What is Mediation?
Mediation is an alternative to the traditional litigation process or also known as an alternative dispute resolution process. It is a process by which the Mediator facilitates both the complainant and the Financial Service Provider institution concerned to resolve the complaint by first investigating the complaint including all the issues involved.
The Mediation process includes investigation of the complaint through various sources based on the facts presented, having face to face discussion, having meetings with all the parties concerned or conducting an enquiry, taking into account the industry practices, consulting legal basis/sources before a decision is made. In some complaints, this process also enables both the complainant and the relevant financial institution to discuss the issue raised, clear-up misunderstandings, identify the underlying interests & concerns, find areas of agreement and agree to resolve the issue raised. The central person in this process is the Mediator. In the event both the parties involved in the complaint cannot reach an amicable settlement, then the Mediator will make a decision based on the investigation, industry practices and the relevant applicable law
At the mediation it is not usual to present witness and it may be sufficient to produce copies of documents and correspondence.
Representation of A Financial Service Provider In A Mediation
A Financial Service Provider named in the reference would be represented by its senior officer who is given authority to offer trade-off or settlement at the mediation proceeding. Lawyers representing both parties are not permitted in the mediation process.
However, the Board may authorise a specialist to advise the Mediator if such expertise is necessary for the Mediation. The cost of utilising the specialist would be borne by FMB.
Decision and Award
If the parties fail to reach an agreement, the Mediator, acting as an adjudicator, will make decision. In making any decision he/she will act in conformity with any applicable rule of law and accepted industry practice, but he/she is not bound by any previous decision made by him or any other Mediator or by any of his predecessors. Such a decision shall be binding upon the Financial Service Provider but the complainant has a choice either to accept or reject the decision. There is no appeal procedure within the Bureau.
Acceptance of The Decision/Award
The Mediator will inform the Financial Service Providers of acceptance of the Award by the complainant and require payment to be made. The Financial Service Provider will pay the complainant direct. The Bureau will not handle any payments resulting from the Mediator decision.
The award when paid and settled by a Financial Service Provider would constitute a full and final settlement of the claim against the Financial Service Provider and the complainant has no longer any right to institute legal proceedings or to submit to arbitration in respect of the same subject-matter. It is for the Financial Service Provider to obtain a proper documentation of discharge from the complainant.
Rejection of the Decision/Award
If the award is not accepted by the complainant, the complainant is free to take legal action or proceed to arbitration. Similarly, the rights of the Financial Service Provider are not affected by the decision of the Mediator which is rejected by the complainant.
Opinion and Terms of Settlement, Communication, Notes and Records Made During the Mediation
In all respects the mediation proceeding is deemed to be a 'without prejudice' proceeding. It is therefore important for the parties to a mediation to note and observe the following
(a) Whatever transpired during the course of mediation shall not in any way affect the rights or prejudice the position of the parties to the dispute in any subsequent judicial proceedings or arbitration.
(b) The opinion, terms of settlement and the decision of the Mediator should not be disclosed to the court or the arbitrator.
(c) The fact that information of whatsoever nature was made available to the Mediator, does not mean that privilege and confidentiality is waived for any subsequent judicial proceedings or arbitrator.
(d) The fact that the accuracy of information or validity or meaning of documents was not challenged during the mediation does not preclude challenge in subsequent judicial proceedings or arbitration.
(e) Any communication, whether oral or written which either party shall have with the Mediator or with other parties in connection with the mediation shall be absolutely privileged.
(f) Any notes or records made by the Mediator and / or the parties, shall remain private and confidential and not subject to disclosure in any subsequent judicial proceedings
(g) The Mediator shall not be subpoenaed to give evidence as a witness in any proceedings in respect of a dispute which is the subject matter of the mediation, nor shall he or she voluntarily offer to give such evidence.
The Bureau shall endeavour to resolve a dispute within a maximum period of three months after receipt of reference from the complainant. However this will depend on how soon information required of the parties to the mediation (i.e. the complainant and the Financial Service Provider) can be provided. The sooner the information are given, the sooner the mediation proceeding can be held and the dispute can be settled or decision can be made.
Advantages of Mediation as Alternative Dispute Resolution
- The Mediation service is provided free-of-charge to the complainant.
- This service is available to all consumers, irrespective of their positions, status or location, who have complaints, disputes or claims, subject to the specified limits, against our Financial Service Providers.
- The Mediation process including decision is confidential to the parties involved.
- The Mediator is independent in carrying out his or her duties.
- Avoids lengthy and costly litigation process.
- Complainant is not bound by the Mediator's decision and is free to proceed with the litigation process.
- Mediator's decision is binding on the Financial Service Provider institution concerned.
- It is a fast, convenient and efficient way to resolve complaints against the Financial Service Provider institutions.
Role of Mediator
- The Mediator may act as a Counsellor, Conciliator, Investigator and Adjudicator in order to resolve the complaint made against the Financial Service Provider institutions.
- The Mediator may reject the complaint or make a monetary award which should be within the scope of FMB, which will be binding on the Financial Service Provider institution.
- The Mediator is independent in his or her decision on the complaint.
- In the event questions or issues concerning a Syariah matter arises during the mediation process, the Mediator will refer that matter or issue to the Syariah Advisory Council at Bank Negara Malaysia (this advisory council was established pursuant to Section 51 of the Central Bank Act 1990) for advice before the Mediator makes a decision