The Second European Mediation Congress

The Second European Mediation Congress Mediator audit

Graham Massie, Chief Operating Officer, CEDR:

The 7th November is the anniversary of a press conference which took place in California in 1962 after the governorship election. The man who lost on that day announced it would be his last ever press conference. His parting words were, well you won’t have Dick Nixon to kick around anymore. Today is also the anniversary of the day in 1972 when the same Richard Nixon was elected as President for his second term. Of course, he was kicked around a little bit more, and out a couple of years later. And on the up escalator, on this day in 2000, Hilary Rodham Clinton became the first First Lady ever to be elected to the United States Congress. Today also marks the 25th anniversary of the death of Steve McQueen, the world premier of the film It’s a Mad, Mad, Mad, Mad World in 1963, the radio show Buck Rogers in the 25th Century, 1932. The 7th November is also the birthday of Leon Trotsky, Billy Graham, Joni Mitchell, the blond one from Peter, Paul and Mary. Oh, and Rio Ferdinand, another icon of our time. It really is amazing how much you can dig up with a little bit of googling, a quick half an hour on a Saturday afternoon. What you won’t find, even if you google for rather longer, is any significant information about the present state of the commercial mediation market place in the UK. I have to say that struck me as quite surprising. This past year has seen the 15th birthday of both CEDR, the ADR group, two leading bodies within the field. This is CEDR’s eighth major conference. But still, not a vast amount of information about who we are, what we do, where we think we’re going.

Now, mediation is really about looking forward to identifying the interests rather than looking backwards. So I’ve tried to adopt a similar philosophy in the audit. The general theme of today’s congress is to look forward to identify and confront the issues which our profession faces, to identify the steps which are necessary to take the next leap forward. But you can’t leap forward unless you’ve got a place to stand. Archimedes: give me a place to stand and leave me long enough and I will move the world. I think we believe that the mediation message constitutes the lever, but where is it that we now stand?

1 The Second European Mediation Congress Mediator audit

So that’s what the audits were designed to do, to work out where the mediation profession was right now. We conducted a series of online surveys, of mediators, corporate clients and their advisers about the issues in the field. Today I’m going to take you through some of the key findings from the mediator audit which is being published today. I’ve also got a previews for you from the findings of the business dispute survey, which we undertook in partnership with CMS Cameron McKenna, and I’ve also got a couple of highlights from the lawyer’s survey.

I should come clean at this point and admit that we actually did have a fourth survey of local government lawyers and I can exclusively reveal to you the key finding from that survey, which is that local government lawyers do not like filling in online surveys. So we are, as they say, pursuing an alternative strategy with that constituency.

Nevertheless, we do have three surveys, about 1,200 respondents in all, so we believe this makes this the largest ever audit that’s been undertaken into attitudes and usage of commercial mediation within the UK.

So, if we start with what the mediators told us, there’s a button which I’m told if I press, something will happen. Wow. Firstly, we have 416 visitors to the survey, the majority of whom thankfully answered most of the questions we asked them. Now the first thing to say is that’s a significantly larger number than a similar exercise we did in 2003 when there was only 281 visitors. So we’re up at least in terms of level of interest in response to the survey.

These people are quite a representative cross section of the mediation community. We asked people about their level of experience as mediators, about 45% described themselves as reasonably or very experienced as lead mediators. So I’m calling them the advanced group. 25%, an intermediate group, had at least some experience as lead mediators. About 30% are what I

2 The Second European Mediation Congress Mediator audit call novices. They’d been accredited but so far have no or very limited experience as a lead mediator. Now, those percentage breakdowns are very similar to the profile which we saw two years ago.

So, having established these three groups, we then went onto look at how many mediations everybody was actually doing. Now, as you would expect, it’s the advanced group who are the busiest. It’s fair to say that most of the intermediate group were undertaking no more than three or four mediations a year each. But when we looked at the advanced group, we had a pretty wide scope of activity. So we’ve still got 51 people only doing between one and four, but at the top end, there’s 65 mediators who are doing more than ten mediations a year, that’s about 35% of all the advanced mediators.

