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Enormous hike in court fees - will we see a rush to mediation?

Mediation (a negotiation managed by a neutral mediator) has been with us for many years but, perhaps surprisingly, many more disputes are resolved through the courts than through mediation not withstanding its clear benefits: speed and low cost. Earlier this month the Ministry of Justice implemented massive increases in the fees the courts charge to those parties who commence proceedings. Claims for more than £10,000 now attract an issue fee of 5% of the value of the claim up to a limit of £10,000, so, for example, a claim for £200,000 will now cost £10,000 to issue in addition to lawyers’ fees.

To put that in perspective, a claim of that order should not cost more than between 15% to 30% of that figure for the mediator’s fee. The recent hike in court fees ought to make more businesses pause before instructing their lawyers to issue proceedings. There will be cases where it is necessary to commence proceedings if a claim is close to being time-barred under the Limitation Act but in other cases there is much to be said for embarking on a mediation prior to the commencement of proceedings.

Yes, if unsuccessful, it will have added some additional cost as it will still be necessary to issue proceedings but when compared with the likely cost saving of an early resolution of the dispute it is, generally speaking, a risk and cost worth taking.

Even if there is no settlement parties will be far better informed than they were before the mediation as to the strengths and weaknesses of their position.

By Rick Munro, Pitmans LLP
March, 2015

TESTIMONIALS

Connie Theron, Practising Attorney - UCT Law Clinic
“While working at the University of Stellenbosch Legal Aid Clinic and later at the UCT Law Clinic, I found the pro bono mediation services of Gerrie van der Watt of the Mediation Centre to be highly professional and extremely effective in our divorce matters. It is fantastic that our clients, with little or no financial means, can benefit from such an excellent programme.

The mediators are able to provide a non-threatening environment in which the clients are able to talk openly about issues that matter most to them, but which the Court in a divorce matter may choose not to entertain. Through the mediation sessions, the clients are able to reach an agreement together which ultimately they are both happy with. In cases where mediation did not yield the result of a settlement, the process was still extremely valuable, giving the parties better perspective and highlighting the key issues in dispute.”