Ireland
In your jurisdiction, are there any formal ADR procedures available for resolving commercial disputes other than litigating (or arbitrating) to a final hearing?
There are several different types of ADR in the Republic of Ireland.
Mediation, which is a confidential process, is becoming increasingly popular as a means of resolving disputes. Mediation is a voluntary, non-binding process which involves the parties agreeing on the appointment of an independent mediator, who tries to help the parties find a negotiated settlement. It is regarded as inexpensive compared to litigation.
Adjudication is a process whereby a neutral third party is appointed to make a determination in a particular type of dispute. The determination is binding pending any court appeal. Adjudication is used for certain employment disputes, residential landlord and tenant disputes and payment disputes in the construction sector.
Conciliation is mainly used in the Construction industry. It is similar to mediation; however, the conciliator releases a recommendation at the conclusion of the process, which will be binding on the parties unless they reject the decision within a specified number of days.
Expert Determination is a process whereby an independent expert is appointed to investigate a dispute. The expert will make a decision and the parties will normally agree to be bound by that decision.
Does engaging in ADR have any effect on potential or existing litigation or arbitration?
ADR does not normally affect litigation or arbitration, as it is usually a confidential process. Parties can engage in mediation at any stage during a legal case, and if their dispute is resolved, the litigation or arbitration can be discontinued. Commercial Court cases can be paused pending the outcome of a mediation. Under section 169 of the Legal Services Regulation Act 2015, if the court invites the parties to engage in mediation (or other ADR) and the court considers that one or more of the parties were unreasonable in refusing to engage, this may be a factor taken into consideration when the court decides who pays the legal costs of the proceedings. Participating in ADR therefore can have a protective affect when it comes to orders for costs.
Is ADR compulsory and if so are there any consequences if a party fails to engage in ADR? If it is not compulsory are there any plans for this to change?
ADR is not compulsory unless there is a contractual obligation on a party to resolve a dispute a certain way, or unless parties are directed to participate by a court. Solicitors must advise their clients of the benefits and advantages of mediation prior to issuing proceedings. This is a statutory obligation under The Mediation Act 2017. If a party fails to accept an offer to mediate during a court dispute, this may have implications at the conclusion of the case, when the court decides who pays the legal costs. If the court determines that a party was unreasonable in refusing to engage in mediation, it may be a factor that the court considers when deciding who pays the legal costs of a dispute. The court may also reduce the fees awarded to a party as a percentage. There are currently no plans to make alternative dispute resolution compulsory, it is usually a voluntary process.
In June 2023, the Attorney General (who acts as legal advisor to the Government) approved non-binding State litigation Principles, to ensure that the State acts as a “model litigant”. The first principle is to avoid legal proceedings where possible. Although the State is more often than not the Defendant or Respondent to Proceedings, this principle provides that “the State will endeavor to avoid, prevent and limit the scope of legal proceedings wherever possible, including by giving consideration in all cases to alternative dispute resolution before initiating legal proceedings”, and in other cases, by “participating in alternative dispute resolution where appropriate.”
Can the parties agree, in advance of any potential dispute, to engage in ADR?
Yes. Some commercial contracts will contain a dispute resolution clause that may provide for one or more forms of ADR in the event of a dispute. Parties should carefully follow a dispute resolution clause if they intend on invoking it.
When does ADR generally take place?
Subject to what may be provided for in a contract between the parties, mediation can take place at any place stage of a dispute, and will often occur after one party decides to issue proceedings. It is also open to the parties to engage in without prejudice negotiations, which is popular in the Republic of Ireland.
Is ADR subject to without prejudice privilege and/or confidential? If not, is there any other means to protect confidential information?
Yes. One of the benefits associated with mediation and conciliation is that it is confidential and subject to the without prejudice rule. If liability is conceded at mediation, the other party cannot use this to their advantage if the matter subsequently proceeds to litigation. Mediation agreements are usually signed prior to mediation, which would typically contain a confidentiality clause.
Does the output from ADR create precedents?
No precedents are created at mediation or other without prejudice negotiations. Mediators try to get the parties to agree to a negotiated settlement, and they do not make a decision or determination. As mediation is confidential, the outcome does not become public knowledge.
Who bears the costs of ADR?
It is open to the parties to agree who pays for the ADR. In commercial litigation, the parties will normally share the cost of mediation evenly.
Is your jurisdiction subject to any specific rules for cross border ADR?
Yes, S.I. No. 209/2011 – The European Communities (mediation) Regulations 2011 transposed Directive 2008/52/EC in 2011 facilitates cross border mediation. It allows for the enforcement of mediation settlements by making agreements a rule of court, (a term used in Ireland to make a settlement agreement an order of the Court). Another interesting feature of this Statutory Instrument is that it allows a Judge, on application of one of the parties, to adjourn the proceedings and invite the parties to participate in mediation. The United Nations Convention on the International Settlement Agreements Resulting from Mediation (Singapore Convention) is not in force in the Republic of Ireland.
Are there any particularly unusual features of ADR in your jurisdiction that you are aware are different to other jurisdictions?
In relation to mediation, most mediators will have a legal background and might have prior experience in the area which is the subject of the dispute. They may also have undergone particular training or they may have received a qualification that relates to mediation. In the construction industry where ADR is popular, many conciliators and adjudicators will have a background in quantity surveying, while others have a purely legal background.
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