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English Commercial Court enforces obligation to resolve disputes by friendly discussion prior to arbitration
8 July 2014
The Centre for Effective Dispute Resolution's (Cedr) mediation statistics may show that mediation growth was at a virtual standstill last year, but are commentators right to paint a gloomy outlook for mediation?
In short, no. Evidence suggests that, although the mediation market - both users and providers - are taking stock after the rapid development of the past two years, the overall position of mediation is very healthy. What are perhaps missing are the design elements for the next phase of growth - more sophisticated products for a more sophisticated market.
It is important to remember that in the context of falling litigation, the actual market share of cases going to mediation is still increasing.
Since the introduction of the Civil Procedure Reforms in April 1999, there has been a drop of 37 per cent in the number of cases filed in the Queen's Bench Division. However, statistics show that the number of cases referred to mediation by the courts continues to rise. Last year, 27 per cent of mediations conducted by Cedr's dispute resolution and prevention service Cedr Solve were court-referred, compared with 19 per cent the previous year and 8 per cent the year before that.
While judges and lawyers are increasingly recognising the suitability of mediation for cases that come before them, the Government is also encouraging the use of mediation. In March this year, the Lord Chancellor's Department announced that all Government departments would seek to avoid litigation by using mediation and other neutral-assisted dispute resolution procedures wherever possible.
And while this 'top-down' direction to use mediation is increasing, so is the 'bottom-up' demand from business.
The number of mediations referred to Cedr Solve through industry schemes or specific systems set up for individual organisations has increased by 18 per cent in the last year, accounting for 108 mediations in addition to the normal commercial caseload. Too often, mediation is viewed as a narrowly defined product, delivered in a typical format, over a typical period (one or two days) and following a typical structure. There are some lawyers who view the current levelling of mediation numbers as a sign of declining interest in mediation. They are failing to notice that their clients are increasingly embracing the richness and possibilities of the whole mediation approach.
The mediation approach is about understanding why parties get into deadlock, understanding how they can be helped to move on, and creatively applying this understanding to a variety of situations.
Mediation is becoming an important issue across Europe. The European Commission regards it as an increasingly important element in making the single market work.
In October this year, the European Commission's green paper on developing commercial mediation within the EU will be published. The paper follows an extensive exercise carried out by Cedr and four other mediation bodies from France, the Netherlands, Italy and Brussels, researching the state of mediation and other non-litigious dispute resolution procedures in the 15 member states. It will give recommendations for future development.
Similarly, by next summer, the member states of the United Nations Commission on International Trade Law will, in all probability, have voted to adopt a model law of international commercial conciliation, encouraging those countries with no mediation provision to use it as a basis for reform.
Most lawyers have taken the mediation approach on board. No longer worrying that they are doing themselves out of work, they see it as an integral part of their overall offering to clients.
Far from not making its mark, mediation has made a major impact. It will continue to grow as an integral part of the civil justice system and as a mainstream business technique for cutting the cost of conflict. The market may be drawing breath, but it is in readiness for the challenges to come.
Karl Mackie is chief executive of the Centre for Effective Dispute Resolution (Cedr)