Recently, we had cause to specify a form of mediation clause for a public sector contract. Here is a revised version of what we agreed. What do readers think?
22.1.1 The parties must attempt in good faith to resolve any dispute, difference or question between them arising out of or in connection with the Contract.
22.1.2 If a dispute, difference or question between the parties, arising out of or in connection with the Contract, cannot be resolved by direct negotiation between them, the parties agree to endeavour to resolve the matter by mediation in accordance with the following conditions.
22.1.3 To initiate the mediation either party shall give notice in writing to the other party requesting mediation. The mediator shall be selected by agreement between the parties, failing which agreement, within 15 days of one party or both parties requesting the appointment of a mediator, by the director of the Scottish Mediation Network after consultation with the parties. The mediation shall commence no later than 42 days after the selection of the mediator.
22.1.4 If there is any issue about the conduct of the mediation upon which the parties cannot agree, then the mediator selected in accordance with condition 22.1.3 shall, at the request of either party, decide that issue after consultation with the parties.
22.1.5 Unless they agree otherwise, the parties shall share equally the fees, costs and expenses relating to the mediation and each party shall pay its own expenses of preparation for, and participation and representation in, the mediation.
22.1.6 If the parties are unable to resolve the dispute, difference or question within 28 days of the mediation commencing, and only if the parties and the mediator agrees, the mediator may produce for the parties a non-binding recommendation of terms of settlement. This will not attempt to anticipate what a Court might order but will set out what the mediator suggests are appropriate settlement terms in all the circumstances.
22.1.7 Any settlement agreement reached in the mediation shall not be legally binding until it has been reduced to writing and signed by, or behalf of, both parties. The mediator may assist the parties in recording the outcome of the mediation.
22.1.8 Either party may terminate the mediation at any time. In any event, the mediation shall terminate when:
(a) a party withdraws from the mediation
(b) the parties resolve the dispute, difference or question
(c) a written agreement is concluded; or
(d) the mediator decides that continuing the mediation is unlikely to result in a settlement.
22.1.9 Only in the event that mediation does not resolve the dispute, difference or question, condition 22.2 will apply.
22.2.1 Any dispute or difference arising out of or in connection with the Contract, including any question regarding its existence, validity or termination which cannot be resolved in good faith, shall be determined by the appointment of a single arbitrator to be agreed between the parties, and failing agreement within 14 days after either party has given to the other a written request to concur in the appointment of an arbitrator, by an arbitrator to be appointed by the Scottish Arbitration Centre on the written application of either party. The seat of the arbitration shall be in Scotland. The language used in the arbitral proceedings shall be English.
22.2.2 Any arbitration under 22.2 is subject to the Arbitration (Scotland) Act 2010.”