Cross-Border Mediation (EU Directive) (EU Exit) Regulations 2019

Lord Beith Excerpts

Wednesday 20th February 2019 Lords Chamber

[Lord Beith (LD)]

Is it the Government’s policy, if they are negotiating in a transition period because they have got an agreement, to seek to continue the kind of provisions that are in these regulations when we come to the end of the transition period?

[Lord Keen of Elie]

The Government—in the event that we have a withdrawal agreement—will enter into negotiations on our future relationship with the EU, and that will include a desire to ensure that we have addressed the full panoply of judicial co-operation issues that exist at the present time. We cannot say unilaterally that we will secure all of those, but clearly we have an interest in carrying on that negotiation. That is why, at the end of any implementation period, it may be that we can simply revoke these instruments without them ever having to be applied.

The instrument relates to mediation, which is, as noble Lords will be aware, a structured process whereby the parties to a dispute attempt on a voluntary basis to reach an agreement to settle their dispute with the assistance of a mediator, but without a court needing to rule on the dispute. In the civil and commercial fields, such a dispute covers a wide range of contractual and other issues, but also touches on family issues such as access to children.

In 2008, the European Council agreed what it termed a “cross-border mediation directive” which sought to harmonise certain aspects of mediation in relation to EU member states’ cross-border disputes. I should note that the directive does not apply to Denmark, so when I refer to “member states” in this context, I am not including Denmark, which has an opt-out under Protocol 22 of the Lisbon treaty. 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 or arbitration proceedings are started in a member state other than the one where the parties are living or domiciled.

The United Kingdom then 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, and information about mediation for the public—our existing arrangements already met the requirements or standards set out in the 2008 directive. However, in order to implement the directive, the UK had to introduce some new rules for EU cross-border mediations involving UK parties. These new rules first specified that if a time limit, or limitation period, in domestic law during which a claim could be brought in a court or tribunal expires during the mediation process, the parties can still seek a remedy through the courts or tribunals should the mediation not be successful. Secondly, the new rules defined 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 mediation. Various changes were also made to court rules to supplement these changes and to implement the requirements of the mediation directive relating to the 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 United Kingdom’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 would be lost. So, 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 United Kingdom, or to judicial proceedings or arbitration taking place in the United Kingdom.

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 and 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 and Wales and Northern Ireland. Other legislation implementing the directive 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.

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 which 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—and arguably more favourable—rules on confidentiality or limitation than other UK mediations.

As I indicated earlier, the instrument will change the rules applying only to what are currently EU cross-border mediations, and then 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, have to make an application to the court to stay proceedings and would have to pay a fee. We are unable to assess how many cases this would affect. Limitation periods can extend from three years, to six years, to 10 years in some instances, and can either bar a case from being brought or extinguish the claim in its entirety. They are extensive periods in any event, but they may be impacted by these changes

Overall, the instrument will ensure that, post 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.

I have set out to deal with the issue of EU cross-border mediations because, without a deal in place on 29 March 2019, such mediations involving UK-domiciled parties would no longer be subject to the mediation directive rules in EU member states. The regulations now moved will fix deficiencies and ensure that both the courts and UK citizens have clear and effective rules to follow in such circumstances.

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[Lord Beith]

My Lords, this is another example of something we are losing, although in this instance the amount is relatively small. As the Minister has explained, this concerns mainly time and the confidentiality element as it is currently provided, and there are some alternatives to that.

It is extraordinary in that it repeals provisions that would be continued under the withdrawal Act—which we have already passed—in numerous other statutes, including the Equalities Act 2010, so we are bound to look at it suspiciously for that reason. The Government’s argument against continuing these provisions without guaranteed reciprocity—I accept that the Government cannot guarantee reciprocity—is that applying them unilaterally would result in preferential treatment for parties involved in EU cross-border mediations that they believe would no longer be justified when the UK ceases to be an EU member state.

