The value of mediation in resolving commercial disputes

Mediation has now become widely accepted as an effective means of resolving commercial disputes, both amongst the legal profession itself and increasingly amongst clients involved in the litigation process.  The Centre for Effective Dispute Resolution ("CEDR") has recently published its Eighth Mediation Audit (the "Audit"), which pulls together responses from civil and commercial mediators in the United Kingdom on a range of issues from their experience in practice. 

Some 336 responses were received (over 50% of the membership of the Civil Mediation Council) from the Audit, which was open to all civil and commercial mediators in the United Kingdom.  It is encouraging to see that the success rate of mediation remains high, at 89%, with the majority (74%) of mediations settling on the day itself (the other 15% settling shortly thereafter).  This accords with our own experience which has shown mediation to be a highly effective tool in unlocking even the most complex and contentious of disputes.

The value of mediation as a dispute resolution tool cannot be underestimated.  The responses to the Audit, when combined with statistics from CEDR, highlighted some fascinating figures demonstrating the value of mediation in financial terms, including that:

• The total value of mediated cases (excluding the 'mega-cases' which could skew the results) was now around £11.5 billion a year.
• The total value of mediated cases since civil and commercial mediation was introduced in the 1990s is now approximately £110 billion.
• It is estimated that mediation will, this year alone, save businesses around £3 billion in wasted management time, damaged relationships, lost productivity and legal fees.

The growth of mediation has been significant since its entrance into the civil and commercial dispute arena in the 1990s.  Taking the past 15 years alone, the number of cases per annum in England and Wales has risen from just below 2,000 in 2003 to around 12,000 now. 

The responses to the Audit also showed that the average time a mediator is spending on a mediation in total now sits at around 16.3 hours, including preparation, the mediation day and post-mediation work.  Given that the average mediation day is only c.7.4 hours, this demonstrates the significant additional work which mediators are putting in when preparing for the mediation and in helping to try to reach settlement following the mediation day.  This is reassuring to note given that, unsurprisingly, we have found the most effective mediators to be the ones that are the most prepared and have clearly spent a meaningful amount of time reviewing the papers prior to the mediation day. 

Ashfords' Dispute Resolution team has extensive experience of successfully mediating a variety of disputes and of the significant cost savings clients can make as a result.  Please do not hesitate to contact us if you would like further information on the benefits of mediation or further detail as to how the process works in practice.

For more information, please contact Andrew Perkins.