Is mandatory mediation the future?

Introduction

It is plain to any legal practitioner that the justice system is overwhelmed. In this modern era, deals are done quickly and technology has created the opportunity for staggering numbers of commercial deals a day. Outside of the commercial world, technological advances mean average citizens are more aware of their rights than ever before. These factors, coupled with growing populations and less funding, are putting the world’s justice systems under strain. As a result, the escalation of legal disputes is not being prevented and it is conceivable that the existing systems even encourage escalation.

This is the case all over the globe. Wait times are growing and legal costs are reaching staggering levels.

A 2010 EU-Funded study found that the time wasted by not using mediation at an average of between 331 and 446 extra days in the EU, with extra legal costs ranging from €12,471 (£10,574.63) to €13,738 (£11,648.97) per case.[1]

The case backlogs around the world produces some shocking statistics. The Guardian reported a backlog in India of 27 million cases in 2016[2]. When we consider the up-to-date figures, this has only got worse with the government website reporting that 31,046,302 (at time of writing) cases were over 1-year-old[3]. The system is clearly failing to address the backlog, even five years after the original reports.

In Nigeria, the average case lifespan is potentially as high as 15 years and appeals are taking as much as 60% of that time[4].

We can find a very similar story in the UK. In 2011, a consultation on the dispute resolution system for small claims concluded that “the system doesn’t work as well as it could to prevent unnecessary escalation”[5]. The report stated that over three quarters of cases settled after allocation but before trial[6], meaning roughly 87,000 cases might have resolved earlier.

In short, around the globe, litigation is growing. As Fisher and Ury put it, “conflict remains […] a growth industry”[7]. Whatever the reasons for this, solutions must be found. The above reveals that the existing situation is unsustainable for most jurisdictions.

Accordingly, mediation usage has also been growing. Many jurisdictions are encouraging, or even mandating, the process. This paper will attempt to consider mediation globally and within England and Wales and consider the merits of making mediation a mandatory process within England and Wales.

Mediation Around the World

As shall be seen, there is a clear move towards the encouragement of mediation across the glove.

At a supranational level, the United Nations have created the Singapore Convention on Mediation[8], which, amongst various aims, will allow parties in member states to apply directly to courts to enforce mediation agreements. Progress in adoption has been good, and we hope that this progress will continue[9].

Similarly, the EU has been steadily encouraging the use of mediation amongst its member states and harmonise enforcement. The European Mediation Directive[10] applies when two parties who are involved in a cross-border dispute agree to settle their dispute using a mediator and member states must make sure mediated agreements can be enforced. The European Commission, in comments on the progress of the Directive, has stated that:

“Mediation can solve problems between businesses, employers and employees, landlords and tenants, or families, so that they can maintain and even strengthen their relationship in a constructive way – a result that cannot always be achieved through court proceedings.”[11] (emphasis added)

Some individual member states have taken this further. In Italy, mediation is compulsory in many instances[12]. If parties fail to mediate where it is mandatory, it will bar the claim from continuing, and the judge will order mediation.

Many jurisdictions, such as Germany, fall short of mandating mediation but encourage mediation through the use of reduced fees where a matter has been settled by mediation. Other countries, such as Sweden and Hong Kong, require parties to give regard to mediation and state that they have considered this.

Two large jurisdictions where mediation is mandated are New York and Australia. It seems undeniable that in both cases; it has been a success.[13]

In 2019, the New York State Unified Court System announced its new presumptive ADR program that effectively brought mandatory mediation to the jurisdiction. This began with a broad range of civil cases. In the accompanying press release, they stated:

“ADR, especially mediation, helps the parties to understand each other’s positions and interests, and consider options apart from conventional litigation to resolve their dispute, typically leading to more satisfying outcomes.”[14] (emphasis added)

In Australia, the jurisdiction has seen a significant cultural shift in favour of ADR and compulsory mediation is now common. In 2000, the Supreme Court of New South Wales was given the power to order mediation, with or without the consent of the parties, and this is now the case in all state and federal jurisdictions. As we shall see below, the Australian courts have reported some very insightful statistics.

Mediation in England and Wales

The crucial Jackson report in 2009 concluded that mediation was a “highly efficacious means of achieving a satisfactory resolution of many disputes”, but that what was needed was a “culture change not rule change.” The Jackson report went further stating that, “parties should never be compelled to mediate.”

This conclusion remains at the heart of the English legal attitude to mediation. The Civil Procedure Rules[15] contain a duty to consider ADR before and after commencing litigation, and ADR is now a part of all pre-action protocols. Directions Questionnaires in civil claims emphasis the availableness of ADR and encourage the parties to use mediation and there is a duty of legal representative to consider mediation in many areas of law.

Crucially, the court can consider a party’s unreasonable refusal of ADR in determining a costs order.[16]

We find a similar approach in the family courts where parties must, before they can litigate, attend a Mediation Information and Assessment Meeting (MIAM). However, this is not a mediation itself, but information about mediation, to encourage it.

We can therefore summarise the English position on mediation as follows; the court cannot compel mediation but does have the power to encourage. Some authors have criticised this as being unreasonable, as mediation is not suitable for all cases[17] and it is likely to increase satellite litigation[18].

Whilst the UK has developed this mediation emphasis rather rapidly, the Civil Justice Council stopped short of recommending mandatory mediation, the reasons for which will be examined below[19].

Accordingly, it is clear that the UK still falls behind other jurisdictions in its willingness to commit to a presumption of ADR, such as by automatic and compulsory referral.

The Case Against Mandatory Mediation

The obvious argument against mandatory mediation is that it is an oxymoron. Mediation must surely be voluntary. A formal, mandatory process undermines the raison d’être of mediation.