If, however, the provisions can be used to assist in a mediation and the other EU state involved is willing to observe a reciprocal arrangement, why should we deny that benefit? What is the unfairness of that? There are many instances in which we have better arrangements with some states than with others in judicial matters, and in the case of our European neighbours it would be surprising if we could not have more arrangements facilitated than apply in other cases. We do not say that person X is being treated unfairly because their attempt to resolve a matter by mediation relates to a state that is not helpful, whereas person B is in a mediation involving a state with which we are able to make some reciprocal arrangement.

The Government have taken the view with most—although not all—of these statutory instruments that where we cannot have reciprocity we cannot have anything. That is not necessarily the case. The Minister kindly answered the question I asked him earlier in a way that seemed to imply that the Government, if there is an agreement during the transition period, would seek to negotiate back into existence something along these lines. Of course, during the transition period the provisions would continue to operate.

What if there is a no-deal Brexit, which looks increasingly likely? There is no reason why the Government should not seek to facilitate mediation with our former fellow EU states as a matter of policy. Clearly I am arguing that they should have a policy of negotiating during the transition for such arrangements—or even if there is no deal. The atmosphere might be less conducive but at some stage why should we not try to resurrect provisions of this kind?

Although, as I have said, the impact of removing these provisions is relatively small, it is another example of an area in which we ought to try to continue arrangements that are beneficial to people who have real problems to solve. Where possible, we should do so by direct agreement with the EU and, if not, by agreement with individual states.

[Baroness Chakrabarti (Lab)]

My Lords, as we have heard, this instrument sits against a backdrop of completely inadequate planning for justice co-operation after Brexit. The danger is that that inadequate planning could put vulnerable people in our society at risk. Across Parliament, including from the Justice Select Committee, there has been concern that the Ministry of Justice has failed to provide sufficient detail or certainty about how co-operation on justice will be managed after we exit the European Union.

As we all know, we currently benefit from well-established, frequently updated and comprehensive reciprocal justice arrangements within the EU. Without an agreement with our European partners on what the future of those reciprocal arrangements looks like, people forced to go to court or mediation to protect their rights can face extremely damaging consequences.

We on this side of the House have consistently said that Brexit must not be used to lower standards or reduce rights. There is a fear of that. I know that the noble Lord, Lord Beith, is a little sanguine about how significant that is in this instrument, but I am a bit less so. It nevertheless breaches that principle about a reduction in standards and rights.

Noble Lords will recall that the instrument was laid for sifting by the Secondary Legislation Scrutiny Committee on 16 November last year. The European Statutory Instruments Committee recommended that it be upgraded to the affirmative procedure because of its large volume of amendments to primary and secondary legislation, but also because it could diminish rights by disengaging from European Union obligations.

I may have misheard the Minister. He referred to an impact assessment. I do not know whether that included a consultation or whether he is instead relying on the Government’s general civil judicial co-operation framework. If it is the latter, the European Union Sub-Committee on Justice found that the framework contained little detail on how the Government’s aims for co-operation would be achieved.

This statutory instrument will repeal legislation enshrining the mediation directive. The directive extends time limits for bringing some civil claims—including child maintenance claims and employment tribunals—to enable mediation. I am sure we all agree that this is a very good thing. The directive is one of many examples whereby we have raised legal standards and protections across Europe through co-operation with our European partners.

The European Statutory Instruments Committee considered whether this instrument could diminish rights and found that it repeals legislation that extends the time limit for bringing certain claims in civil courts and employment tribunals to enable mediation. Shortening time limits in that regard can have significant consequences, prohibiting parties from reaching mediated solutions in child contact cases, for example. This statutory instrument clearly breaches the principle that standards should not be lowered; it lowers the standards for enabling cross-border mediation from the higher EU standard to a lower international one.

The Government accept that the UK could unilaterally continue to apply the mediation directive post exit but have decided not to do so. The noble and learned Lord will correct me, but my understanding of the Government’s position is that, if someone wants to stop a time limit running in mediation, they should issue proceedings before a court and apply to stay or stop those proceedings. That is unfair and unrealistic for so many people in their current financial circumstances, let alone in the context of the obliteration of civil legal aid, which we have discussed in your Lordships’ House so many times.

Put simply, this statutory instrument does what Ministers promised—in this House and elsewhere—would not happen: it breaches the principle of not reducing standards in people’s access to justice. That is very disappointing.