Now, what’s interesting is when you compare the answers of this question with another question we asked. We asked people what they regarded as their main job. 44 people in our survey describe themselves as full time mediators, a figure incidentally which is well up on the 13 that we encountered two years ago but when we look at that activity table, it’s difficult to work out where those 44 people are. You see there’s not even 25 people who are doing more than 30 mediations, in fact there’s 23 doing 30 or more, so maybe people have different interpretations of full time. But either way, you see what the numbers are.

Now, let’s have a little bit further look at exactly who these people are. The first thing to say is that they are mainly lawyers, 50% of all of our respondents were lawyers. Solicitors outnumbered barristers about four to one, and they are mainly men. Only 17% of all of our respondents were women, and when you look at the advanced group, female representation was down to one in eight. In contrast, the Law Society’s solicitor’s roll, I think, has 42% women. Why is it that female participation in the mediation profession, particularly at the top end, is so low? I’m afraid the survey doesn’t answer that question, but it does suggest it to you as a finding.

Is there also a gender difference in the age profiles? The average woman mediator is 47, the average man is 52. Both of those two figures are about five years older than the average law firm partner. There are not a lot of mediators aged under 40. But those that are seem to be progressing very quickly. In the advanced mediator group, the average age is 53, although one in five is over 60. So that’s who they are. Let’s come back, now, to their activities.

We all know there’s been an increase in solicitors going direct to self- employed mediators rather than going through service providers. It’s particularly prevalent amongst the advanced mediator group, over half of whom, yet more than 40% of work from direct referrals. In fact, one third of advanced mediators, that’s about 50 people, now get over 80% of their work directly. That’s the group at the bottom there. What this means is that the split of the overall market between service providers and direct referrals has changed. That’s how we calculated it in 2003. 55/45 in favour of service providers. The split is now the other way. 55/45 in favour of direct referrals. But I do have some good news for the providers and that’s that while their share may be declining, the size of the pie itself is on the up. Two years ago we projected the total mediation market at just under 2,000 cases a year. Based on our survey, we now reckon it’s about 2,700, so it’s gone up 35% in the past two years.

Now, you put all these things together and if I come back to that small group of advanced mediators I mentioned earlier. I talked about 65 people who were doing more than ten mediations a year. I reckon those 65 people are involved in 70% of the entire market, 70% of everything that’s happening. Perhaps even more startling, there are 34 mediators who between them are involved in just over half of all of the cases going on in the market place people out of the 416 who responded to the survey.

Whilst we’re talking about the favoured few, let’s talk money. Some financial information, we asked in the survey how much a mediator would typically expect to get from a one day mediation, ignoring any pro bono work. The intermediate group came up with an average day of just under £1,300, a little under £2,200 for the advanced group. Should say at the upper end, a dozen or so mediators reported figures of over about £4,000. And remember, we asked what is your average, not what is your aspiration or your opening bid. Your average, looking at your entire work portfolio. So what does this mean when we add it all up? Well, if we take the top 30 or so mediators, there’s a dozen or so doing 25 mediations a year, making an average of about £43,000. There’s another dozen with about 40 cases each who are looking at just over £100,000. And the busiest ten, each handling over 50 cases a year are looking at £177,000 a year of income. On average.

Now all of these people reckon they are doing a pretty good job. When we asked them what sort of settlement rates they were achieving, they reported an average settlement rate of 73%. That’s settlement on the day. They also said that another 20% settled shortly after mediation, which is interesting because if you add the two numbers up you get to 93% settlement rate, which I have to say is a bit surprising, given that most of the service providers generally only claim numbers in the low 80s. So I looked at those figures rather more closely to work out what was going on and I think I can spot some wishful thinking, particularly in the after the after the day numbers. It is very clear that people track their on the day settlement rates incredibly diligently. The survey was anonymous so I can’t name names, but I can tell you that there is one mediator out there who knows that his settlement rate is 68.18%.

