Twenty years on since the Woolf Reforms, Dominic Carman assesses mediation’s slow but steady march to the disputes mainstream
Mediation is big business. That much is evident from the 2018 Mediation Audit published biennially by the Centre for Effective Dispute Resolution (CEDR). It confirms that there were 12,000 mediations – up by 20% in two years and double the number in 2010 – involving £11.5bn in aggregate dispute value. Of these, 7,500 were ad hoc referrals while 4,500 originated from organised mediation schemes, such as NHS Resolution and the Court of Appeal scheme.
‘The mediation process has achieved complete credibility – growth in credibility always precedes growth in numbers,’ argues Bill Marsh at Independent Mediators. ‘The complexity and value of cases going to mediation has also increased immensely. The advantage most commonly mentioned by parties is certainty – they want an outcome, an end to uncertainty so they can get on with their lives and businesses.’
His colleague, Michel Kallipetis QC, adds: ‘There is greater awareness of the advantages of mediation, not only among the legal profession but also the commercial community: it is now an accepted norm in the process of dispute resolution in every type of dispute. The process is also adapted to deal with disputes that would normally never have been the subject of mediation.’ Millennials, he suggests, are ‘especially receptive to it and are more skilled in representing parties’.
At just under £1m in average dispute value, the aggregate settlement rate is 89% with 74% of disputes being settled on the day and a further 15% soon afterwards. CEDR’s latest audit suggests that roughly 200 mediators, half of whom are lawyers, undertake 85% of all non-scheme commercial cases – their number has grown from 145 in 2016, indicating that competition is increasing.
‘It’s rather like the old adage at the Bar: 20% of barristers do 80% of the work,’ says Mark Jackson-Stops, founder of In Place of Strife. ‘Mediation is just the same. There are a handful of people who make a living out of it, and a lot of people who don’t make a living, but aspire to. Then there are others who make a living out of something else, usually the practice of the law, and do a bit of mediating on the side.’
‘One of the advantages of mediation compared to litigation and arbitration is that the parties control the process.’
Mediation has evolved significantly in a relatively short time. ‘Before the Woolf Reforms – The Civil Procedure Rules (CPR) which came into effect in 1999 – mediation was very ad hoc,’ says Eileen Carroll QC, principal mediator and co-founder of CEDR. ‘Whereas now it would be very difficult to find a litigation law firm anywhere in the UK that doesn’t have somebody experienced in mediating. The big firms are mediating all the time, every week.’
Nicholas Pryor at Independent Mediators observes: ‘Mediation has seen a huge change – from being a suspicious new process that no-one knew anything about, and which was authoritatively described as having no place in the English legal system, to one that is now a key constituent, widely understood and practised by many. Mediations have become conspicuously harder as much more complex and difficult disputes have come to be mediated.’
Jackson-Stops develops the point. ‘The Woolf Reforms gave mediation a huge shot in the arm,’ he says. ‘Turning it from very niche into a relatively commonplace part of the litigation process. The CPR have since encouraged it, threatening penalties on those who do not use it. Some people mediate to avoid the penalties, but remarkably, if they engage without feeling there is any great prospect of settlement, they’re surprised to find that they often end up settling the case.’
The prerequisite for mediation, he argues, is that the parties get to a stage ‘where they can pretty well identify the risks of litigation: they need to have gone a certain number of steps down the litigation trail in order to establish strengths and weaknesses and understand the other party’s position as well as their own.’ Kate Jackson at Independent Mediators adds: ‘Many of the skills developed in litigation apply equally in mediation: analysing a new case, understanding what the clients need and being able to have realistic conversations as to the litigation process going forward.’
So what attributes make a good mediator? Carroll summarises them alliteratively: ‘Preparation, proactivity, pragmatism, problem solving, patience and personality.’ Beverly-Ann Rogers, who specialises in Chancery disputes at Serle Court, adds: ‘A genuine curiosity about people, an ability to empathise and to see where negotiations are going.’ Jackson-Stops suggests: ‘The ability to listen rather more than the ability to speak: give people a safe environment to open up, give clues to the opportunities for settlement and allow people to vent their feelings.’
