the legislative competence of the Scottish Government, and I understand that they have decided to bring forward their own legislation in this area.

Turning to the impacts, this instrument is necessary to fix the statute book in the event of a no-deal exit. We have assessed its impact and have published an impact assessment. By repealing the domestic legislation that gave effect to the mediation directive, we will ensure clarity in the law applying to mediations between UK parties and parties domiciled or habitually resident in EU member states. We will also avoid a situation where mediations of an EU cross-border dispute conducted in the UK are subject to different rules on confidentiality or limitation from other UK mediations.

As I indicated, the instrument will change only the rules applying to what are currently EU cross-border mediations, and only in two respects: time limits and confidentiality. On time limits, claimants involved in such mediations who no longer have the benefit of an extended limitation period would, if they wanted more time to allow for mediation to take place, be able to make an application to the court and ask it to stay proceedings. Overall, this instrument will ensure that, post EU exit, UK-EU mediations are treated consistently under the law with mediations between UK-domiciled or habitually resident parties, or UK parties and parties domiciled or habitually resident in non-EU third countries.