Mediation Bill

Mdm Speaker, I first wish to declare my interest as a dispute resolution lawyer in private practice. The Mediation Bill serves to introduce a coherent mediation framework in Singapore on various aspects of mediation currently dealt with by agreement between parties to mediation, such as issues of confidentiality and enforceability of mediated settlement agreements. I support the objectives of the Bill including the economic objectives outlined by the learned Senior Minister of State earlier in her speech.

I take this opportunity to seek clarification on the policy underpinnings of the Bill in two areas.

With the recent launches of the Singapore International Mediation Centre and the Singapore International Mediation Institute, we have made much further inroad into encouraging mediation as a cost effective form of dispute resolution for potential litigants and in attracting such work into Singapore. Indeed, I note that the courts are now empowered to take the parties' conduct, including conduct in relation to whether the disputes were or were not submitted to mediation, into account when making decisions about costs at the end of proceedings.

In a parallel development in the UK occurring in July last year, it was recommended by Lord Justice Briggs in his Final Report of the UK Civil Courts Structure Review, that "resolution by parties [be made] a normal part of civil dispute resolution, rather than something alternative to the mainstream." In his words, the recommendation seeks to "take the 'A' out of ADR", or Alternative Dispute Resolution.

Could the Senior Minister of State kindly clarify if the policy intention behind the Mediation Bill vis a vis litigation in the courts is to promote mediation as a mainstream form of dispute resolution mechanism rather than an alternative dispute resolution, that is, to encourage parties, especially commercial parties, to turn to pre-action mediation to resolve their disputes before resorting to litigation or arbitration?

If so, I wonder if the Mediation Bill can be strengthened even further to encourage parties to refer their dispute to mediation before litigating by providing for a suspension or extension of the limitation period for instituting litigation or arbitration of a case that is being mediated. Currently, in Singapore, a party wishing to mediate has to either obtain the agreement of the other party to suspend the limitation period, or to first commence proceedings and seek a stay of proceedings while the mediation takes place. In contrast, pursuant to the EU Mediation Directive applicable to cross-border disputes, EU member states are required ensure that the limitation period shall be extended during the period of the mediation process.

Some criticism may be levied that allowing the limitation period to be suspended while mediation takes place may be abused by parties as a tactical manoeuvre to buy more time to commence a claim. While this is possible, I wish to highlight that mediation is, at its core, a voluntary process. It is open to a party to withdraw from a mediation process if it is of the view that the other party is not genuinely interested in mediating to resolve the dispute amicably, or if is using the mediation process to obtain an advantage in respect of the limitation period.

While we should not go so far as to mandate mediation before litigation as this would be an unwarranted restraint on an individual's right of access to court, we should do as much as possible to encourage pre-action mediation, and incentivise parties to do so.

Second, with respect to litigants who are represented by the Legal Aid Bureau in civil claims not involving family matters, I note that, pursuant to section 16(1) of the Legal Aid and Advice Act, aided persons are generally not liable to pay legal costs. There is therefore no structural incentive for legally aided persons to mediate their disputes that are subject of court proceedings.

In addition, legal aid is granted only in relation to civil proceedings in the courts under the 1st schedule to the Legal Aid and Advice Act, not mediation.

Since costs of legally aided persons are borne by the state and it is plainly obvious that pre-action mediation can result in significant savings of cost and time, I wonder if legal aid may be extended to cover mediation as well. I further suggest that it be provided that aided persons in pending court proceedings be obliged to comply with advice by their assigned solicitors to submit their cases for mediation.

To conclude, I believe the Mediation Bill will achieve the objectives of enhancing and strengthening the mediation framework in Singapore to facilitate the resolution of disputes by mediation. I support the Bill.

Mdm Speaker, the Mediation Bill before this House today gives effect, as the Senior Minister of State said, to the Working Group's final major recommendation in 2013 that mediation should have statutory force. The Bill should be welcomed and I think I speak on behalf of all the legal academics that I can think of, to say that mediation has been often proposed as a form of dispute resolution that has been described as the poorer cousin of dispute resolution when compared to litigation and arbitration.

But seeing people like Mr Joel Lee, Chairman of the Singapore International Mediation Institute (SIMI), chairing it, we have a lot of encouragement and hope.

