Mediation: Its
Practice & Procedure
By
LEE SWEE SENG
LLB, LLM, MBA
Advocate & Solicitor
Notary Public, Trademark, Patent Agent
Certified Mediator
[email protected]www.leesweeseng.com
What is Mediation
A wise teacher once said: Blessed are
the Peacemakers Matthews Gospel
In a battle, be it legal or otherwise,
there will be casualties and everyone
is a loser.
In a mediation, one seeks a win-win
situation
where
a
business
relationship is still maintained.
The Definition
Mediation: a structured negotiation
process in which a neutral impartial third
party, the mediator, independent of and
acceptable to the parties, facilitates
their agreement on a resolution of their
dispute by assisting them systematically
to isolate the issues in dispute, to
develop options, and to reach a mutually
acceptable
resolution
which
accommodates the interests of all
disputants as much as possible.
The Definition (cont)
If requested, the mediator may suggest
options for settlement but does not have
authority to impose a settlement or its
terms on the parties.
Jay Folberg and Alison Taylor Mediation: A Comprehensive Guide
to resolving Conflict without Litigation (Jossey-Bass, San
Francisco, 1984); Christopher W Moore 77 The Mediation
Process: Practical Strategies for Resolving Conflict (Jossey-Bass,
San Francisco, 1986); New South Wales Law Societys
Guidelines for Solicitors who Act as Mediators (1 988) 26 Law
Society Journal (6) 29.
Various Mediation Bodies
Banking Mediation Bureau
Insurance Mediation Bureau
Malaysian Mediation Centre
Marriage Tribunal / Conciliatory
body (Law Reform (Marriage &
Divorce) Act 1976
ITS PROCEDURE / PROCESS
Banking Mediation Bureau
Banking Mediation Bureau (392222-H) (BMB)
was incorporated under the Companies Act 1965
on 28.6.1996 to provide dispute resolution
services between a consumer and commercial
banks, finance companies or merchant banks.
The BMB is funded by the above institutions and
its services are provided free of charge to
customers of these institutions.
from http://www.bankinginfo.com.my
Banking Mediation Bureau
(cont)
Currently, BMB handles disputes
involving monetary losses of up to
RM25,000 in relation to the
following areas:
The charging of excessive fees,
interest and penalty
Misleading advertisements
Banking Mediation Bureau
(cont)
Unauthorised Automatic Teller
Machine withdrawals
Unauthorised use of credit cards
Unfair practice of pursuing actions
against a person who is a guarantor
Banking Mediation Bureau
How to refer a case
First try to resolve the complaint
with the banking institution by
contacting the banking institution's
customer
complaints
representative either through a
phone call or a letter.
Banking Mediation Bureau
How to refer a case
(cont)
Send
all the complaints to the Complaints
Unit of these institutions, which have
been specially set up to deal with
customers' complaints. The customer can
get the information on the Complaints
Unit directly from your banking institution
or
from the Bank Negara Malaysia
website.
Banking Mediation Bureau
How to refer a case
Banking institution should respond to the
complaint
within two weeks of receiving it.
(cont)
More time may be needed for complex cases.
After reviewing the complaint, the banking
institution will give the customer a letter stating
its decision with regard to the complaint. If the
complaint cannot be resolved, a "deadlock
letter" will be issued. This is a simple letter
explaining the decision of the banking
institution and the reason for its decision.
Banking Mediation Bureau
How to refer a case
(cont)
Write
a simple letter to the BMB stating
briefly the nature of
the dispute
together with a copy of the "deadlock
letter" from the banking institution.
Fill in a standard form prepared by the
BMB to give the customers permission
to his/her banking institution, to disclose
to the BMB, any information on his/her
account as required by section 99 of the
Banking and Financial Institutions Act
1989.
Banking Mediation Bureau
How to refer a case
BMB,
with customers permission may
(cont)
obtain further information from their
banking institution regarding their
complaint and study the case, to see
how best it can be resolved.
BMB will investigate their case based on
the facts presented objectively.
BMB may conduct an interview with the
customer or together with the banking
institution, through a mediation process
to resolve the dispute.
