LCD pledges to cut costs as Govt pushes mediation plan

The Lord Chancellor’s Department (LCD) has given a commitment to the Treasury to cut the number of commercial and civil cases in the UK’s courts by 200,000 by April 2006.

This massive cut-back, partly to reduce litigation costs, means the cases will have to be dealt with by alternative dispute resolution (ADR), most obviously mediation.

David Lammy, the minister for civil justice, has issued the ultimatum to Lord Falconer, the Lord Chancellor, because of pressure from the Treasury to cut court costs in running cases, as well as to reduce the logjam in the courts.

The 200,000 cases equate to 10 per cent of the total number of disputes that annually come before the county courts and the High Court, including the family division. However, of this total of two million cases, only 15 per cent actually go all the way to a full trial.

The LCD has been investigating for eight years the cost benefits in ADR compared to litigation. So far it has drawn no final conclusion. However, an LCD spokesperson said: “In some cases it is better to go to court, but in other areas mediation is better, particularly in the family area.”

But she added: “The policy on mediation is by no means settled.”

Allan Connarty, director of operations at the Chartered Institute of Arbitrators, said: “It is feasible [the 200,000 cases] could be accommodated in a trustworthy manner by the private sector. The question is whether the public buys it. There are inevitably concerns about how far it is safe to go in terms of encouraging mediation.”

The Government faces an uphill struggle if it is to achieve this ambitious reduction in the number of claims reaching trial. It is also taking a big risk.

Many disputes require public litigation. The privacy of mediation and arbitration is attractive in some circumstances, but is wholly unsuitable in others.

The plan also presupposes a willingness on the part of litigants and their lawyers to pursue mediation. Although mediation continues to rise, there is much anecdotal evidence that lawyers have yet to be convinced of its true benefits.

There are also major concerns about transferring the resolution of so many disputes to an unregulated private sector geared up to generating profit as much as delivering justice.

The European Commission is sufficiently worried about this to be drawing up codes of conduct for ADR participants. The International Bar Association has expressed concerns about arbitrators not reporting conflicts of interest. Also, arbitrations, particularly in the maritime sector, are notoriously expensive and can take longer than litigation.

There is nothing wrong with encouraging greater use of mediation – that was, after all the point of the Woolf reforms – but the industry is simply not geared up for such a massive increase.

The plan smacks of an ill-thought out, desperate attempt to cut costs, with scant regard given to the potential damage to our justice system.