Organised schemes are driving the 20% rise in mediations undertaken in England and Wales over the past year, according to the Centre for Effective Dispute Resolution (CEDR).
CEDR estimated that £11.5bn worth of commercial claims were mediated in the past year and that saved £3bn in wasted management time, damaged relationships, lost productivity and legal fees.
The eighth CEDR mediation audit – which is carried out every two years – received responses from 336 mediators.
On the basis of their reported caseloads, the centre estimated that the current size of the civil and commercial mediation market was around 12,000 cases, 20% more than in 2016.
This suggested “there has been an acceleration of growth after what had seemed to be a slowing down two years ago”.
But with the “ad hoc market” increasing modestly, it was organised mediation schemes – such as those supported by NHS Resolution, leading employers and the Court of Appeal and other courts – where the real growth was happening.
“This area of activity has grown by 45% in just the past two years, and now accounts for some 4,500 cases, or 37.5% of all mediation activity.”
Away from the schemes, however, CEDR found that the market remained dominated by a select few, with a group of around 200 individuals involved in around 85% of all non-scheme commercial cases – an average of 35-40 cases each.
“The size of this group has, however, grown markedly from the 145 reported in 2016, suggesting that more competition is finally developing.”
The overall success rate of mediation remained very high, with an aggregate settlement rate of 89%, up from 86% in 2016.
Mediators were spending on average about 16 and a half hours on each case – with the mediation itself taking a day – but the report said there were “some signs from more established mediators that the traditional one-day model of mediation is now being supplemented by more flexible sessional models of engagement in more complex cases as well as in deal-making as opposed to dispute resolution contexts”.
CEDR said the changing shape of the marketplace was having an impact on average fees for more experienced mediators, where fees have dropped 19% to £3,627, which it said was explained by “more entrants graduating into the experienced group and diluting the average”.
Those undertaking between 20 and 30 mediations a year were earning an average of £68,000, compared to £175,000 for those undertaking between 30 and 50 mediations, £330,000 for those doing more than 50. One mediator earnt £780,000.
Looking at trends in mediation, 25% of all comments referred to an increasing resistance to joint meetings at the start of a mediation day.
“This resistance appears to be largely driven by lawyers, who argue that no purpose is served by such meetings given that the parties are already familiar with each other’s cases – a view which the majority of mediators do not appear to accept.
“Yet a number of mediators report seeing an increase in joint meetings between lawyers and/or clients later on in the course of the mediation.”
Graham Massie, director of CEDR, said: “One definition of disruptive innovation is: ‘An innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances.’
“As the results of this audit demonstrate, mediation qualifies under virtually every aspect of the definition – the only point it hasn’t hit is ‘displacing established market-leading firms’, but that is because it has over-achieved by changing law firms and lawyers’ behaviours and attitudes.
“The vast majority have espoused the mediation approach as part of their professional skillset, and not only do a high proportion of lawyers perform very well in mediations, but many have become very successful mediators in their own right.”