Mediation: the 85% 90% problem

There is a lot of huffing and puffing on both sides of the mediation debate and, as with all human argument, a tendency to talk past each other rather than engage directly with the real problems. A piece in the Barrister magazine is refreshingly thoughtfully argued, with a particular and interesting focus on the nuances of the debate around compelling mediation. It is well worth a read. I remain, however, to be persuaded by the arguments in favour of compulsion, even on the basis put here. Let me try and explain why.

Professor Mackie and Mr Allen make three crucial observations about the merits of mediation and settlement.

  • “Roughly 90% of civil claims settle.”
  • “Mediation produces consensual outcomes in about 85% of cases, often beyond what courts can order, and on terms which are reflective of the risks attendant on trial.”
  • “So settlement is the norm, and in our view those settlements could frequently be achieved much sooner and at less cost.”

Let us assume that the first two bullet points are correct. On the face of it, this is suggesting that mediation is less successful in terms of reaching actual resolution than settlement but that the actual outcomes may be better. The research that I have read tends not to support that agreements go beyond what the courts could order but a) I have not read all the research and b) I am prepared to believe that mediation can lead to better outcomes. It may also be the case that even where mediation does not resolve the dispute, it may smooth the process later. What I think that these first two claims show, though, is that in broad terms mediation is at best similar to or marginally better than settlement in terms of outcomes and only if we accept the more flexible outcomes point.

The key issue is really the third bullet point. Here I have more considerable doubt at least for certain types of case. In particular, the vast majority of personal injury cases are disputes over small amounts of compensation (£3,000 or less). The costs expended on such cases can be disproportionate but mediation has to be pretty cheap and quick if compelling it is to be cost effective. Similarly, in a routine road traffic accident (which the vast majority of these cases are) one has to be pretty imaginative to think of creative outcomes which add significant (rather than some) value to the process, or maybe the mediators simply have to be more imaginative than me. Civil justice reform is prone to the well-intentioned tendency to add in a process in the hope that it would reduce costs only to find it increases cost. If compulsory mediation is seriously to be considered for small personal injury cases, we need to have a much better idea of the following: how much will a workable system of mediation cost per case; how early can that be sensibly compelled; and how much can we plausibly expect (rather than hope) it reduces the time and cost associated with the current scheme. An 85% success rate does not inspire confidence that any costs will be saved when it is compared against a 90% success rate for settlement.  It is not an impossible argument, but it is a harder argument than is suggested by saying settlements could frequently be cheaper and quicker.  The key questions are: how frequently, how much cheaper?  Compulsory mediation creates winners and losers in costs terms: the wins have to be bigger than the losses

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