State Bodies and Litigation: An Alternative Approach

In the recent High Court judgment in Sere Holding Limited v HSE [2023] IEHC 63, the Court considered, amongst other things, whether there is an onus on State bodies or agencies to consider mediation in all cases in which they are involved.

The central issue that fell to be determined in the case centred around a procurement process run by the Health Service Executive (“HSE”) for emergency air ambulance services. One of the unsuccessful tenderers, Sere Holding Limited, challenged the award of the contract by the HSE on the grounds that the wining tenderer did not satisfy the selection criteria. However, the Court’s commentary in relation to alternative dispute resolution and mediation, particularly with respect to State bodies, is of particular interest.

In discussing the possibility of alternative dispute resolution in this matter, the Court commented that there is an “onus on all parties to litigation to, at least, consider resolving their disputes, without the necessity for court intervention and why this is particularly the case, where one party is a State agency.”

The Court found that a State agency should consider mediation in every dispute in which it is involved and noted that “litigation should be the last resort for the resolution of disputes in all cases and particularly in disputes involving State agencies”. The Court provided the following reasons for this conclusion:

• Litigation is the most “expensive way imaginable of resolving disputes”;
• The taxpayer foots the bill, even if the State agency wins;
• The costs are often not proportional to the value/importance of the dispute;
• Resolution of disputes by mediation would ease the pressure on court resources; and
• State agencies do not have the same financial incentive to mediate as other litigants.

The Court further highlighted the approach taken in Australia which obliges a State agency to endeavour “to avoid, prevent and limit the scope of legal proceedings wherever possible, including by giving consideration in all cases to alternative dispute resolution processes where appropriate”. Further, a State agency in Australia “is only to start court proceedings if it has considered other methods of dispute resolution (e.g. alternative dispute resolution or settlement negotiations).”

There is already an existing requirement in this jurisdiction pursuant to section 14 of the Mediation Act 2017 (the “Mediation Act”) for a solicitor to advise any client who is contemplating litigation to consider mediation as a means of attempting to resolve the dispute. Indeed, if a practising solicitor is acting on behalf of a client who intends to institute proceedings, the originating document by which proceedings are instituted must be accompanied by a statutory declaration made by the solicitor evidencing that the solicitor has advised the client on the merits of mediation.

However, notwithstanding the existence of this provision in the Mediation Act, mediation as a means of resolving a dispute can often be overlooked. This judgment is a welcome reminder for all of those involved in litigation or threatened litigation that mediation should always be strongly considered and litigation should only take place as a last resort. This is particularly so if the litigation involves a State agency.

A copy of the judgment can be found here.