16 May 2016Print This Post

Number of commercial mediations hits 10,000 a year

City of London

CEDR: “a lot of growth potential” in commercial disputes

The number of commercial mediations has grown by over 5% in the past two years to around 10,000 every year, a survey has estimated.

The report by the Centre for Effective Dispute Resolution (CEDR) also found that fees earned by mediators were climbing significantly.

For the first time in the biennial audit, fewer than half the 319 mediators who took part (43%) were lawyers.

CEDR said in the report: “The data suggests that this decline in the proportion of lawyer mediators is attributable to increased engagement of other fields rather than any reduction of interest from the legal profession.

“With each successive audit, the list of respondents’ job titles reveals the increasing professional diversity of the field, with new entrants reflecting areas of progress in mediation applications (e.g. workplace, tax, medical, education).

“There are also signs, particularly amongst more recent entrants to the field, of increased interest in mediation amongst general managers and business people.”

One of the attractions may be fees, with average earnings by experienced mediators for a one-day hearing rising by almost 18% since 2014 to £4,500. For the less experienced, fees rose by 8.6% to £1,545.

CEDR estimated that mediators completing over 50 cases per year earn between £100,000 and £775,000 per annum, with an average of £400,000.

Those undertaking between 20 and 30 mediations fare much worse, earning on average £55,000.

CEDR said the “aggregate settlement rate” at mediations had remained stable at around 86%. However, the amount of time spent on them increased by over two hours since 2014, to 18.6 hours from start to finish, with more than an hour of the extra time being spent on reading briefing materials.

“The average advanced mediator continues to spend three-four hours less on each case than a less experienced individual, with the shortfall being caused by their spending less time in preparation and also less time in post-mediation follow-up.”

CEDR said a “significant proportion of mediator time continued to be unremunerated” – five and a half hours among experienced mediators, compared to only four hours in 2014. Less experienced mediators wrote off six hours.

When asked about growth areas for the future, mediators said commercial disputes “still had a lot of growth potential”, but employment, professional negligence and personal injury were mentioned most frequently.

Graham Massie, director of CEDR, said: “As with other new markets there is a concern that new opportunities attract opportunists, and there is, therefore, an emerging sense of the need to move forward with common minimum standards for training which would at least serve as a barrier to exclude the under-trained venturers.

“We should not, however, lose sight of the need also to raise our game at the top of the profession – there are signs in these audit results that mediations are becoming harder, something which should not be surprising given that lawyers’ negotiation skills are getting better. After all, no-one is going to pay us to push at an open door.”

By Nick Hilborne

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