Banking Mediation Bureau
How to refer a case
BMB
will then make a decision based on its
(cont)
own assessment, taking into account the
law and banking practices. The decision of
the BMB is binding on the banking
institution but not on the customer.
Customer can choose either to accept or
reject the decision of BMB. If they do not
accept, the decision is deemed cancelled
and they are free to take any other steps
with respect to the dispute, including legal
proceedings.
In a Nutshell
(from http://www.bankinginfo.com.my)
ROLE OF BANK NEGARA
MALAYSIA (BNM)
As a regulator of the Malaysian banking industry,
BNM's role is to ensure that banking institutions
conduct their businesses in an appropriate
manner and within standard banking practices. If
a complaint does not fall under the scope of the
BMB, and the customer are not happy with the
decision and explanations given by their banking
institution with regard to their complaint, they
may wish to seek the assistance of BNM. They
can use BNM's standard complaint form which is
available at all banking institutions and submit it
together with their "deadlock letter" from their
banking institution.
Insurance
Mediation
Bureau
The Insurance Mediation Bureau (223555-A) was
incorporated under the Companies Act 1967 by members
of Persatuan Insuran Am Malaysia on 23.8.1991 to provide
an independent and impartial method in resolving
disputes between insurers and policyholders.
The independence of the Mediator is guaranteed by the
council of the Bureau whose membership consists of
people representing public and consumer interests and
representatives of the members of the Bureau.
The Mediator can investigate and decide on a complaint,
dispute or claim between the Insured and the Insurer.
http://www.piam.org.my
Insurance Mediation
Bureau
How to make a complaint?
If the insured feel that their insurers
have turned down their claim
unreasonably, they can approach
the Bureau for assistance. However,
before they do that, their complaint
must :
Be
referred
to
the
senior
management of the insurance
company
to
give
them
the
opportunity to resolve it,
Insurance Mediation
Bureau
Be referred to the Mediator within
six months upon them receiving
the final decision of the insurer
Concern the insured personally
and,
Relate to a policy issued in
Malaysia
Malaysian Mediation
Centre (MMC)
The MMC is a body established under the
auspices of the Bar Council with the objective
of :promoting mediation as a means of alternative
dispute resolution and
provide a proper avenue for successful dispute
resolutions.
Source: MMC
Malaysian Mediation
Centre The Process
i.
ii.
iii.
iv.
Pre-Mediation Process where parties sign a
mediation
agreement
indicating
their
submission to mediation;
Preliminaries an introduction to mediation
Mediators Opening ground rules are laid down
by the mediator for the session; Mediators are
provided with a brief statement of facts. No
prior in-depth knowledge of the issues at
dispute are required;
Joint session parties are invited to state their
respective cases in each others presence;
Malaysian Mediation
Centre The Statistics
Cases referred for mediation
2000
2001 2002 2003 2004 as at
1 .11.04
2
26
7
8
7
Source : MMC
Malaysian Mediation
Centre
No
of
Mediators
No. of Mediators (as at 1.11.2004)
Total : 101
KL
Selangor
Negeri Sembilan
Johor
Penang
Perak
5
Kelantan
Melaka
Kedah
14
17
44
14
3
1
1
2
Source : MMC
Malaysian Mediation
Centre The Process
v.
vi.
Caucuses optional and usually exercised to
enable the parties to vent emotions and to
speak freely. Allows mediator to pick out
common issues and hidden messages;
Settlement Agreement parties sign a
settlement agreement witnessed by the
mediator. Parties are at liberty to pursue
court
action
should
outcome
be
unsatisfactory. Either parties solicitors may
draw up agreement or mediator may do so if
assistance is required.
Marriage Tribunal /
Conciliatory Body (Law
Section
106 (Marriage
make it a requirement
of
Reform
and
reference to conciliatory body before petition
Divorce)
Act
for
divorce. A conciliatory
body means :
a council set up for the purposes of
reconciliation by the appropriate authority of
any religion, community, clan or association;
a marriage tribunal; or
Any other body approved as such by the
Minister by notice in the Gazette
Marriage Tribunal /
Conciliatory Body (Law
A Reform
conciliatory
body
to and
which
a
(Marriage
matrimonial difficulty has been referred
Divorce)
Act
shall resolve it within six months; and
shall require the attendance of the parties
and shall give each of them an
opportunity of being heard and may hear
such other persons and make such
inquiries as it may think fit and may, if it
considers it necessary, adjourn its
proceedings from time to time.
