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23 September 2013
The Centre for Effective Dispute Resolution (CEDR) Audit 2007, like the previous audits in 2003 and 2005, provides some useful indications of trends in the mediation market, in particular whether it is increasing or static, how mediators are chosen and, allied to that, the role of service providers.
What may be equally useful is to reflect upon what lies behind the current trends. Why has the commercial mediation market not grown more, why is the trend away from service providers and why is mediation in the hands of the few?
The audit estimates the size of the annual civil and commercial mediation market to be in the region of 3,400-3,700 mediations in 2007 against 2,500-2,700 in 2005. Much of this growth is referable to growth in schemes such as court-annexed schemes and schemes for the resolution of employment disputes and coincides with the development of the National Mediation Helpline.
While the growth in scheme mediations is encouraging, it is a salutary statistic that, during a period of growth in litigation, mediated cases represent only a minute percentage of claims issued. Yet there is a consensus among litigators that only a small proportion of cases reach full trial and court door settlements are a rarity.
It may be that mediation is a victim of its own success. Experience of mediation may have informed and improved bilateral negotiations to make them more effective in achieving resolution.
There is some support for this view. A survey of barristers reveals a commitment to explore settlement and a high awareness of mediation as a settlement tool, but highlights the use of structured settlement negotiations as an alternative means of resolution - in effect a mediation without a mediator.
Anecdotal evidence from mediators that cases are becoming more difficult to resolve also suggests that mediated disputes are those where serious attempts at bilateral negotiation have failed. This may tie in with a reported drop in settlement rates, from 93 per cent to 88 per cent.
The Aussie experience
The position is to be contrasted with that in the state of Queensland, Australia, where mediation has created an almost judge-free zone. A back-log in cases with a three to four-year waiting list for trial dates led to the introduction of compulsory mediation; parties were not given a hearing date until they produced a certificate showing they had attempted mediation. So successful has mediation become that trials are now a rarity.
But too successful a mediation market is not necessarily in the public interest. For example, in Queensland there is no judicial development of quantum in personal injury cases; compensation paid for injuries remains within the exclusive knowledge of the insurance companies and a small number of experienced mediators. One-sided knowledge such as this can operate to the detriment of claimants.
However, the Queensland experience does suggest an opportunity to expand the market was missed by the obstacle to compulsory mediation set up by the much criticised Court of Appeal decision in Halsey v Milton Keynes NHS Trust (2004).
The CEDR audits reveal a consistent trend away from service providers in favour of direct instruction of individual mediators, now commanding just over 60 per cent of non-scheme referrals. This mirrors the experience in Australia, where the mediation market is more mature than that in England and Wales.
Since the key criteria for choice of mediator are professional reputation and recommendation by lawyers in previous cases, it is not surprising that, as the market becomes more mature, users and their advisers are going directly to the mediators of their choice. It is perhaps chastening for mediators that, in the CEDR audit, lawyers placed availability as high as the fourth criterion out of 17, after reputation (split into experience/status and style) and recommendation, for choice of mediator.
When parties decide to mediate, they want to mediate now. Even if they are not under the time pressure created by an imminent court hearing, there may be the constraint of a limited stay of proceedings and thus a temporary respite from the costs escalator. In any event, having made a psychological commitment to seek to mediate their dispute, the parties want and need to seize the moment. Therefore, in contrast to court hearings, mediations are often arranged at short notice.
Coordinating the diaries of clients, solicitors and often counsel on all sides to find a suitable date can provide something of a challenge. On top of that the parties need to agree a mediator or a shortlist of potential mediators and check their availability against that of the parties and their lawyers.
As the role of service providers decreases, individual mediators are responding to the need for fast and effective administration by banding together to take advantage of common facilities.
Former solicitor mediators, notably Brick Court Chambers' Tony Willis and more recently Kings Chambers' Paul Johnson, have transferred to the bar, thus gaining the benefit of chambers administration to support their mediation practices. Similarly, individual mediators Nicholas Pryor, Bill Marsh and Charles Dodson recently joined ranks with Michel Kallipetis QC and his former clerk in chambers-style association Independent Mediators.
At the same time some service providers are seeking to emulate some of the advantages of the individual mediators by offering direct services or maintaining panels at an optimum size - large enough to give diversity and choice and small enough to command an indepth knowledge of its panel members and their diaries.
The mediator pool
It is estimated that there are around 5,000 trained mediators and yet most non-scheme mediations are concentrated in the hands of fewer than 100 mediators. Again, hardly surprising given that mediator choice is governed by reputation and recommendation. The problem for new mediators is the classic catch 22: you cannot attract work without a reputation and you cannot build a reputation without work.
Service providers, particularly those who train mediators and thus have an opportunity to identify the future stars, have hitherto helped to develop the pool of mediators, but that becomes increasingly difficult as their share of the market shrinks.
The growth in schemes has provided a fertile ground for developing new mediators, but that route is being closed as panels reach their optimum sizes and close their books.
As the mediation market matures it is important that the pool of mediators does not become stagnant and it is in the interests of both mediators and users to ensure that fresh talent is encouraged and given an outlet. It is to be hoped that the 2009 audit shows a growth in both mediation and the number of mediators instructed regularly.
Beverly Ann Rogers is a barrister at Serle Court