Mediation – A Solution to the Court Crisis

Partly because of the pandemic and perhaps because of years of chronic under-investment, the UK court system is under pressure. Case numbers are rising and the time taken for claims to reach trial is increasing year on year. More use of alternative dispute resolution is seen as a solution, so there is a proposal to make it compulsory in commercial disputes. We will consider the case for this and compare how compulsory mediation has worked in family matters where it has been a feature for nearly 10 years.

Matrimonial disputes and mediation

The advantages of mediation are well-documented. Where successful mediation provides a cheaper, faster, confidential and flexible solution. It can reduce conflict and helps parties communicate. Simply put – what’s not to like? If we need more evidence of how successful mediation can be in matrimonial disputes, the Family Mediation Council suggests that 65% of couples who use mediation reach whole or partial agreements. Is it any wonder that since 2014, it has been a legal requirement to attend an initial Mediation Information and Assessment Meeting (MIAM) before issuing a court application to resolve a family dispute? So, why is there any debate about whether mediation should be compulsory in all litigation?

Sir Andrew McFarlane, the most senior family judge in England and Wales, may have pointed to one reason when he recently said that - too often, couples see the courts as their ‘first port of call’ instead of a ‘last resort.’ They believe they have a ‘legal’ rather than a ‘relationship’ issue. This attitude has meant that the MIAM has become a tick-box exercise.

To work, the parties must see mediation as a process that will help them reach a solution. If this is not done, then any steps to force parties to use mediation will be doomed to failure. The judges have a role ensuring that parties are engaged in the process by making them consider mediation at every stage of proceedings. Judicial powers such as adjourning cases and directing parties to mediation should, but sadly are not used often enough. This is something that will have to change in matrimonial disputes and cannot be allowed to happen in civil cases. In a recent quote from McFarlane, he concluded that “about 20% of the families who come to court to have a dispute about their children resolved would be better served by, at least first, trying to sort it out themselves in other ways.”

Commercial cases and mediation

If the decision for using compulsory mediation is only based on the experiences from the Family Courts, then you might expect that the plan to make it compulsory in commercial cases was doomed. Like in matrimonial disputes, the success rate for mediation is impressive. The latest CEDR Mediation Audit records a settlement rate of 93% for commercial cases in 2020. This was up from 89% in 2018 and 86% in 2016. Again, you might ask “with success rates like that, why is mediation not used in every commercial case?” It will certainly be made compulsory soon for county court small claims. The government has already undertaken a consultation on automatically referring parties in civil disputes of up to £10,000 where they will be given free one-hour mediation session early in the court process. The proposal is for telephone mediation, during which the mediator will speak to each party to identify common ground and broker a deal. Telephone mediation is currently offered on a non-compulsory basis but has only been taken up in 21% of small claims. When used, mediation in these cases has resulted in 55% of them being settled.

The position in higher value fast or multi track claims is different. While there is no compulsion to mediate, there has for years been strong encouragement to do so from the courts. The policy has been to encourage, not mandate, mediation since the introduction of the Civil Procedure Rules in 1999. The pre-action protocols require the parties to consider ADR and the Courts will invite either party to apply for a stay (pause) of proceeding to allow mediation to take place. Judges can (and will) raise the question of whether mediation has been considered and recommend it. Finally, the judges have the power to penalise a party who unreasonable refusals to mediate which can have severe costs consequences.

The parties in higher value cases already appear to be engaging with mediation so the benefits of making it compulsory may be limited. There is also a significant drawback - rules would have to be in place for when mediation occurs, and the timings can be sensitive. If you mediate too soon, the parties may not be ready to settle but leave it too late and you may run up significant costs. Allowing lawyers to continue making this judgment call seems the safest course of action.

Compulsory process?

So, when are we likely to see compulsory mediation? It will certainly remain a feature of matrimonial proceedings, but expect the courts to take a harsher approach with parities that do not visibly engage with it. Because small claims make up about 61% of all civil claims, it is inevitable that these will be subject to compulsory mediation soon. The savings in time and costs to the wider court system would be too tempting for any government to ignore. Finally, in higher value commercial cases there is not yet a compelling reason to make mediation compulsory so here it can be expected that the parties will continue to be “encouraged” but not forced.

Article written by Seamus Ryan