Marriage Tribunal /
Conciliatory Body (Law
If aReform
conciliatory(Marriage
body is unableand
to resolve
the
matrimonial
difficulty
to
the
Divorce)
Act
satisfaction of the parties and to
persuade them to resume married life
together, it shall issue a certificate to that
effect and may append it its certificate
such recommendations as it thinks fit
regarding
maintenance,
division
of
matrimonial property and the custody of
minor children.
The Practice
Modeled after the mediation training
guide produced by LEADR
Model of Mediation in
Pre-mediation:
The
The Past-Understanding and
Preliminary Conference
Exploration
Opening
Parties Opening Statement
Exploration of Issues
Private Sessions
Model of Mediation in Premediation: The Preliminary
The Future-Problem Solving &
Conference
Resolution
Private Sessions
Joint Negotiations Session(s)
Private Sessions
Agreement/Closure
Preliminary conference
At preliminary conference
Introductions both of Mediator and
the parties
Roles:
Mediator
Parties
Advisers
Process of mediation
Discuss joint & Private sessions
No interruptions
Complainant speaks first, then
Respondent
Preliminary conference
At preliminary conference
Agreement to mediate :
Authority to settle
Confidentiality as far as the law allows
Privileged information
Enforceability of Settlement Agreement
Termination of Mediation Process
Preliminary conference
At preliminary conference
Outline of disputes
Time,date, venue for mediation
Parties Attending
Summary confirmed in writing
MEDIATION : The first joint
session the 5 essential
The mediators opening statement
steps
The parties statements
Summarising
Identification of issues (setting the
agenda)
Exploration of issues
Mediators Opening
Statement : OBJECTIVES
Engender confidence in the
process and in the Mediator
Explain role of Mediator
Ensure parties understand process
and know what is to be expected
Set guidelines for conduct of
mediation
Mediators opening
statement:
Brief and concise
Serves to put people at ease
Allow parties to ask questions
during and at the conclusion of
opening statement
Balanced approach to parties
Simple language
Mediators opening
statement : CONTENT
Welcome and introduction how are people to be
addressed?
Role of the mediator no advice on solutions
Agreement to mediate
Brief explanation of the process joint and private
sessions
Time constraints?
Authority to settle
Confidentiality
Guidelines
Goal of mediation mutually satisfactory solution
Commitment to begin
The first joint sessions:
Parties statements
Which party should speak first?
Encourage brief statement (nutshell,
idea of topics)
How to begin? Briefly, what has
brought you to the table today?
Listening (not questioning). No probing.
Everyone at the table to be offered
opportunity to speak
Generally, minimal note taking
The first joint sessions :
Summarising WHY?
Mediator to
Check that what was heard was what
was intended
Help them to hear each other
Provide early acknowledgement of
concerns
Show they have been heard
The first joint sessions :
HOW?
Mediator to
Listen first to ALL parties statements
Attribute ownership of ideas to them
eg, you have told us that; In your
view
Use their language as far as
practicable
Provide a summary not a transcript
Setting the agenda
Listen first (dont rely only on
information received prior to mediation)
Neutral and mutual
Mediator takes the lead
Use bullets dont number
Use whiteboard
Dont over-consult on framing
Check list with parties
The first joint session:
Issue Exploration
Allow parties to determine where to
begin
Treat each issue separately (as far as
possible)
Provide an opportunity for each issue to
be discussed
Facilitate direct communication
Clarifying questions, not probing
Note any options which emerge
The private sessions
WHY?
Break from intensity of joint
session exploration
Time out for reflection
Provide opportunity for discussion
of additional, confidential
information/topics
Explore issues in more depth
The private sessions
WHY?
Deal with strong emotions
Explore and evaluate options for all
parties
Reality test options
Prepare for final negotiations
The private sessions
WITH WHOM?
