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Mediation 2017: Trends & Conclusions

Mediation continues to be increasingly respected as a viable – and cost-effective – form of dispute resolution. it is now recognised as the usual starting point for disputes prior to, or instead of, arbitration and litigation. However, its appeal varies from country to country. In the UK, US and Australia, mediation is making significant strides, while in other jurisdictions it is viewed with slightly more suspicion. Nevertheless, for those who can carve out a niche, it is a practice area that remains robust and growing.

Mediation continues to be seen by business primarily as a cost-cutting device. Indeed, ADR clauses have been adopted by numerous multinationals and several US companies have signed the Conflict Prevention Resolution (CDR) ADR pledge which recognises mediation as “a less expensive, more effective method of resolution than the traditional lawsuit”. While this is an important part of its appeal, mediators in jurisdictions where the practice is more developed are keen to emphasise its ability to solve commercial disputes just as effectively as arbitration and litigation. As one leading English mediator remarked, “The mediation process has established its credibility among all top law firms. The trend now is towards more internationalisation.”

However, the extent to which mediation is accepted and properly used is still very much dependent on jurisdiction. England is home to many leading mediators, and in commercial mediation it is arguably far ahead of some other parts of Europe. Since a substantial proportion of global business is conducted in English, commercial entities desiring mediation will likely pick an English-speaking jurisdiction. CEDR declared in May 2016 that 10,000 commercial mediations had been performed in the previous 12 months in England and Wales – an increase of 5% on the year before. For those operating anywhere outside the Americas and the Asia-Pacific, England will almost certainly be near the top of their list. While Scotland enjoys a healthy mediation scene, growth there is more modest and acceptance of the practice less entrenched.

In Europe, the Mediation Practice Directive has looked to encourage civil and commercial mediation for European disputes as well as to standardise mediation rules across member states. A report in 2014 concluded that, since the directive’s introduction in 2008, while it had been a qualified success, it had “not achieved its objective stated in its Article 1”. This objective was to encourage a balanced relationship between mediation and judicial proceedings. Only 14 per cent of EU countries have over 10,000 mediations per year, while 46 per cent have fewer than 500.

Australia is also a country in which mediation has flourished. Indeed, as one respondent said, “There continues to be more mediators than mediations.” The Australian Centre for International Commercial Arbitration (ACICA) provides advice to firms on which mediation clauses to insert into their contracts, and since 2007 has provided its own set of rules through which to conduct mediations. However, the Australian government, which has in recent times been sympathetic towards mediation, has had a large part to play in making mediation accepted there.

In the US, meanwhile, mediation has recently been trialled in serious criminal cases in Kansas and in 2013 the United States Bankruptcy Court for the District of New Jersey approved a Court-supervised mediation programme, with a view to expanding mediation’s remit beyond civil and family cases.

The changing role of the mediator

The role of mediator, once seen by some as somewhere between a therapist and a nanny, is now recognised as one demanding expertise in the sector or industry in dispute. It also requires patience, resolve and acute problem-solving abilities in order to generate results. Moreover, as the issues involved in mediation become more complex, it is the mediators who must rise to the challenge.

The present market tends to consist of both lawyers-turned-mediators and individuals from other backgrounds who trained as mediators and subsequently became leaders in their field. CEDR reported in May 2016 that for the first time on record there are now more mediators in the UK without a legal background than with. Despite this apparent progress in broadening the range of mediators to choose from, at the highest levels leading mediators are still predominantly former lawyers, leading to a potential problem promoting new talent that has not had the benefit of a distinguished legal career behind it. Indeed, one argument levelled at mediation is that, due to the nature of the practice and businesses always demanding the most qualified practitioners for their mediations, it is extremely difficult for new entrants to make a name for themselves in the market. One respondent told us of the gulf between older, established mediators and those who are younger and looking to carve out their niche. Several leading names we spoke to admitted that there is a gap that needs to be filled if mediation does not want to see its core expertise hollowed out in the next 10 to 20 years.

In a continuously diversifying market, mediators are increasingly focusing on specific commercial areas and specialising – for example, in construction or workplace disputes. Not only does this allow them to become an expert in their specific area, it also demonstrates an awareness of tailoring their services to clients who increasingly want someone who has an in-depth knowledge of the area in which they are mediating. This shows that clients who might have formerly agreed to mediation through gritted teeth increasingly see it as a worthwhile and even important method of resolving commercial disputes.

An international footprint

The indisputable centre of debate around mediation is the annual Global Pound Conference (GPC) series of conferences, begun in Minneapolis in 1976 with the aim of discussing the progress and process of alternative dispute resolution. As a result of forums such as these, mediation benefits – in a similar way to arbitration – from possessing, first and foremost, an international outlook as well as a drive to develop an international transferable blueprint. In pursuit of this goal, the Conference’s 2016 Singapore Report brought together statistical data and the results of a wide-reaching survey in order to attempt to map the future of mediation and how to promote it further.

While the survey results showed that lawyers who instructed mediators were considered the best way of spreading the good word of mediation, many of the mediators we spoke to were also keen to point out the facilitative role governments can play. We were told that “Singapore has had a real push” to promote mediation in the jurisdiction. Korea, conversely, was noted by one of its leading mediators as mediation-averse at best. In Romania, recent legislative entanglements and reluctance from the constitutional court have severely hindered the opportunity for businesses to access mediation.

Expanding networks of mediators are drawing influence from their global reach; the International Mediation Institute and CEDR have worldwide networks that aim to improve the transparency and efficacy of mediation around the world. CEDR, in particular, has worked to promote ADR in over 50 jurisdictions. Meanwhile in the UK, national outfits such as In Place of Strife and Independent Mediators have provided a network for mediators to further their good work and to pool their expertise. Not surprisingly, these mediation networks, both national and international, perform well in our research.

All of this illustrates that mediation is now truly global, but also that there are significant variations across different jurisdictions and regions in its rate of adoption as a preferred method of dispute resolution. Whether there is an opportunity to build an international consensus on the best way to improve mediation worldwide remains to be seen, but the GPC stands out as a lively and effective forum for the practice.

The future of mediation

It is clear from respondents around the world that mediators now enjoy a strong global network that is dedicated to increasing the presence of mediation and improving understanding of the practice. Thanks to a combination of clients looking to avoid paying out dizzying sums during litigation and recognition from commercial entities that its use is not just confined to small-time disputes, the future looks bright for mediation.

Its greatest challenge in coming years will no longer be credibility – though that remains an issue in some jurisdictions – but ensuring that there is a way within the industry to allow up-and-coming mediators to cut their teeth and grow into the next generation of leaders in the field. As mediation has increased around the world, its challenges have become not less complex but more. The pioneers have set a very high bar for those that come next.

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W11 1QQ, UK