With the increasing frustrations experienced with the courts and litigation in general, and of course in view of rule 41A, we should all be giving mediation serious consideration in every matter that we deal with. Not only is this bound to serve the best interest of your clients, but it will eventually have a positive effect on the case load that’s currently crippling our courts.
Globally mediation has enjoyed popularity and favourable results for many decades. Have a look at these interesting findings from international research reports:
In 1996 the US Department of Justice published the results of a study of 449 cases administered by four major providers of alternative dispute resolution services. The study revealed that mediation was capable of settling 78 percent of cases. It found “Mediation cost far less than arbitration, took less time, and was regarded by participants as a more satisfactory process than arbitration.”
In March 2013 the World Intellectual Property Organisation’s Arbitration and Mediation Centre published the results of its international survey of 393 respondents from 62 countries (Europe, North America, Asia, South America, Oceania, the Caribbean, Central America and Africa). They found this with regard to time and costs of the different processes:
“Respondents indicated that they spent more time and incurred significantly higher costs in court litigation than in arbitration and mediation. Respondents estimated that court litigation in their home jurisdiction took on average approximately 3 years and court litigation in another jurisdiction took on average 3.5 years. Respondents estimated that legal costs incurred in court litigation in their home jurisdiction amounted on average to USD 475,000, and legal costs of court litigation in another jurisdiction amounted to slightly over USD 850,000. Respondents indicated that mediation took on average 8 months, and 91% of Respondents stated that costs of mediation typically did not exceed USD 100,000. Respondents indicated that arbitration took on average slightly more than 1 year and cost on average slightly over USD 400,000.”
Based on this data, mediation has a high probability of success and will require less than a third of the resources!
Mediation is a good option to consider, even if litigation has commenced or has made significant progress – in fact, the pleadings that have been exchanged will benefit the mediation process; and it’s preferred for the attorneys to remain involved in the process and assist the clients. To avoid the final stages of litigation by referring the matter to mediation, the clients could still have a saving on resources. This is illustrated by the low break-even point required for mediation to have a positive effect – as found in the report by the European Parliament in 2011:
“According to our calculations, the EU break-even point for time is 19% mediation success rate, and the break-even point for costs is 24%. Additionally, it is important to note that the study found the average cost to litigate in the European Union is €10.449 while the average cost to mediate is €2.497. Therefore, when mediation is successful, European citizens can save over €7500 per dispute.”
However, it hasn’t been plain sailing for mediation. The European Parliament report notes this:
“There is currently a mediation paradox across many EU jurisdictions. There is a well-documented high success rate in specific cases where the disputants engaged in mediation, but these successes are extremely limited in number. The paradox is that while the use of mediation yields highly successful results, mediation is rarely used in a systematic way by disputants and lawyers.”
The global trend is towards an increased use of mediation as the preferred method to resolve disputes. Rule 41A supports this trend and we should encourage our clients not to be left behind in the archaic litigation system without trying mediation first.