If mediation is mandatory it arguable that this can prevent earlier settlement attempts[20]. The Civil Justice Council, in the context of MIAMs, stated “it is frequently much too early in a civil case to take a firm decision or even take a provisional view about the usefulness of mediation when proceedings have not yet been issued or are at a very early stage.”[21]

Intermingled with this lies questions about access to justice. The Law Society warned the Civil Justice Council that it should continue to steer clear of mandatory ADR, saying it would “frustrate the principle…” that litigants should have open access to the courts[22]. There is a concern that many litigants will not respond well to being compelled to mediation and that this will deprive them of their ‘day in court’.

This is supported by the ultimately doomed, Automatic Referral to Mediation (ARM) pilot scheme that ran in 2004/2005 in England. The experiment randomly referred 100 cases each month to mediation. The results were that only 22 percent had a mediation appointment and in 81 per cent of cases at least one party objected to the case being mediated.

In short, the Civil Justice Council listed the principal arguments against mandatory mediation as being[23]:

1. It taints the voluntary ethos
2. The cost may be disproportionate in smaller claims
3. Compulsion means any claim, however worthless, will involve expense and hassle
4. It may cause a box-ticking exercise, with no good faith on the part of parties
5. There remain Article 6 (Right to a Fair Trial) issues in relation to access to the court system

Whilst these points remain good ones, they may not be insurmountable hurdles. At least, it does not necessarily mean that mandatory mediation cannot work.

The Case for Mandatory Mediation

It was mentioned above that mandatory mediation has been a success in many jurisdictions. Let us briefly consider some statistics to support that statement.

In Australia, statistics have shown a strong settlement rate for matters referred to mediation, 72% of matters were resolved prior to trial by court-referred mediation in the Federal Circuit Court of Australia[24] and where they were not resolved pre-proceedings, many more settle before the conduct of the trial.

When the Supreme Court of New South Wales was given the power to order mediation, the then Chief Justice stated:

“It appears that, perhaps as a matter of tactics, neither the parties nor the legal representatives in a hard-fought dispute are willing to suggest mediation or even to indicate that they are prepared to contemplate it. No doubt this could be seen as a sign of weakness. Nevertheless, the parties are content to take part in the mediation conference if directed to do so by a judge. There is a category of disputants who are reluctant starters, but who become willing participants. It is to that category that the new power is directed[25]”.

Certainly, it appears that mandatory mediation has a strong record of pre-proceedings settlement rates, despite concerns about its mandated nature. The statistics support the theory that parties that may be against mediation may soften that position when forced through the process. A skilled mediator will help focus the minds of the parties on their interests and where parties had previously dismissed mediation as a ‘waste of time’, compelling the mediation can force them to look at it again with open eyes.

Even where settlement was not reached pre-proceedings, mediation will usually narrow the issues between the parties and perhaps act as a catalyst for a later settlement. It is therefore not as simple as considering pre-proceeding settlement rates.

In sum, it is not surprising that mediation works, but perhaps it is surprising that the removal of the voluntary element continues to produce excellent results in recent studies.

Conclusions

To summarise, a strong criticism of mandatory mediation is the aforementioned issue of ‘access to justice’ and the seemingly oxymoronic nature of the concept.

However, when one considers the backlogs and escalating costs examined at the onset of this paper, can one truly conclude that the justice systems globally currently provide adequate access to justice? Seemingly not and on that basis, can alternative dispute resolution truly be less access to justice?

As to the effectiveness, the statistics and history set out above show that there is differing evidence as to the effectiveness of compulsory mediation schemes versus schemes which are voluntary. Comparisons between legal systems and even differing areas of law in the same jurisdiction are difficult to make. The willingness of a father to mediate over child access differs somewhat from a litigious corporation willing to enforce contractual rights. These two examples are worlds apart, as are their unique cases.

However, the effectiveness of mediation overall is indisputable. Simply put, mediation works in a significant number of cases and is an obvious solution to reduce the burden on the court systems set out in the opening to this paper.

In fact, attitudes towards mediation (and other forms of ADR) are apparently changing. Whilst it is acknowledged that the English trials in 2004/5 were a failure, and likely influenced the conclusions reached in the Jackson reports, one cannot help but wonder if this trial would have the same outcome now, almost twenty years later. The cost of litigation is continuing to rise and the layperson’s familiarity and comfort with ADR is growing. The successes shown in New York and Australia present evidence that the mandatory nature of mediation has not substantially affected its effectiveness.

Similarly, one must consider the legal professionals. Litigants are, inevitably, guided by the views of their lawyers. Arguably, 20 years ago, ADR was an unknown quantity to many legal professionals. The cynical observer may take the view that litigators at the time were worried about the impact on their bottom line if mediation became mandatory. Ironically, that specific worry surely shows that litigators believe that mediation can be very successful at reducing court litigation. If mediation were unsuccessful at resolving disputes, there would be little reduction in matters proceeding to trial, and little impact on the costs.

As time has moved on, mediation has proven its worth to many litigators in England and Wales, albeit as a voluntary process. This author believes one would be hard pressed to find a litigator that does not have a story about successful meditation.

It has been some 17 years since the ARM, 12 years since the Jackson reforms and 3 years since the Civil Justice Council’s recommendations. Each of these points has shown more and more encouragement towards mediation. As backlogs continue to grow, costs continue to escalate and attitudes warm to ADR, is it unreasonable to consider that the next large consultation on this topic may well recommend mandatory mediation for some cases in England and Wales?

In this author’s humble opinion, the global trends show a clear sign towards further encouragement of mediation in England and Wales. Mediation generally is clearly the future. However, whilst the concept of mandatory mediation has significant hurdles to overcome current economic pressures may hasten a move to a mandatory mediation model. As a result, this author asserts that it is likely that there will continue to be further moves toward