In a development that had been long trailed, reflecting issues of court capacity and the broader evolution of the role of ADR under the Civil Procedure Rules, the UK Ministry of Justice announced in July 2023 that mediation is to be compulsory for civil claims valued up to £10,000. This is likely to be just the beginning of an increased prominence of the role of mediation in modern litigation. Whilst there is a debate to be had as to when mediation ought to take place during a dispute, the case for mediating at some stage is compelling.
The role of mediation, as a key feature of modern litigation, was reflected in the Woolf reforms that created the Civil Procedure Rules now more than 20 years ago. At that time mediation remained very much on the edges; few engaged in mediation and there were even fewer mediators. An interpretation, if not the subtext of the overriding objective of the Civil Procedure Rules, is an encouragement to consider the extent of the role of the court and therefore the opportunities to resolve disputes by other means. Mediation has grown in prominence in the past 20 plus years and there has been a developing body of case law with court judgments making clear the severe adverse costs consequences for parties refusing mediation or other form of ADR without good reason. This may be so even when that party has ultimately succeeded (even overwhelmingly) on its claim.
For a great number of parties and indeed for some legal practitioners, mediation remains something of a mystery or a process with preconception and/or misconceptions. It is however often highly effective as reflected in statistics that point to exponential growth in the use of mediation. Research from the Centre for Effective Dispute Resolution (‘CEDR’) reported that the number of mediations conducted increased by 38% from 2018 to 2020 alone. The pandemic saw mediations drop off (perhaps surprisingly given that mediation can take place virtually), but has recovered since and according to CEDR, was 3% up at September 2022 on pre-pandemic levels.
Mediation has a significant appeal as a means of seeking to resolve a dispute. It is confidential where confidentiality is important. The terms of a resolution are for the parties. This cannot be overstated. There is significantly greater (almost unlimited) flexibility as to what may be agreed than what a court or tribunal is able to determine or award. Mediation also provides an opportunity for certainty and an ability to manage risk, where a court or tribunal outcome may be binary. As a non-judicial process at which the mediator facilitates but has no role to make determinations, if mediation fails, the dispute simply moves forward. Used well by parties and by representatives who embrace the process and opportunity mediation brings, mediation is an attractive proposition.
Mandatory mediation of small claims is just the start. Cost capping, fixed costs and the role played by cost budgeting is designed (or if not designed then it has the effect) to apply pressure on the costs and appeal of litigation. Arbitral bodies are also now viewing mediation as an aspect of the tribunal timetable. The ‘internationalism’ of mediation is also increasing. The Singapore Convention, which recognises the enforceability of agreements reached at mediation may serve to expedite the role of mediation in jurisdictions familiar with mediation and those still to embrace it. The Middle East looks set to see a rise in mediation, recognised in the DIAC’s publication of its mediation rules in October 2023.
Mediation timed well and with commitment to the process from the parties is an opportunity. Embrace it.