In June 2019 the Construction Industry Council (“CIC”) published the CIC Model Mediation Agreement and Procedure (“the CIC MMAP”) First Edition. The CIC MMAP was published in order to assist parties to seek to resolve construction and engineering disputes using mediation and offers “an innovative approach to the low cost resolution of disputes”.
Mediation has long been a method of dispute resolution conducted between parties and often with legal support in an attempt to settle claims which otherwise might proceed by way of formal proceedings (such as through the Courts or via Arbitration).
The aims behind the CIC MMAP are in keeping with the benefits of mediation generally, which many will be familiar with, in that it is a private, confidential, non-adversarial, co-operative process which is held on a ‘without prejudice basis’ in an attempt to promote and achieve a settlement. So, what is different about the CIC model mediation procedure?
Commencement of Mediation under the CIC MMAP
Mediation commences when the CIC acknowledges and validates the Mediation Request following payment of the CIC Mediation Fee (£300.00 plus VAT). Once the Mediator is nominated/ selected from an accredited panel (all of whom have a minimum of 10 years post-qualification experience within their primary profession), the Mediator will discuss the matter with the relevant parties. Following those discussions, the Mediator will prepare a Mediation Procedural Agreement setting out the key details of the dispute and the mediation timetable. The Agreement will also confirm the fixed fee for the mediator at £6,000 (excluding expenses) plus VAT if the value of the claim does not exceed £100,000.
Preparation for Mediation and the Meditation
In accordance with the terms of the Agreement parties are required to prepare a case summary (akin to a mediation position statement) no less than 7 days before the mediation. The parties are also required to establish their Best Alternative to a Negotiated Agreement (i.e. the most advantageous alternative course of action a party can take if the mediation fails) at the outset of the mediation. This helps to establish the starting positions of each party. The mediation itself then progresses as any mediation does but there is a requirement that those attending have full authority to settle the dispute and sign any settlement agreement. The CIC MMAP places significant importance on the “Lead Negotiator” for each party (being the individual with full authority) and requires the Mediator to have direct contact with the Lead Negotiator in the run up and during the mediation.
If settlement is not reached, the parties may agree in advance for the Mediator to offer a non-binding conclusion within 7 days.
What does the model procedure offer?
In a nutshell, the model procedure is no different in practice to an ordinary mediation organised on an ad hoc basis by the parties to the dispute, save for one key provision – an automatic standstill on limitation periods for 6 months. The Model Mediation procedure provides that “the running of any contractual or statutory limitation period is suspended from the date of signature of the Mediation Request by the last person to sign the same until the termination of the Mediation … , or at the latest six months after the date of the last person signing the Mediation Request, unless otherwise agreed by the parties in writing". A defendant will therefore need to bear this in mind when agreeing to adopt the procedure without amendment.
Whilst the standstill is only a benefit for the claimant, the benefit of the procedure for both parties however is that there is a clear understanding from the outset as to what the parties can expect and what the steps of the process are and whilst in practice any mediation should have an individual with full authority to settle, the mandatory requirement for this is very helpful.
It remains to be seen the extent to which this procedure will be adopted and it will be particularly interesting to see whether the CIC MMAP provides for a more effective procedure than the mediation procedures that are already available to all parties. That said, with a large number of supporting industry bodies, there is a strong likelihood that contracts may start to regularly refer to CIC MMAP as the contractual mediation procedure.