Now, when you ask them what there, or when I ask you in fact, what their after the day settlement is, those cases which settle soon afterwards, it’s interesting how all these round numbers suddenly start cropping up, 5, 10, 20%. It’s also revealing that 10% of all respondents were honest enough to say, I don’t know. And that surprised me, it seemed to rather beg the question, why

5 The Second European Mediation Congress Mediator audit don’t you know? I appreciate that mediators may be paid for a single day, but don’t people follow up or is there a tendency to just say, well, I did my best, onwards and upwards to the next one. Again, I don’t really know the answer, but the survey clearly invites the question.

I mentioned earlier that I’d also touch on some of our findings about lawyers. Amongst these mediators are lawyers and we asked that group how frequently they represented clients in mediations. And the answer to that is about 10% of the time, that is to say in about 10% of mediations we reckon the parties are represented by lawyers who are themselves accredited mediators. Interesting that figure is down from 15% a couple of years ago. Now, that may be the science of small numbers or it may tell us something about the market. It may tell us, for example, that representation of clients in mediation is being spread around more widely within a firm, and that it’s not just the in-house specialist who may well have been the mediator who’s getting that type of work. Obviously that would be a good thing.

You won’t be surprised to hear, however, that when we asked mediators what were the factors involved in cases that didn’t settle, what were the main reasons why cases didn’t settle, conduct of lawyers was almost, well it was number one, closely followed by unreasonable expectations of clients. The mediators were not particularly clear about exactly what conduct, there was a number of responses along the lines of wrong legal advice, lawyer showing off to client, the rather more exasperated lawyers, exclamation mark, which probably had an emotional content but not much factual information behind it.

But what we also did is we asked mediators to rate people, to rate performances. What percentage of lawyers you have worked with in the past five years fall into these five categories? Performed very well, performed well, performed adequately, performed poorly and performed very poorly. And some very interesting figures emerged. 58% of lawyers were rated as having

6 The Second European Mediation Congress Mediator audit performed well or very well by mediators. 23% were rated adequate and 19% of lawyers were rated poor or very poor.

We also asked mediators to rate client representatives, and as you’ll see the profile is not dissimilar, so there’s about 20% below adequate. Now, is that a good result? Well, I think I might have hoped that the lawyers who after all I can assume would have had rather more training, rather more experience in mediation, I think I would have hoped that they would have been rated rather more highly in this, certainly rather more highly than their clients. Obviously 19% below adequate is something of a concern. But are there enough in the top category? I suspect that certainly most law firms’ marketing departments would like to aspire to a rather higher rating than only one third in the very well slot.

Now, you may say of course that mediators are bound to criticise lawyers, but as I said we also did this survey of lawyers. And we asked lawyers what their view was of their opponents in mediation. Now, what you’ve got here is the column on the left is exactly the same column that I just showed you before. It’s what mediators say about lawyers. The right hand column is now what lawyers say about lawyers. And as you can see they are remarkably consistent. But just so that we make sure that politeness is travelling in both directions, we also asked lawyers what they had to say about mediators. Nothing’s happened. Yes. Assessment by lawyers of mediators’ performance, and as you can see, pretty good results, really. 78% of mediators performing well or very well, 14 % adequate, only 8% were below adequate of whom 2% were poor. So there are obviously a few weaknesses to iron out, but that’s a, that is probably a pretty good set of scores.

So, moving on, we looked more generally at lawyer and client attitudes to mediation. We asked both groups for their views on the effectiveness of mediation including its ability to save costs.

Now, Tim Hardy of CMS Cameron McKenna’s kindly given us a sneak preview of the results of the business dispute survey and I’ve combined these with the results from the lawyers’ survey, so the red is the corporates and the blue is the lawyers. And the first questions asked them about their views on the effectiveness of mediation as a means of resolving disputes and as you see 48% of businesses rated it as much more effective, 31% as slightly more effective. We also asked business and lawyers about the ability of mediation to save time and legal costs as compared to litigation and again high scores from both the business and lawyer constituencies. This is the graph on the time to resolve disputes and again 60% of corporates, in their experience mediation takes much less time to resolve disputes. Lawyers agree with them. And what impact has mediation had on the costs in resolving disputes? Again, much less. So, some good positive support for mediation from mediators, lawyers, business people alike.