This Bill should be welcomed, not only because it codifies the definitions that we are used to as lawyers and the principles of mediation and mediation agreement, and the mediation settlement agreement, but also because it provides clarity on the position of mediation in relation to litigation and arbitration.

Clause 8, for example, enables parties to a mediation agreement to apply to court for a stay of proceedings and for the court to make interim or supplementary orders to preserve the parties' rights as long as the court proceedings relate to the subject of the mediation agreement. This is something that is commonplace in the arbitration context, but is not so well known in the mediation one.

Clause 12 responds to a complaint that counsel and clients often level at mediation, as the Senior Minister of State mentioned earlier. That is, that mediated settlements are only contractually enforceable between parties. This new clause allows parties to consensually apply to court for a record of the mediated settlement as an order of court which can be enforced in the same manner as a court judgement would. Importantly, clause 12(4) gives the court useful guidance as to the circumstances when it can, in its discretion, refuse to record a mediated settlement agreement.

Finally, clauses 9 to 11 underline the fact that mediation is a private and confidential process. This is something that mediation shares with arbitration. The Bill prescribes a general duty of confidentiality over all mediation communications with defined crave-outs and exceptions under which disclosure may take place in certain circumstances. This will certainly add certainty to the law of mediation.

Having said this, Madam, I would like to ask the following questions of the Ministry in clarification.

First, in response to feedback during the public consultations, the Ministry responded to say that the Bill "does not seek to regulate the conduct of mediation itself, or set out mediator standards". I ask the Senior Minister of State, will ethical breaches in mediation, such as conflicts of interest, impartiality and even mediator competence, be left to the courts alone? Or, could this, in time, be something that the Ministry could envision being resolved by committees established by the Singapore International Mediation Centre (SIMC) the Singapore Medication Centre (SMC) or the Singapore International Mediation Institute, as the designated mediation service providers and mediation institutions respectively?

I ask this as well, as this seems to be a direction that arbitration seems to be headed in − looking to the chartered institutes as a training body, resolving some conflict of interest problems, as opposed to having it always decided by the institutions.

In some respects, Madam, this Bill seems to be a nod to the UNCITRAL Model Law on International Commercial Conciliation. What is the Ministry's position on the proposed UNCITRAL Convention on Enforcement of Conciliated Settlement Agreements? In the meantime, while we are waiting for such a convention to come about, how does the Ministry believe that the SIAC-SIMC arb-med-arb, which the Senior Minister of State mentioned, could provide the requisite basis to secure appropriate enforcement? I support this Bill, Madam.

Mdm Speaker, I rise in support of the Bill. Singapore prides itself to have a clear and distinct mediation framework that effectively resolves disputes or conflicts in a smooth, expeditious and cost-effective manner. The Singapore Government has also been actively promoting mediation in Singapore and encouraging parties to resolve disputes through mediation rather than litigation or arbitration.

In industrial relations disputes, cases are resolved through negotiations between two parties and if this comes to no avail, the dispute is being sought for third-party mediation, so that issues are resolved without further damage and to arrive at a win-win outcome.

Madam, with reference to the Bill, I would like to seek the following clarifications.

Clause 6(2)(a) states that this Act does not apply to, or in relation to: any mediation or conciliation proceeding, process, scheme or framework conducted under, or provided by or under, any written law. I would like to seek clarification on the coverage of the application of this Act as clause 6(2)(a) provides wide exclusions regarding its application.

For example, it would exclude workplace disputes involving executive employees and their employers as there are provisions for tripartite mediation of disputes involving executive employees under Industrial Relations Act? Similarly are family disputes also excluded from this Act as there are laws covering mediation referred by Family Justice Courts, and mediation for Commercial disputes are also covered by the Small Claims Tribunals?

What roles do the Singapore Mediation Centre (SMC) or Singapore International Mediation Centre (SIMC) play with reference to the Act? Will they be considered as the "designated mediation service providers" under this Act? Do the mediation procedures of Singapore Mediation Centre apply in this Act?

Does the Act require the presence of lawyers representing the interests of the parties involved in drafting the mediation agreement? Madam, with this, I thank you.

Madam, this Bill seeks to strengthen the overall framework for mediation in Singapore, paving the way for Singapore to position itself as a major international centre.

