The government has decided that the UK should join the Singapore Convention, which provides a framework for international recognition and enforcement of commercial mediation agreements.
The Ministry of Justice (MoJ) said it would send “a clear signal to our international partners that the UK is committed to maintaining and strengthening its position as a centre for dispute resolution and to promote the UK’s flourishing legal and mediation sectors”.
So far 55 countries have signed the convention, including the USA, China and India.
Joining them would provide reassurance that a mediated agreement would have the same protection as an arbitration award under the New York Convention.
The MoJ ran two consultations, the second of which last year received 20 responses largely supportive of the move, according to a report on it published last week.
Some thought there were limited benefits, given that effective mechanisms for enforcing settlement agreements in the UK already existed.
But, the MoJ said, “the UK reaffirming its position as a hub for dispute resolution was regarded as the most important reason to sign and ratify the convention by most of the respondents”.
It would also raise the profile of mediation and “signal the UK’s ambition to remain a global leader in private international law”.
The convention’s non-reciprocal nature means the UK court could be asked to enforce settlement agreements not concluded in another contracting state.
The MoJ said: “The UK will therefore have a duty to recognise and enforce settlement agreements from any jurisdiction, provided they meet the international and other criteria of the convention.
“This will enable wide application of the convention and wider use of mediation agreements, reinforcing and potentially increasing the UK’s attractiveness as a respected jurisdiction for international dispute resolution.”
It would also allow jurisprudence to form in the UK on mediated settlements and international cross-border mediation standards, respondents said.
“However, some concerns were also raised that the development of such jurisprudence and the increased involvement of lawyers could actually make enforcement more difficult.”
Parties will be able to explicitly opt-out of the convention, but the MoJ said it would not take up the right to make it opt-in or to exclude settlements in government cases – given .
A serious breach of mediator standards is a reason under the convention to deny relief and the MoJ noted that the UK did not have a set of standards for mediators.
A large number of mediators were registered with voluntary bodies which set behaviours as a condition of membership, while “mediation is often conducted by UK legal practitioners whose professional conduct for reserved legal activities will be subject to regulation by professional legal bodies and they would be expected to act in accordance with standards of conduct in all their activities”.
The government also last year consulted on regulating or strengthening the voluntary self-regulation for mediators in England and Wales, the outcome of which has not yet been published.
The MoJ said the convention could present opportunities to establish new relationships in the Indo-Pacific, Middle East and Africa, as well as strengthening existing relationships with key trading partners, including fellow Commonwealth nations, many of which were already signatories.
It said it was estimated that commercial mediation could save businesses around £5.9bn a year in management time, relationships, productivity and legal fees, with the value of UK mediated cases each year being estimated at around £20bn.