Mediation in Malaysia – 5 things you need to know

Written by Sophia Ismail

What is mediation?

Do you want more control over the outcome of your dispute?

Avoid the stressors of going to court?

Preserve the relationship with the other party?

In a quick and confidential manner?

Mediation is a form of alternative dispute resolution that may be right for you. It is a voluntary and informal process involving an impartial third party as the mediator, who facilitates reaching a mutually satisfactory resolution without going through or completing a trial or appeal. It contrasts litigation, where a dispute is settled in a court of law and a judge makes the final decision.

When should mediation be used?

Mediation can be carried out at any time, provided both parties to the dispute agree to have the matter mediated. This includes pre-litigation, and also at any point during the litigation process.

Judges may encourage parties to settle their disputes at the pre-trial case management or at any stage, even after a trial has commenced. It can even be suggested at the appeal stage. A settlement can also occur during any interlocutory application, for example at an application for summary judgment or striking out.

Under Practice Direction No. 4 of 2016, the Practice Direction on Mediation, it is stipulated that the following cases are easy to settle by mediation:

Claims for personal injuries and other damages due to road accidents or any other tortious acts because they are basically monetary claims;
Claims for defamation;
Matrimonial disputes;
Commercial disputes;
Contractual disputes; and
Intellectual Property cases.

When should mediation not be used?

The benefits of settlement by way of mediation is that it is confidential, expeditious and it is final. It is also generally inexpensive compared to costs of litigation or arbitration.

However, mediation may not be suitable in cases where;

A point of law needs to be decided by a court.
Where injunctive relief is necessary to protect one party. For example, when someone’s safety is at risk, where there has been domestic abuse or child abuse.
The relationship between the parties have already broken down and there is an unwillingness to settle.
There may be extreme conflict and an imbalance of power between the parties which the mediator cannot redress.

Each case has to be independently evaluated to determine if mediation is likely to be appropriate.

Who can be a mediator?

Mediation may be carried out in the following modes:

Judge-led Mediation

If the mediation is court-connected, Practice Direction No. 4 of 2016 on Mediation is applied. Under the Practice Direction, all Judges of the High Court and its Deputy Registrars, all Judges of the Sessions Court and Magistrates and their Assistant Registrars may, at the pre-trial case management stage as stipulated under Order 34 Rule 2 of the Rules of Court 2012, give such directions for settlement of the matter before the court by way of mediation.

Unless agreed by the parties, the Judge will not see the parties without their lawyer’s presence except in the cases where the parties are not represented. If the mediation is successful, the Judge mediating shall record a consent judgement on the terms as agreed by the parties.

by Asian International Arbitration Centre (AIAC); or

If parties wish to seek an amicable settlement of the dispute by mediation in accordance with the AIAC Rules of Mediation presently in force, upon the direction of the court, the Plaintiff’s solicitor shall, within seven (7) calendar days, notify in writing to the AIAC.

by other mediators agreeable by both parties.

If the parties so desire they may appoint more than 1 mediator to resolve their dispute.

Alternatively, parties can request that the Malaysian Mediation Centre of the Bar Council appoint a mediator from its list of certified mediators.

Please note that any mediator chosen by the parties may agree to be bound by the MMC Code of Conduct and the MMC Mediation Rules, or not at all.

What about costs?

Great news! Court annexed mediation is free. However, in all other cases, the Mediator’s fee is to be shared equally between the parties, at a price negotiated directly with the Mediator. Other costs that would be shared equally is the hiring of the venue for the Mediation and any refreshments.

Additionally,

If parties wish to mediate via the AIAC, their Schedule of Fees shall apply;

Registration Fee: RM 150.00
Administrative Costs: RM 500.00 per case.
Mediator’s Fee: RM 5000.00 per day and RM 600.00 per hour for review of documents and related works.

(Note: the above rates are for Domestic Mediation, rates for International Mediation can be found on the AIAC website)

If parties wish to mediate using services of Malaysian Mediation Centre, the fees applicable are;