I applaud the work done by the International Commercial Mediation Working Group in putting together these recommendations. Most notably, I welcome the provisions for parties to apply for stay of court proceedings, and defining the scope of confidentiality of these proceedings. I understand that while the mediation process has always been regarded as confidential, the scope of confidentiality was unclear. Furthermore, the Bill also codifies the circumstances under which disclosure may take place.

I also welcome the proposal to extend the existing Legal Profession Act exceptions applicable to arbitration, to mediation. Mediation, unlike arbitration, is not commonly understood to involve the practice of law, and often does not refer to legal principles at all. Nonetheless, in certain cases the relevant law may be discussed during the mediation session.

The amendment to the Legal Profession Act makes clear that participation by foreign mediators and foreign-qualified counsel in such mediation sessions will not amount to unauthorised practice of Singapore law.

Madam, while I believe these recommendations have been well-thought through, allow me to ask a few questions and seek clarifications.

Firstly, if this Bill is enacted, it will substantially enhance the enforceability of successfully-mediated cases. However, the Bill mentions that the court may refuse to record a mediated settlement if the subject matter is incapable of settlement. This provision seems to envisage that some matters may not be settled through mediation − for example, a mediated settlement on the custody of a child that may not be in the interest of the child. But it is the view of some mediators that all cases can be settled through mediation. Would the Ministry be able to provide more clarity on which cases it envisages to be unsuitable for mediation?

Secondly, how will the mediation process be affected by the proposed changes from the Civil Law (Amendment) Bill? I ask this with the knowledge that the Bill covers third-party funding for international arbitration proceedings and related proceedings, which also includes mediation. Madam, these questions notwithstanding, I stand in support of the Bill.

I welcome the changes to this Bill. I just have a few clarifications for the Minister. Firstly, pertaining to the Mediation Service Provider, can I ask the Minister for the details? How are these chosen? And how many service providers are we looking at appointing further and, especially, foreign ones as well? And how will they be accredited to carry out the mediation?

These service providers and their personnel will need to be familiar with Ministry's policies and agencies' guidelines in order to provide the best approach and advisories to the parties being mediated. What about the registration and training requirements of the mediators from the appointed service providers? And also, moving along, how about their continuing professional development? How are they going to be monitored and assessed as well?

Now, we are talking about commercial cases particularly with this Bill. For sales disputes, I know mediators and counsellors have the lemon law as a reference. How about for the service industry, which is really quite broad ranging and wide as well. So, mediators covering these cases may need to be informed and empowered in this aspect

Also, as we know in mediation, the choice of mediators plays a critical role. Experience and ability to engage people becomes important. Not forgetting their track records as well.

Therefore, will there also be some kind of consideration for specialist mediators? For example, if there is a related case, something pertaining to medical product or service and someone who is conversant and versatile in this area and discipline will be very useful to have as well. Will we be planning to have this more formalised and, perhaps, be made available or, perhaps, have a list of resource mediators who can be called upon for such relevant cases?

Finally, Madam, I would also like to find out if there will be any formal changes to the workings of the SMC, the CMC and the SIMC with the enactment of this Bill. I support the Bill.

Mdm Speaker, I thank all the Members who have spoken and for their strong support of the Bill − mediation is now an integral feature of our dispute resolution landscape.

Mr Murali Pillai sought clarification on whether the Bill is intended to promote mediation as a mainstream form of dispute resolution mechanism as opposed to being an "alternative" dispute resolution option. If so, he suggested that parties can be encouraged to turn to pre-action mediation to resolve their disputes, before resorting to litigation or arbitration, through: (i) allowing an extension of time limits on a claim, where this is being mediated; and (ii) extending legal aid to cover mediation, and requiring aided persons to comply with advice by their assigned solicitors to submit their cases for mediation.

First, on the question of what type of dispute resolution. Our position has always been to encourage parties to find the most "appropriate" dispute resolution mechanism − so it is still an "a", it is not "alternative", but "appropriate". If you think about it, what we have been doing is we offer different products. You can have arbitration, litigation and mediation complements the other two. So, there is a lot of flexibility there, and it is really what suits the parties' needs. So, in that context, mediation is complementary to litigation and arbitration and it is important to recognise that there are unique circumstances behind individual disputes, and having alternative dispute resolution mechanisms will enable the parties to find the right solution to address their issues.

