Mediation has been on the increase for years. According to recent research the total value of cases mediated in the UK each year is approximately £9 billion[1]. Mediation is used at any time in a dispute – from the first signs to alongside formal proceedings. It has fast become a staple for anyone involved in dispute resolution. The reasons are obvious – the potential for saving time, money, hassle and the salvaging of commercial relationships makes mediation very attractive. Few would disagree that the increased use of mediation is a long term trend, set to continue. The idea of working through a dispute without at least considering mediation is steadily becoming the exception.
The employment sector was an early adopter of mediation, making good use of it in a range of workplace situations. Plus, since April 2014 it has been compulsory (bar in limited cases) for claimants wishing to issue an employment tribunal claim to attempt an ACAS early conciliation; a process similar to mediation. Eighteen months in, there are mixed views on the success of the scheme. However there is no doubt this is part of a momentum to embed mediation procedure and practice into how disputes are routinely dealt with in the UK.
In a wider context, the popularity of mediation continues. The construction and insurance sectors are heavy users and there is also strong activity in financial services. Numerous other sectors make regular use of mediation too – banking, education, energy, hotels, media, property and shipping. This ties in with mediation professionals reporting a full range of commercial disputes heading to mediation, although some have noted a drop off in financial and professional negligence mediations as the effects of the 2008 crash fade.
No doubt some mediation activity stems from the fear of cost sanctions kicking in for an ‘unreasonable refusal to mediate’ in English court actions. There, refusing to mediate in itself is a high risk strategy. But international mediations held in the UK also appear to be growing, in London in particular.
The use of variations of the so-called Med-Arb process (where parties attempt to mediate and proceed to arbitration on issues which are not resolved) or Arb-Med (where an arbitration proceeds to mediation but may revert to arbitration if mediation is not successful) seems to be on the rise too, but these are still relatively unknown and far from common in the UK. These processes raise important logistical and legal questions and potential issues of confidentiality, without prejudice privilege and bias need to be dealt with carefully if entering into them.
This is all against the backdrop of a continuing encouragement of alternative dispute resolution. Summer 2015 was the deadline for EU Member States to implement the Alternative Dispute Resolution (ADR) Directive and parts of the Online Dispute Resolution (ODR) Regulations for consumer disputes; to standardise the level of consumer protection and ADR procedures throughout the EU and to encourage consumers and sellers to engage in ADR as much as possible.
Elsewhere, this year’s Civil Mediation Conference saw the keynote address by the President of the Supreme Court Lord Neuberger, who said that ‘Mediation is particularly attractive at the present time when litigation is becoming ever more expensive and time-consuming, when the law is getting increasingly complex…and when court fees are being increased markedly’. But he did not shy away from naming the disadvantages of mediation too, saying ‘There is a fine balance to be struck between not mediating too early…and not mediating too late (when the amount of costs already incurred may make it much more difficult to settle)’. More controversially he touched on the benefits of compulsory mediation in some cases, but did not go so far as to say that it ought to happen. Most will agree with his overarching view that ‘mediation work is a vital adjunct to litigation’.
The message remains clear; mediation is here to stay That won’t come as a surprise to anyone involved in disputes, particularly in the employment sector, but the steady integration of mediation into the UK’s systems of civil dispute resolution makes it a very interesting area to keep an eye on.
Jane Fender-Allison, Senior Associate, CMS
[1] Source – Sixth CEDR Mediation Audit
