ByteSize: The SCL Mediation Scheme - a new initiative for resolving technology disputes

On 8 October 2024, the Society for Computers and Law (the “SCL”) launched its new initiative for resolving technology disputes in England & Wales: the SCL Mediation Scheme (the “SCLM”). The SCLM is designed to help parties achieve a consensual resolution of “technology” disputes, which include (but are not limited to) the following areas:

• Software development contracts
• Outsourcing arrangements
• Systems integration contracts
• IT consultancy contracts
• Software licensing agreements
• Blockchain and smart contracts
• Contracts related to artificial intelligence
• Cloud computing contracts

The draft rules to the SCLM (the “SCLM Rules”) clarify that the scheme covers not only disputes about the underlying technology, but also commercial disputes arising from a “broader technology context” (SCLM Rules, Paragraph 1).

Comparison with the SCL Adjudication Scheme

The SCLM adds to and compliments the SCL’s existing toolkit, which includes the SCL Adjudication Scheme (the “SCLA”).

The SCLA was initiated on 15 October 2019 to facilitate the swift resolution of technology-related disputes, through a three-month procedure that adjudicators are encouraged to expedite where possible.

Following the clear message from the judiciary of the important of alternative dispute resolution, and mediation in particular, the SCLM may well present a more appealing option to the sector for achieving a consensual resolution (via mediation), enabling parties to retain more control over the outcome and preserve their ongoing relationships.

How the SCLM is Intended to Work in Practice

The SCLM is designed to follow a straightforward and efficient process:

1. Initiation (SCLM Rules, Paragraph 2): Any party to an agreement that includes a clause providing for mediation through the SCLM (see, for instance, the SCL model clause) can initiate the process by writing to the SCL’s Mediation and Adjudication Officer (the “Officer”).

2. Information Sheet (SCLM Rules, Paragraph 3): Each party completes an Information Sheet detailing the dispute and returns it to the Officer within seven days of receipt, along with the SCL administrative charge.

3. Mediator Proposal and Selection (SCLM Rules, Paragraphs 4 – 8):

• On each party’s payment of the SCL administrative charge, the Officer proposes one or more mediators from the SCL panel of mediators (the “Panel”), who are asked to confirm their availability and lack of conflict of interest. The parties must confirm their chosen mediator within seven days of receipt of the Officer’s proposals (SCLM Rules, Paragraph 4).
• After the proposed mediator is chosen (or appointed, pursuant to paragraph 8 of the SCLM Rules), the Officer will write to the parties to confirm the chosen or appointed mediator (the “Mediator”) and include written confirmation from the Mediator that they are:

(i) free to act;
(ii) impartial and independent; and
(iii) able to devote sufficient time to the mediation (SCLM Rules, Paragraph 5).

• Any party may propose a replacement mediator as soon as practicable, and the other party must inform the Officer of any objections within three working days of receipt of the request (SCLM Rules, Paragraph 6).

• The Officer may then, in their sole and absolute discretion, propose a replacement mediator from the Panel. The parties must confirm their chosen mediator within seven days of receipt of the Officer’s proposals (SCLM Rules, Paragraph 7).

• If the parties fail to choose a mediator, the Officer will promptly appoint a mediator from the Panel (SCLM Rules, Paragraph 8).

4. Terms of Appointment and Mediation Agreement (SCLM Rules, Paragraph 9): Together with the Mediator, the parties are free to agree on the terms of the mediation. However, the parties must irrevocably agree to comply with certain terms, such as acting in good faith throughout the mediation process and maintaining confidentiality.

Implementation Timeline

The SCLM was launched 8 October 2024 at the SCL AI Conference in London.

The SCL is also seeking applications from candidates who meet the eligibility criteria to join the inaugural Panel (whose composition will be subject to regular review).