We are committed to mediation as a means for parties to settle disputes amicably, and in a cost-effective way. Yet, as the Member has pointed out, it is important to balance a pro-mediation approach against party autonomy to choose for themselves which dispute resolution option best suits their needs, and not to unduly restrict individuals' rights of access to court, or where they have agreed to other dispute resolution options such as arbitration. So, in short, we offer an array of options and parties can pick and choose whatever suits them best.

On the issue of extension of limitation periods, this will require careful study. In the majority of cases, however, it is unlikely that an ongoing mediation would have any great impact on a limitation period, given that mediation typically is a quick process.

There are also existing incentives in the court process to encourage parties to settle. The Mediation Bill itself will introduce provisions to support an application to stay court proceedings, on the basis of a mediation agreement − a point noted by many of the Members who spoke.

The court may also take into account parties' attempts to settle for costs of court proceedings. And parties are also actively encouraged to consider mediation. For cases in the State Courts, disputes may be referred for mediation at the State Courts Centre for Dispute Resolution. New changes under the Supreme Court's Practice Directions also encourage lawyers and parties to consider if mediation is appropriate for their case.

If we were to extend limitation periods, where mediation takes place, this wider context would have to be considered.

The Member's second set of suggestions related to the provision of legal aid. I should clarify that legal aid does, in fact, cover mediations which are conducted as part of the process of resolving the dispute between parties. There are also existing incentives for aided litigants to consider mediation as a viable dispute resolution option. The Legal Aid Bureau encourages all legally aided applicants to settle their disputes amicably. That makes sense because it saves time, it saves cost. Only if mediation is not successful or not possible, for example, because the other party does not wish to mediate or does not turn up, would the applicant be advised to proceed with litigation. And this is particularly so for family related proceedings.

If an applicant unreasonably refuses to mediate the matter, and the Legal Aid Bureau is of the view that mediation would be a good way to resolve the dispute at hand, a recommendation can be made to the Legal Aid Board on whether to refuse or cancel aid in the matter.

Mr Patrick Tay and Assoc Prof Fatimah Lateef both spoke on the importance of setting standards and professionalisation of the mediation industry. Assoc Prof Fatimah Lateef also asked if we had considered the issue of specialist mediators.

The Bill does not itself regulate the provision of mediation services or accreditation of mediators. Flexibility is important in ensuring the industry can develop. What we have done is to put in place measures to improve training and standards for the mediation industry, in line with our aim to grow Singapore as an international commercial mediation centre.

To that end, we have established the Singapore International Mediation Institute (SIMI), as the premier independent professional standards body, to promote mediation and set high competency standards in mediation practice.

For mediation training and research, there is also the Singapore International Dispute Resolution Academy (SIDRA). SIDRA is the first regional institution dedicated to thought leadership, and training and educational excellence in negotiation and dispute resolution.

As for specialist mediators, both the Singapore Mediation Centre (SMC) and the Singapore International Mediation Centre (SIMC) have specialist lists of mediators available for parties to choose from. The specialist mediators span a wide range of industries and sectors such as banking, finance, family, probate and so on.

Mr Patrick Tay suggested putting in place a grievance system to deal with complaints about mediators, while Asst Prof Mahdev Mohan asked if we will in due course establish a form of disciplinary tribunal to govern professional ethics rules for mediators.

The mediation industry is a growing one and a heavy-handed approach may not be the best way to go forward at this point in time. With greater training and accreditation of mediators by the various mediation institutions, we hope that the mediation community will continue to develop its own approach through professional ethics guidance. But we will continue to monitor this, as the industry continues to professionalise, and we will fine-tune our framework as we learn from experience.

Ms Thanaletchmi and Assoc Prof Fatimah Lateef both had questions on designated mediation service providers and certified mediators under the Bill, and who will be appointed.

The "designated mediation service provider" and "certified mediator" contained in the Bill serve a limited purpose. Specifically, in order for parties to make use of the provision to enable the enforcement of a mediated settlement agreement recorded as a court order in clause 12 of the Bill, it is a pre-requisite that the mediation in question is administered by either the designated mediation service provider, or conducted by a certified mediator. The reason for having this criteria is to ensure that the settlement agreements are of a quality that can be readily recorded by the courts.

