Brexit: UK unwinds implementation of EU ADR laws

Jan O'Neill
Professional Support Lawyer, London

The UK Government has published legislation to effectively revoke the implementation of the EU Mediation Directive (2008/52/EC) after Brexit.

The Cross-Border Mediation (EU Directive) (EU Exit) Regulations 2019 (the Regulations) were made on 1 March 2019 and will come into effect on exit day, whenever that occurs.

Why?

The development is part of a wider policy decision by the Government to revoke/repeal UK domestic legislation that implemented EU law in instances where that law is based on reciprocity between EU Member States.

Also, in respect of the Mediation Directive specifically, the Government believes that the distinction and preferential treatment of parties involved in EU cross-border mediations (as distinct from domestic or other cross-border mediations) will no longer be justified once the UK leaves the EU.

What impact will it have?

In practical terms, the unwinding of the legislation is unlikely to have a major impact on the way cross-border mediations are conducted in the UK.  The Mediation Directive sought to harmonise mediation in relation to EU cross-border disputes by imposing minimum standards and rules across a range of matters.  However, as mediation law and culture was already well established in the UK, only a small number of modest changes to domestic legislation were required to bring the UK  into compliance with the Directive.

Broadly, the changes introduced to implement the Directive were:

1. statutory confirmation that a mediator cannot generally be compelled to provide evidence about the mediation in court proceedings or  arbitration;
2. extension of any applicable limitation periods during the course of a mediation; and
3. provisions allowing parties (by consent) to have cross-border mediated settlement agreements converted to a court order, to aid enforcement (reflected in Civil Procedure Rules Part 78).

The Regulations effectively revoke the legislation that implemented (i) and (ii), subject to transitional provisions.  Repeal of the Part 78 rules will be effected by a separate statutory instrument.

Notably, the government at the time of implementation did not consider it necessary to apply the above changes across the board to all mediations (ie. beyond EU cross-border mediations, as required under the Directive), and the removal of them from that category of mediations is unlikely to have substantive impact. In particular:

1. mediation confidentiality is deeply entrenched as a fundamental principle in the UK, in both common law and established practice, and this will continue to be the case;
2. any party facing time bar pressures can take steps to ensure it is not prejudiced by mediating, including by agreeing a standstill agreement or commencing protective court or arbitration proceedings and seeking a stay to allow time to mediate;
3. it is not common for parties to backtrack on mediated agreements and anecdotal evidence suggests that the Part 78 procedure is not commonly used in practice.  In this regard, it is notable that the new Singapore Convention will seek to establish a global regime for the enforcement of mediated settlement agreements, akin to the New York Convention regime for arbitral awards.

What other laws are being unwound?

Separately, it has also recently been confirmed that the following will also be revoked:

• the EU Online Dispute Resolution Regulation (which would otherwise be retained as direct EU legislation.  UK consumers will no longer have access to the Online Dispute Resolution (ODR) Platform - ie. the free, interactive, multi-language website operated by the European Commission, through which consumers and traders throughout the EU can initiate ADR in relation to online consumer transactions; and

• the domestic legislation that implemented the EU ADR Directive (2013/11/EU), which seeks to ensure the availability of appropriate ADR institutions in each Member State to deal with EU cross-border consumer disputes.  This means the requirement for ADR entities in the UK to offer cross border dispute resolution is removed, as is the requirement for UK traders to include in their contractual terms and websites signposts to ADR institutions and a link to the ODR Platform).