Ask the Editor

I have been asked to go to a mediation. Do I have to go – and what is it?

Thanks for this question, and it is something we are regularly asked. I am actually a big fan of the mediation process and many of our claims have been settled during or shortly after a mediation. Mediation is one of the Alternative Dispute Resolution (ADR) systems you often hear about. Alternative in this context being alternative to court litigation.

To address the first part of the question, the normal answer is no, you don’t have to go. It is usually a voluntary process and ultimately it works better if people are there voluntarily rather than being forced unwillingly to attend. However, sometimes there may be a contractual obligation to attend. Other times the courts – as part of the litigation process – will require you to attend a mediation. Ultimately though, it is usually voluntary. That said, it is often frowned upon by the court if a party has refused (without a very good reason) to attend a mediation.

The actual mediation is simply a settlement meeting with a third party mediator to assist. The mediator is often a lawyer or expert in the field. Whilst the parties can, to an extent, do whatever they like in the mediation, usually all parties will begin in the same room with the mediator. Each party will state their case to the other. After this, the parties will retreat to their own rooms and the mediator will go back and forth between the parties trying to mediate a solution. Anything a party says to the mediator is completely confidential and the mediator will only pass it on with express instructions to do so.

The length of the mediation will be decided by the parties. Usually they are set for one day. We have seen deliberately short mediations ie 3 hours max. We have also had very long mediations where the matter is complicated and/or there are multiple parties.

The mediator is simply a facilitator and does not decide on the settlement terms like a judge or arbitrator. The settlement will be reached and agreed upon by the parties (or not). Due to this, there can be very imaginative solutions to problems which a court would be unable to accommodate.

Can we adopt new procedures to issuing bills of lading?

We occasionally get questions from ship agent members who issue bills of lading on behalf of owners, about whether they can adopt a different procedure to issuing the bills, for eg. sending a scan of the bill to the shipper who will then endorse the bill. Members should ensure that they discuss any new procedure fully with owners and get written approval from owners before changing an already approved process. While the new process may save time for all parties, where it is more difficult to know whether a bill of lading is an original bill, this potentially increases the risk of fraud. ITIC has seen increasing claims of fraudulent bills being presented to the disport agent and care must be taken that “original” bills are less easily reproduced or more easily recognised. Members should ensure that approval for issuing bills is also obtained from the actual party they are signing on behalf of – so if this is the Master/owners, approval must come from them, even if members are appointed or nominated by the charterers.