For now, trusted institutions like SIMC and SMC will be considered for designation as mediation service providers. The mechanism will be reviewed and may be opened up to more institutions when it has been successfully implemented and becomes more established.

Ms Thanaletchmi asked if the Bill applies to tripartite mediations conducted under the Industrial Relations Act, or mediations conducted under other legislative frameworks, for example, the Family Justice Court under the Women's Charter, or mediations conducted by the Small Claims Tribunal.

The Bill will not apply to mediations conducted under the Industrial Relations Act, those conducted by the Family Justice Court under the Women's Charter, or those conducted under the Small Claims Tribunal framework. As explained earlier, this is to prevent inconsistency with existing legislative frameworks and rules guiding those mediations. So, our approach is really not a one-size-fits-all. We encourage mediation for all, but within each type of category of claim or type of action, there may be a more specialist approach. So, we have got existing frameworks for existing specialist areas like family law and industrial relations.

Ms Thanaletchmi also sought clarification on whether the Bill requires the presence of lawyers representing the interests of the parties involved in drafting the mediation agreement. The Bill does not require the presence of lawyers. It is up to the parties as to whether they wish to involve their lawyers in the mediation.

On observations made by Mr Louis Ng on the proposal to extend the existing Legal Profession Act exceptions applicable to arbitration to mediation, I would like to clarify that the exceptions are not broad-based, but will only apply in the circumstances set out in the Bill.

Mr Louis Ng also sought clarification on clause 12(4)(b) of the Bill, which states that the court may refuse to record a mediated settlement agreement as an order of court if "the subject matter of the agreement is not capable of settlement". Clause 12(4)(b) of the Bill provides that the court can refuse to record the mediated settlement agreements if the subject matter clearly cannot be resolved through mediation, for example, if the subject matter is illegal. So, if you have a dispute and let us say, for some reason, the two parties agree that the way to resolve that dispute is to go and cheat a third person. That will clearly be unenforceable − no court will condone that.

Mr Louis Ng had a question on whether the mediation process will be affected by the proposed changes from the Civil Law (Amendment) Bill. Third-party funding under the Civil Law (Amendment) Bill will only be extended to mediation proceedings arising out of or in any way connected with international arbitration proceedings, but not to standalone mediation proceedings.

Asst Prof Mahdev Mohan noted that some aspects of the Bill are a nod to the existing UNCITRAL Model Law on International Commercial Conciliation 2002, the 2002 Model Law, and asked about our position on the ongoing work of the UNCITRAL Working Group II (Dispute Settlement) on the preparation of an instrument on the enforcement of international commercial settlement agreements resulting from conciliation.

We have taken the 2002 Model Law into account in the crafting of the Bill. As the Member has noted, parts of the Bill take reference from the model provisions contained in the 2002 Model Law, which addresses procedural aspects of a conciliation, or mediation. As for the ongoing work of UNCITRAL Working Group II, Singapore has actively participated in those discussions, and will continue to do so. The upcoming 66th Working Group II session will take place in February, where the Working Group will be discussing both the form and substance of the proposed instrument.

As regards whether the Bill's restrictions on confidentiality will affect Member of Parliament or agency referrals to community mediation, the Bill will exclude community mediations, that is, those conducted under the Community Mediation Centre (CMC) or the Community Dispute Resolution Tribunal (CDRT). These will continue to be regulated by the legislation and rules that apply to those mediations today.

For referrals to the CMC, Members of Parliament and agencies will be updated on the outcome of such referrals. In another words, the CMC will update them whether the referred parties have agreed to attempt mediation and if they do so, whether the mediation materialised in a settlement or otherwise. The terms of the agreement, however, remain confidential. For mediations which are governed by the Bill, as is the case today, confidentiality can be waived if all parties consent to disclosure.

As regards the "recording" of a mediated settlement agreement, under clause 12 of the Bill, it refers to recording of the mediated settlement agreement as a court order, that means, in a written format.

Madam, I believe that addresses the issues raised by the Members. I would like once again to thank them for their strong support for this Bill, which is yet another step forward in helping Singapore to grow as a dispute resolution centre. Madam, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.