Mediation to the fore but costs run as high as using the lawyers

Mediation perhaps not all its cracked up to be .. but a little spin can put the edge on things of course !

The Scotsman reports :

Mediation grows as firms see the benefit of finding common ground

IN A mediation a few months back, those involved – some lay people, a growing business and a professional adviser – revealed they had previously spent more than three years in dispute and incurred legal and other costs running well into six figures, an amount that may have significantly outweighed what was at issue between them.

They were deeply frustrated. "If only we could have talked like this two years ago," they said. Fortunately, in just two days of talking, they worked out a solution.

Of course, this is anecdotal evidence, but such tales are not unfamiliar as there is a growing recognition of the benefits of mediation.

Earlier this year, two of England's most senior judges expressed clear views about the value of mediation in civil disputes. There is nothing jurisdictionally specific about the use of mediation as a complement to the court process.

Thus, with Lord Gill's review of the civil court system now well under way in Scotland, the English judges' observations are of relevance and importance to us.

In a speech at the end of March, the Lord Chief Justice, Lord Phillips, said: "Mediation offers many attractions in addition to that of avoiding the cost and trauma of litigation … It is a private and confidential way of resolving a dispute. It is informal. It is voluntary. It is a process that those involved can understand."

He emphasised that parties are in control of what is happening to them, that they can preserve, or restore, good relationships with the other party to the dispute – and that they can come to feel they are partners in a common endeavour rather than antagonists. And, he observed, resolution via mediation can involve a much wider range of remedies than the court can offer.

He commented that litigation has a cost, not only for the litigants but also for society, because judicial resources are limited and their cost is usually borne – at least in part – by the state. He suggested that parties should be encouraged to attempt mediation before litigation, and there should be built into the litigation process a stage at which the court can require them to attempt mediation.

His speech left those who heard it in no doubt about his feelings on mediation – he concluded: "It is madness to incur the considerable expense of litigation – in England usually disproportionate to the amount at stake – without making a determined attempt to reach an amicable settlement."

Nobody has suggested that mediation should be compulsory – or that it would work – in every case, but the cost of litigation for litigants and the public purse has prompted proposals that there should be a mechanism for ensuring that parties try alternatives before litigating.

It is has been suggested that judges should have power to seek to persuade parties into mediation, perhaps with sanctions if they unreasonably refuse to do so. This power is already exercised in England. We await new rules of court in Scotland.

As Sir Anthony Clarke, the Master of the Rolls, speaking at the recent Second Civil Mediation Council conference pointed out: "It is of course a cliché that you can take a horse to water but whether it drinks is another thing entirely. But what can perhaps be said is that a horse, even a very obstinate horse, is more likely to drink if taken to water. We should be doing more to encourage, and perhaps direct, the horse to go to the trough. The more horses approach the trough, the more will drink from it."

Of relevance is a new EU directive, adopted in April, on mediation in civil and commercial matters, which is applicable to cross-border disputes.

The directive gives judges in the European Community – at any stage of the process – the right to suggest the parties attend an information meeting on mediation and, if the judge deems it appropriate, to invite the parties to have recourse to mediation.

The stated purpose of the directive is to facilitate access to dispute resolution and to promote the amicable settlement of disputes by encouraging the use of mediation and by ensuring a sound relationship between mediation and judicial proceedings.

The need for greater education for all concerned was taken up by the Master of the Rolls. "Experience … shows, even now, that far too many people know far too little about mediation," he said. "Alternative dispute resolution in general and mediation in particular, where it is the appropriate ADR mechanism, must become an integral part of our litigation culture."

He pointed out that this would require the education of lawyers, litigants and judges, with the onus on the legal professionals to ensure that litigants appreciate mediation's many benefits – including its informality, its confidentiality, and the possibility it holds of enabling parties to reach a consensual resolution more quickly and at lower cost than in the zero-sum game of litigation.

He also cautioned that it was important to highlight the drawbacks. Although these were few, they may include the fact that, for example, mediation does not produce a court judgment setting out the individual litigant's rights.

The First Minister recently gave his support to mediation in a letter to delegates at the European Mediation Conference in Belfast. He said: "The Scottish Government is a strong supporter of the increased use of alternative forms of dispute resolution, including mediation, and is currently providing funding in a number of areas … raising public awareness of the existence and merits of mediation."

It is said that in Scotland we have been slower to appreciate the benefits of mediation in civil and commercial cases, but recent mediations in Scotland have involved participants from Australia, Denmark, the United States, Turkey and England, just to name a few. Others have taken place in or involved people and businesses from all points across Scotland. Hundreds of lawyers have been involved.

The opportunity now exists to enhance Scotland's reputation as a centre where multi-national and local disputes can be quickly resolved. If we do not, there is a danger of losing more business at a time when retaining and generating more of it is so important to our economy.

The Master of the Rolls' comments about the English judiciary surely apply to decision-makers in Scotland: "What we certainly cannot do is sit back and do nothing. Those days are now long gone."

• John Sturrock is a mediator and founder and principal of Core Solutions Group.