Speak with each party and their
team in turn
Can speak to lawyers separately
Usually do not break lawyers and
clients
The private sessions
HOW?
Remind parties of confidentiality
at end of joint session AND at
beginning of each private session
Time management tell them in
joint session what is expected
(max 30 minutes)
Who first? Balanced treatment
Ensure opportunity for equal time
Exploration before solutions
The private sessions
HOW? (cont)
Anything which hasnt yet been said
Dont write on whiteboard
Allow full expression of feelings and
emotion
Explore new and existing agenda
topicsReality test positions and
options
What would happen if unable to reach
an agreement BATNA, WATNA check
Summary
Joint Negotiation
Session(s) - purpose
Focus on resolution the future
To generate and evaluate range of
settlement options
To reality-test and fine-tune the
final agreement
To draft final agreement
Joint Negotiation
Session(s) - tips
Fatigue and pessimism can set in
Should normalise the situation and
encourage parties to remain
focused
Parties tempted to ask mediator to
act as messenger
New options can emerge and
should be evaluated
Successful outcomes in
mediation
Isolation of issues
Partial resolution on some of the issues
Agreement on issues which remain in
dispute
Agreement on all issues
Satisfaction of needs of parties
Understanding of the Needs of each other
Relationship maintained
Relationship enhanced
Insurance Mediation
Bureau
Practical
Eg
From : General Insurance Association
of
Malaysia
In practice, eg:
Scenario 1: The Insured vehicle sustained
damages in an accident. It was discovered
that the engine of the vehicle had been
changed to another with the same cubic
capacity. The Insured had, at the material
time, submitted the relevant documents to
the JPJ notifying the change of the engine
and it was subsequently endorsed on the
Insurance Mediation
Bureau Practical Eg
The Insurers repudiated liability on
(cont)
the claim for indemnity for damage
to the insured vehicle on the
ground that "the engine has been
changed and the same was not
disclosed to us".
Insurance Mediation
Bureau Practical Eg
The Mediator at the Bureau noted the following
(cont)
condition that applies to the Insured's whole
policy:
"7. This policy will only be operative if (v) You have taken all reasonable precautions to
maintain Your Vehicle in an efficient roadworthy
condition".
To fulfil this condition, it is therefore imperative
that the Insured should change the engine of the
insured vehicle if it is found to be defective or
malfunctioned.
Insurance Mediation
Bureau Practical Eg
The Mediator also pointed out that there
(cont)
was
relevant provision in the Guidelines
on
Claims
Settlement
Practices
concerning the matter:"An insurer should not deny any claim
merely on grounds of technical breaches
of warranty or policy condition which are
not material or connected to the
circumstances of loss, unless fraud is
suspected."
Insurance Mediation
Bureau Practical Eg
In
the matter under reference the engine
(cont)
was changed to another with the same
cubic capacity. Moreover, the JPJ had been
formally notified and the necessary
endorsement had accordingly been made
in the record. There was no question of the
new engine being overpowered that could
affect the judgement of the underwriters to
underwrite the risk neither was there any
evidence of fraud.
Insurance Mediation
Bureau Practical Eg
In(cont)
view of the above, the Mediator
held that the Insured's decision in
changing the engine of the Insured
vehicle to another with the same cubic
capacity was a technical breach which
was not material to the circumstances
of loss. Accordingly, the Insurers were
liable to indemnify the Insured for the
damages to the insured vehicle.
Mediation Rules
Agreement of Parties
Initiation of Mediation
Request for Mediation
Appointment of Mediator
Disqualification of Mediator
Mediation Agreement
Representation
Mediation Rules
Date, Time and Place of Mediation
Authority of Mediator
Settlement Agreement
Privacy
Confidentiality
No Stenographic Record, AudioVisual Recording of Formal Record
Mediation Rules
Stay of Proceedings
Termination of Mediation
Exclusion of Liability (Waiver)
Interpretation and Application of
Rules
Expenses
Stamping of Agreement
Mediator Code of Conduct
Acceptance of Assignment
Impartiality
Confidentiality
Settlement
Withdrawal
Fees
Evaluation
Confidentiality Code
US position : Uniform Mediation Act s
8 : Unless subject to the [insert
statutory references to open meetings
act and open records act], mediation
communications are confidential to the
extent agreed by the parties or
provided by other law or rule of this
State.
