Mediation market grows as Labour cries Woolf
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RED Alert — spring 2014: severe costs consequences for failure to mediate: when silence is not golden
10 April 2014
With the Woolf reforms coming into force next Monday, mediation is set to take centre stage.
Over the past three years, pilot schemes have been put into action all over the country, and training seminars have been taking place in abundance. Now, lawyers are realising the business opportunities mediation provides.
In January, seven of the country's top commercial mediators launched the Panel of Independent Mediators (PIM). It was a half-way step, but significant all the same. The panel was purposefully loose, with nothing more than a title holding the seven together, and it was mostly a marketing tactic.
But Tony Willis, a co-founder of the Centre for Dispute Resolution (CEDR) and now of PIM, made it clear that new ground was being broken: "We're not trying to cut out CEDR, but the time has come for us to be seen as providers in our own right."
Organisations such as the ADR Group, the UK College of Family Mediators and CEDR, have been the fulcrum of the fledgling industry - training, disciplining and referring work out among accredited members. But with the arrival of Woolf, the chicks are being motivated to leave the nest.
Last week, The Lawyer revealed that Littleton Chambers is to launch a limited liability mediation company offering the services of skilled mediators. They are set to be CEDR's first head-to-head commercial competitor, but they won't be the last. CEDR director Charles Dodson responded to the news by speaking about expanding the Alternative Dispute Resolution (ADR) market and the inevitability of competition.
The market is growing because the Government wants it to. Mediation has become a cause celebre of the Labour government. It is quick, it is cheap, the Americans are already doing it and trials suggest it might just work.
As everyone knows, 26 April is the day. Under the Woolf pre-action protocols and the new civil procedure rules, mediation is to be "encouraged" and "facilitated" by the judge. They have the power to stay proceedings and to urge lawyers into ADR. They can also refuse costs to lawyers who do not consider it seriously.
Coincidentally, the Legal Aid Board extends its network of mediation providers to nearly every major town in England and Wales on the same day.
The temptation is to think that when lawyers wake up on 26 April the world will have changed. But for all the modernising allure of mediation, old heads are talking about evolution rather than revolution.
PIM member David Shapiro says mediation will "increase substantially, but you are not going to have a revolution. It will undoubtedly evolve as more and more judges, masters and district judges find out more about mediation. But it's not going to be a massive thing overnight".
What has been happening, and will continue, is that ADR trainers are doggedly trying to add consensus problem-solving to the litigators' list of skills.
"Now that they see this coming down the road with Woolf," continues Shapiro, "firms are training their litigators. I'm training every litigator at SJ Berwin to be a problem-solver and deal-maker."
A lot of lawyers have already faced up to the law's "third way". ADR has been urged in the Commercial Court for over two years. "The sea-change has already taken place," says Philip Naughton QC, another PIM member.
Other civil litigators have been less enthusiastic. "The lawyers have been fighting it since it started," says Shapiro. "Mediation is only going to work if the judges really put their arm around a case. The more hands-on the judge is, the more mediation will succeed."
Demand is growing and is only going to speed up in the next year or two. As those meeting that demand will have to learn as they go, some rough edges are to be ex-pected. Shapiro says: "I tell my students, I can't teach you to be a mediator in the classroom." So when the pressure comes on, will mediators be ready?
The answer is probably. But a formal structure is not yet in place and there is strong debate about what shape it should take. For nearly two years, up to 20 mediation organisations representing different sectors have been coming together under the banner of the Joint Mediation Forum (JMF) to try and smooth the way ahead. At last, agreement seems imminent. Those involved are careful not to give too much away, but they hint that trying to commit all the groups to one code of conduct and one standard of training has been fraught.
"And somewhat painful," says Frances Maynard, an assistant director of CEDR. "If one group realises that what we are talking about are standards they don't yet meet, this means major changes back at the ranch to make sure we go on together.
"We have managed to arrive at an agreed code of conduct which we believe all the mediation providers and trainers can adhere to. We have got in draft form standards for service providers and also for training and assessment. They're in the final stages of consultation.
"We have also moved a long way along the road of looking at what sort of over-arching body there could be that could oversee the maintenance of set standards and could be the kite-marker, if you like."
Maynard says the organisation will be called something like the Mediation Council, have three representatives from each field and "do everything except have a regulatory function". Member organisations will also be required to have their own disciplinary code.
Maynard hopes the structure will be in place by the autumn. That is months after the Woolf reforms come in but, she says, the huge expansion in the last 18 months has stretched everybody's resources and slowed progress.
"I think a lot of people will breathe easier if they [regulations] come in as soon as possible. It gives a sense of shape and structure to something that at the moment has been growing brilliantly but organically. It needs some lines drawn, I think."
Some want more than just lines drawn. Family mediators work under the Family Law Act, says the Legal Aid Board's Sarah White, which means every one of the 700 soon to be receiving legal aid, is thoroughly assessed.
In a recent speech, UK College of Family Mediators CEO Liz Walsh insisted her body needed statutory powers. "Self-regulation is fine up to a point, but that point is approaching," she says. "The UK College has the regulatory framework. What it does not have is the teeth to enforce it."
She criticised the Government's lack of action as "regrettable and certainly not in the public interest".
While Walsh refuses to extend her point to the JMF, the same principles can apply. Others warn of over-regulating, however. Shapiro says: "My own view is that I've little faith in the adoption of minimum standards because they're keyed to the minimum. The market will do its own self-regulation."
Naughton says any regulation needs to be flexible and points out that arbitration has existed unregulated for 300 years. He was once consulted on a boundary dispute over three inches of land. He thought the case a waste of the court's time and advised some basic ADR. Six months later he bumped into the solicitor, who said the case had gone to mediation. "Who was the mediator?" Naughton asked. "The vicar," the solicitor replied.
Maynard is in favour of regulation "from the inside", rather than edict by government, but says the public must be protected from imitators. She points to the counselling industry as an example of how rogue traders can taint trained professionals.
Naughton says lawyers will be the main appointers of mediators and hence the main gatekeepers of quality. "It's up to them to stick to professional operators.
"But it hasn't been a problem to date... and hasn't been a problem in Australia, where the courts have had much more extensive powers for some years now."
It seems inevitable that mediation will keep on rolling, but the extent of growth now depends on those harshest of critics - the judiciary - and how eagerly they embrace their new options.
"None of us," says Naughton, "knows how enthusiastic the judges are going to be."