Andrew Paton at Independent Mediators says that one of the advantages of mediation compared to litigation and arbitration is that the parties control the process and the outcome. Carroll adds: ‘The client is always my guiding light: they’re paying for it. You’ve got to build their trust and respect, but to be really effective you need a high level of engagement.’
‘Clients are often more experienced in mediation than litigation. This makes the process more effective and more enjoyable. We have moved from the perception that you only mediate weak cases.’
Kate Jackson, Independent Mediators
Law firms play a critical role in advising clients on mediator appointments. ‘Clients rarely make direct approaches,’ notes Jackson-Stops. ‘In civil and commercial, law firms are generally the gatekeepers for mediations: they make the call, the inquiry, they seek out the mediator and set everything out.’ Rogers says her clients are referred from a diverse range of firms: ‘from City solicitors and private client specialists, such as Farrer & Co and Charles Russell Speechlys, to small firms in and outside London. The clients are in control. It’s a client-centred process: they make the decisions and have a resolution which they take responsibility for and can live with’.
In Chancery commercial, there are very few disputes that do not go through mediation, she adds. ‘Lawyers are mediating earlier, often before issue, which allows the parties to save on cost. As lawyers become more mediation-savvy, they’re having appropriate exchange of information early to facilitate mediation. My rule of thumb is you should be discussing (settlement) figures with the sandwiches. Generally, people are. There used to be a macho attitude: “How late have you mediated?” Clients should not be making important decisions for their lives late at night, nor should lawyers be asked to draft difficult settlement agreements when everybody’s tired.’
Jackson notes that: ‘Clients are often more experienced in mediation than litigation. This makes the process more effective and more enjoyable: you get a sense of working together towards a solution, rather than parties holding themselves apart from the mediator as you would a judge or adjudicator. We have moved from the perception that you only mediate weak cases. People are mediating cases much earlier. Only occasionally have I had a client tell me that they wished they were mediating later. However, in most cases, I am told by one side, and often both, that they had wanted to mediate earlier.’
A common advantage of the mediation process is speed: ‘My shortest was over by lunchtime, and the longest in consecutive days, three,’ says Rogers. ‘The average would be a single day – 9.30am to 6pm,’ says Jackson-Stops. ‘If a case is low value or relatively simple, we sometimes provide a half-day mediation, and at the upper end, a two-day mediation.’
Carroll adds: ‘The mediations I do from preparation to delivery are typically between 30 and 50 hours. You start working intensively from 8:30am and you might finish at midnight, or even two or three in the morning.’
Phillip Howell-Richardson at Independent Mediators notes: ‘The emergence of mediation worldwide has been one of the trends of recent years. The trend will continue with the increasing emergence of truly international mediation in investor and state issues, and multi-jurisdictional commerce with cross-border multi-party cases.’
Carroll has used her experience to co-author International Mediation: Breaking Business Deadlock, covering her work with multinationals in Europe, the US and Asia. She believes that cultural appreciation matters. ‘A Russian client for a professional negligence claim initially discussed why people thought all Russians were mafia,’ she says. ‘But what he really talked about was the schools his children went to: he wanted to anchor his life in London. A valuable aspect of that mediation was allowing him to take the stage and address the prejudice he thought existed which impacted on how the other party saw both the dispute and him.’
Rogers has mediated trust disputes in multiple centres. ‘I mediate under my own agreements: I set the rules,’ she says. ‘Under my standard agreement, any dispute will be settled by courts in England and Wales, but if I’m mediating abroad, the governing jurisdiction may change accordingly. In multi-jurisdictional trust disputes, mediation can end three or four lots of litigation that have been going on for ten years or more.’