Confidentiality Code
EUs position : Whilst confidentiality is generally
regarded as an essential feature of ADR
proceedings, there will be circumstances in
which it is not required, or cannot possibly be
achieved. In each Member State, there are rules
which govern the conduct of professionals
involved in settlement negotiations. In some
jurisdictions and situations, this will be a matter
of public law.
Confidentiality Code
EUs position : Article 10 provides for
a general duty of confidentiality in the
sense that all information relating to
the conciliation proceedings shall be
kept
confidential,
except
where
disclosure is required under the law or
for the purposes of implementation or
enforcement
of
a
settlement
agreement.
Confidentiality Code
EUs position : Article 10 provides for a general
duty of confidentiality in the sense that all
information relating to the conciliation
proceedings shall be kept confidential, except
where disclosure is required under the law or
for the purposes of implementation or
enforcement of a settlement agreement.
Source: EU Green Paper
http://www.arbitrators.org/Institute/Downloads/EU_Green_Pap
er.PDF
Confidentiality Code
Australias position : Position varies
depending on the sort of ADR process and
the applicable legislation. For example,
the Federal Court of Australia Act 1976
(Cth), s 53B provides that evidence of
anything said or any admission made at a
mediation referred under the Act is not
admissible in any court.
Source: http://www.austlii.edu.au/
Confidentiality Code
Australias position : Amendments to the
Family Law Act 1975 in 1996 provide that
evidence of anything said or any admissions
made at a meeting conducted by a court
mediator, a community or private mediator or
a counsellor is not admissible in any court (s
19N). However, confidentiality is relaxed where
there are reasonable grounds for suspecting
that a child has been abused, or is at risked of
being abused. (s 67ZA(1)(c) and (2)).
Source: http://www.austlii.edu.au/
Confidentiality Code
Australias position : MEDIATION ACT 1997 - SECT 9 :
Admissibility of evidence:
(a)
a communication made in a mediation session;
or
(b)
a document, whether delivered or not, prepared
(i)
for the purposes of;
(ii)
in the course of; or
(iii)
pursuant to a decision taken or undertaking
given in; a mediation session;
is not admissible in any proceedings except in accordance
with section 131 of the Evidence Act 1995 of the
Commonwealth.
Source: http://www.austlii.edu.au/
Confidentiality Code
Australias position : Some exceptions under
section 131 of the Evidence Act 1995 are:
(j) the communication was made, or the document
was prepared, in furtherance of the commission of
a fraud or an offence or the commission of an act
that renders a person liable to a civil penalty; or
(k) one of the persons in dispute, or an employee or
agent of such a person, knew or ought reasonably
to have known that the communication was made,
or the document was prepared, in furtherance of a
deliberate abuse of a power.
Source: http://www.austlii.edu.au/
Protection
Australias position : MEDIATION ACT 1997 - SECT 11
Protection from defamation
11. The same privilege with respect to defamation as
exists in relation to judicial proceedings exists in
relation to
(a)
a mediation session; or
(b)
a document or other material
(i)
produced at a mediation session; or
(ii)
given to a registered mediator for the
purpose of arranging or conducting a mediation
session.
Source: http://www.austlii.edu.au/
Protection
Australias position : MEDIATION ACT 1997 SECT 12
Protection of mediators
12. A registered mediator has, in the
performance in good faith of his or her
functions as mediator, the same protection
and immunity as a judge of the Supreme
Court.
Source: http://www.austlii.edu.au/
Conclusion
The concept of mediation is meant
to be simple, ie settlement
negotiation with the assistance of a
neutral third party.
However, like the development of
law, there are still more to be
achieved vide the implementation
of legislation and rules.
THE END
Assisted by:
Sally Kee
LLB (Hons) (London), of Lincolns Inn, Barrister
Advocates & Solicitor
High Court of Malaya
