It’s good to talk: ministers told to learn from Ferguson Marine ferry fiasco

First published by The Times on 6 February 2020

A row over the delayed and costly construction of two ferries in Port Glasgow has become so messy that it could end up in the courts, but the saga does not appear to have prompted the Scottish government to make mediation a central part of the civil justice system.

The Ferguson Marine shipyard, owned by Jim McColl, one of the country’s richest men, was nationalised in December after a dispute with Caledonian Maritime Assets, a Scottish government quango from which it had won a £97 million contract to build the ferries, over the cost and time frame of the project. Neither ferry is expected to be ready soon, even though the delivery date was initially set for the start of 2018. The bill for building them has doubled to more than £200 million.

McColl has said that he is considering taking legal action against the government over its handling of the nationalisation. Last month he claimed that Derek Mackay, the Scottish finance secretary, may have defamed his executives by claiming that the impact of poor management at the shipyard had been “disastrous”.

Arbitration and mediation were suggested at several points during the disagreement over who should cover the rising costs, but the terms of engagement could not be agreed.

Last June, having carried out a review with the government’s support, the group Scottish Mediation recommended that arguing parties be compelled to consider mediation rather than taking their dispute straight to court. Ash Denham, the community safety minister, responded in December, days before the nationalisation of the shipyard, noting that, while “it is clear that mediation should have a bigger role to play in helping citizens resolve disputes”, the government wanted to consult the public before any changes were made.

Ministers have yet to launch a consultation on Scottish Mediation’s recommendations, but the organisation is urging businesses to sign up to a charter. Graham Boyack, the body’s director, said that the agreement was intended to prompt organisations to consider how they could use mediation as part of everyday business.

“Mediation can be effective for organisations in resolving disputes, and at the same time it helps maintain both internal and external relationships,” Boyack says. “That can have an impact on an organisation’s culture because it shows that they will seek to have dialogue as a key part of how they do business.”

Scottish Mediation’s wider aim is to “normalise” mediation within the justice system so that all parties with a dispute would be compelled to attend at least one session before deciding how to proceed.

Denham argues that this would not be appropriate in some instances.

“I am highly sceptical that mediation should be used in cases involving domestic abuse, sexual violence or gender-based violence,” she said in her response to Scottish Mediation’s report.

Alun Thomas, a partner at the law firm Anderson Strathern, warns that the introduction of an “automatic red flag” to exempt some types of cases from mediation may not be wise.

“If you have an automatic ban for cases involving domestic abuse you would be denying women an opportunity to have a confidential conversation that might be helpful,” he says. “It’s about having constructive dialogue rather than jumping to a position.”

David Hossack, a partner at Morton Fraser, notes that, even if a dispute ultimately goes to court, mediation beforehand “allows parties to say what they need to say in a way that’s not possible in the courts”. He adds: “Conversations can be bad as well as good, but if they help to deal with things in a constructive way there’s a better chance of getting a good outcome.”

Hossack believes that the fact the Scottish government is looking seriously at mediation shows there has been a change in the way the process is viewed by lawyers and others.

As recently as 2004 Sheriff James Taylor, who went on to become sheriff principal for Glasgow and Strathkelvin, summed up the prevailing attitude when he wrote that, far from helping people to resolve disputes without the expense of going to court, mediation was often seen as “a crutch for the incompetent”.