Small group of specialists dominate as mediations move online

Massie: Commercial mediation going from strength to strength

The mediation marketplace is still dominated by a “select” group of around 200 people, according to new research indicating also that most mediations will stay online post-pandemic.

CEDR also reported that the top-earner mediator pulled in £880,000 over the past year at an average fee of more than £10,000.

Its ninth mediation audit – carried out every two years – said that, in the year to March 2020, some 16,500 commercial mediations took place in the UK, an increase of 38% on 2018.

Much of this growth was down to ad hoc referrals of cases, rather than mediation schemes or pathways. Ad hoc mediations now account for 30% of all mediation activity.

Some 361 mediators – around half of the members of the Civil Mediation Council – were polled, while there was also a survey of lawyers who use mediation.

CEDR said around 200 mediators were involved in around 85% of all ad hoc commercial cases, an average of 35-40 cases each.

“The size of this group has not changed since the level reported in 2018 and indeed there are some signs of further consolidation.”

The research found that activity fell 35% over the first six months of the pandemic and would have been more but for a rapid move to online mediation.

The audit found that around 10% of all commercial mediations were being conducted online by a very small group of mediators pre-pandemic; this jumped massively in the first six months of Covid.

The average ‘comfort level’ with mediating online was 6.85 out of 10 for mediators and 6.1 for lawyers.

There were concerns though that online mediation was less effective in “building rapport, reading the room, and generally making connections with individuals”.

Over three-quarters of mediators expected to handle more online rather than face-to-face mediations in 2021. Lawyer respondents put the figure at 65-70%.

CEDR found views “very divided” about whether or not more online mediation would affect settlement rates, although overall the proportion of mediations settling increased from 89% in 2018 to 93% in 2020, with 72% settling on the day and 21% shortly afterwards.

Lawyers and clients were both doing better in mediations, according to mediators, who rated 71% of lawyers as performing quite or very well (up from 63% in 2018) and 70% of clients (up from 61%).

“However, mediators did note that in around half of all cases they observed an over-reliance on advisers and poor negotiation strategy (both small increases from 2018),” CEDR said.

Mediators rated 14% of lawyers and 16% of clients as performing quite or very poorly.

It was a mixed picture on mediators. Lawyers felt there were more mediators performing very well (up from 53% in 2018 to 62%) and also more who were quite or very poor rose (4% to 13%).

Experienced mediators’ fees increased from £3,600 in 2018 to £4,250 per case, but more junior mediators’ fees stayed static at around £1,500.

By combining fee rates with reported activity levels, CEDR projected that mediators undertaking between 20 and 30 cases a year were earning an average of £110,000. It was only £68,000 in 2018, which CEDR said was explained by “a small number of high-fee individuals who appear to have reduced their caseload this year”.

Mediators handling between 30 and 50 mediations a year were earning an average of £268,750, again substantially more than in 2018 for the same reason.

As a result of those high earners conducting fewer cases, the average for those mediating over 50 cases a year actually fell, from £330,000 to £307,000.

“The most successful mediator we surveyed reported average earnings of over £10,000 per case on a workload of around 80 cases, giving an annual income of some £880,000.”

CEDR said it was focusing on improving the diversity of mediators – while the number of female mediators grew significantly from 24% of respondents in 2018 to 41%, the number of non-white mediators remained low at 8% (compared to 17% of all solicitors).

CEDR director Graham Massie, who wrote the report, said: “There is a consistent message coming through in this data, namely that commercial mediation is firmly established in the dispute resolution landscape and continues to grow from strength to strength.”

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