The Mediation That Wasn't Voluntary
A bank sues a borrower for KSh 8 million. At the first case management conference, the judge, frustrated by a congested cause list, orders the parties to attend court-annexed mediation within 14 days and directs that 'no party shall file any further application until mediation is concluded.' The borrower's advocate objects that the borrower disputes the debt entirely and wishes to apply for summary judgment to be set aside, but the judge insists. At mediation, the mediator - a court clerk with no training - tells the borrower that 'if you don't settle, the judge will give judgment against you.' The borrower signs a settlement agreement for KSh 6.5 million. Two weeks later, the borrower wants to resile, saying the settlement was procured by pressure and that the mediator was not accredited.
1. Was the court's order to mediate and the freeze on applications proper? Discuss.
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Referral to mediation: Courts are encouraged to refer parties to court-annexed mediation, but mediation is consensual in substance. A court may encourage or order attendance at mediation, but it cannot compel a party to settle. The order here is problematic in two respects:
- Blanket freeze on applications - a party has a right to be heard and to seek interlocutory relief (e.g., setting aside summary judgment, stay, security). A blanket prohibition on filing applications may amount to a denial of the right to a fair hearing and exceeds the court's case-management powers. Case management directions must be consistent with the rules and the Constitution.
- Timing - referring a matter to mediation before determining a jurisdictional or threshold application (such as an application to set aside summary judgment) may be premature; the court should first satisfy itself that the claim is genuinely disputed.
Conclusion: The freeze is liable to be set aside on application or appeal; the borrower should be permitted to prosecute the summary-judgment application. The referral itself may stand, but attendance cannot be coerced into settlement.
2. Can the borrower set aside the settlement agreement? Analyse the grounds.
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Grounds to challenge the settlement:
- Undue influence / duress / coercion. The mediator's statement that 'the judge will give judgment against you' is a threat that overbears the borrower's free will. A settlement procured by pressure is voidable. The borrower must show the pressure was illegitimate and induced the settlement.
- Misrepresentation. If the mediator misstated the legal position, that may found a claim, though mediators should not give legal advice.
- Mediator's lack of accreditation/training. Court-annexed mediation requires accredited mediators. A court clerk with no training acting as mediator is a procedural irregularity that undermines the integrity of the process. This supports setting aside but is not by itself decisive if the parties genuinely agreed.
- Absence of independent legal advice - the borrower was represented, which cuts against a claim of pressure, but the representative's objection on record helps.
Procedure: Apply to the court to set aside the settlement agreement/consent judgment, supported by affidavit evidence; alternatively plead fraud/misrepresentation in a fresh suit. The borrower should act promptly - delay and part-performance may amount to affirmation.
Practical note: If the agreement was recorded as a consent judgment, the court may set it aside on grounds of fraud, mistake, or collusion, or where it was obtained without jurisdiction.