Mediation

COMMERCIAL MEDIATION IN CONTEXT

 

The civil justice system has priced itself out of reach of most people and only the very rich and the very poor that qualify for legal aid can generally afford to venture to court.

 

For many different reasons, 95% of civil cases are settled on the steps of the court through negotiations and not through adjudication. Clients are therefore not likely to get their day in court, despite the guarantee contained in Section 34 of the Constitution of the Republic of South Africa, 1996 that everyone has the right to have any dispute resolved in a fair and public hearing before a court. Against this background, the South African Parliament has since 1994 passed the  Labour Relations Act, 66 of 1995 that established the Commission for Conciliation, Mediation and Arbitration (CCMA) that gave substance to the Section 34 right of employees to have their disputes resolved.  In doing so the CCMA revolutionised the way in which labour disputes were resolved.

 

Following the Labour Relations Act, Parliament has since 1994 passed 44 statutes that provide for mediation.  In 2009 the South African corporate sector finally endorsed mediation as an important element of good governance.

This is in line with the international trend in business and the South African parliament’s promotion of mediation as a tool to resolve disputes.  The endorsement came with the publication of the King 111 Report by the Institute of Directors. Mervyn King SC wrote as follows in the Report:

  1. Directors should preserve business relationships.  Consequently, when a dispute arises, in exercising their duty of care, they should endeavour to resolve it expeditiously, efficiently and effectively.
  2. Mediation enables novel solutions, which a court may not achieve, as it is constrained to enforce legal rights and obligations.  In mediation, the parties’ needs are considered, rather than their rights and obligations.  It is in this context that the Institute of Directors in South Africa (IoD) advocates mediation.

 

King III Report (2009) under the heading “Dispute Resolution” provides the following explanatory notes of the King 111 principle promoting mediations in the corporate sector:

  1. Directors and executives, in carrying out their fiduciary duties to a company, have to ensure that disputes are resolved as effectively, efficiently and expeditiously as possible [par 38].
  2. Mediation is more appropriate than litigation where interests of the disputing parties need to be addressed and commercial relationships need to be preserved and even enhanced [par 43].
  3. The use of mediation allows the parties to create options for resolution that are generally not available to the parties in litigation or in arbitration [par 49].
  4. In addition to the above initiatives in favour of mediation, the Rules Board of the Department of Justice is also actively searching for ways to implement what is known as court-°©‐aligned mediation in South Africa.
  5. The potential for mediation to resolve disputes has not gone unnoticed by the National Prosecuting Authority (NPA) and the NPA’s Policy Directive of April 2012 provides for informal mediation between the victim and offender. 
 

 

 

BD Boshoff
Director: Bernhoff Boerdery
Pieter Esterhuizen (prior KSE and now LUMENROCK) has been our auditor for the past 17 years. He was the accountant for several of our companies in property development, as well as the farming sector. It was during this period of time that he distinguished himself as a unique financial advisor, who is always capable of doing what is best for each and every company – in every possible situation. H...
Franco van der Westhuizen
Thanks a million - you guys are legends!
IS Ferreira
IS Ferreira
I have known Pieter Esterhuizen for over ten years in his capacity as my accountant and financial advisor. His sound and very professional financial advice has always been outstanding. He and his firm is dynamic, trustworthy and very loyal to me as a client. It is an honour and privilege for me to be associated with Pieter and LUMENROCK.

 

 


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