So building on from that, therefore, we were interested to gather their views as to the efficiency of the justice system. And in particular whether more cases ought to be directed into mediation and if so by what means. So firstly we asked for their views on whether the system got the balance right between directing parties into mediation or simply trying to persuade them of the benefits of the process. Now, what this slides represents, we asked people to sort of score on a one to ten, or zero to ten scale where five is where the civil justice system is today, ten would be fully mandatory and zero would be fully voluntary.

And you will see that the red, the mediators, are generally in favour of a toughening up of the system, or at least of the system being more directive. Whereas the blue bars, the lawyers, they’re not unhappy with the status quo. 41% of lawyers happy, OK where we are today. We also asked some slightly more detailed questions about the technical measures that might be adopted to bring people into mediation, there are some particularly vivid slides here. Should mediation be made mandatory before issuing legal proceedings? No, is

8 The Second European Mediation Congress Mediator audit the answer from the two surveys. However, note how it is very, very no from the lawyers, 71% no versus only 16% in favour. Whereas only slightly no from the mediators at 46% against 34%. And that sort of pattern continues throughout these questions, which is, as you might expect, the mediators are rather more gung-ho hawkish, hawkish shall we say, than the lawyers. They’re certainly in favour of much more judicial direction, judges directing more parties into cases. They’re also interested in tougher costs actions, supported by the lawyers, but as I said not quite so extremely.

Should there be a mediation scheme in every court in the land? 83% of mediators say yes. Feel slightly less strongly about the idea of an on site mediation adviser every time a court is sitting, but 51% in favour, 15% against. The difference between those two, a surprisingly large number of mediators undecided. The lawyers split evenly on that one, but again with a large percentage undecided.

So, before returning to specifically mediator-related matters, I’d also like to highlight one additional finding from the business disputes survey, may suggest an additional way to increase mediation take up. There’s a briefing note from CMS in your pack which reports a finding from your corporate survey which is that whereas 38% of organisations say they have frequently considered using mediation to resolve a business dispute, less than 18% have done so. Tim Hardy suggests in his note, therefore, there’s still a high degree of reluctance amongst business to use mediators. A concern that’s also highlighted by the finding that only 7% of business have any type of business dispute resolution policy at all. Litigation budgets have been shown to be rising, the survey shows, but there’s still a high degree of management ignorance and resistance to be addressed before mediation can be accepted as part of the mainstream of business thinking.

Now, I think I’ll observe that that is probably a training and awareness raising issue and that’s something of a truism but it provides me with a link back to the next slide which is specifically about mediators’ views on training.

We asked mediators their views on whether they would welcome a single standard of basic professional training as compared to a free market in basic accreditation. That proposition achieved a 62% support, which is interesting, but it’s slightly down from the 71% that the proposition had in 2003.

There was also a slight dip in what is nevertheless strong support for the concept of a single regulatory body for setting and monitoring professional standards of practice and dealing with public complaints against mediators. That was 76% two years ago, it’s now 71%. But still very strongly in favour of there being such a body.

Now the interesting question is the next part when you then ask mediators who should fulfil these roles. Who should fulfil the training standards setting or the profession regulatory roles?

Now, we look at training standards first, that’s the blue columns. CEDR remains the most popular body for setting training standards with 46% support, placing it well ahead of the Civil Mediation Council which came in second place with 19%. So that’s the blue bars on the chart I’m talking about. I’m afraid I’m going to come all Peter Snow at this point, so what that, the swing-o-meter shows there’s been a 7% shift from CEDR to the CMC since 2003.

Now this same 7% swing is also evident in the results of the regulatory body constituency. But in that case in 2003 CEDR had a much smaller majority, so the 7% swing has been sufficient to move the CMC into the leading position, so the CMC now has 26% support for being the professional regulatory and complaints handling body as against 24% support for CEDR. Now, I should

10 The Second European Mediation Congress Mediator audit say that I suspect that the core vote of the CMC is slightly higher than that, since, as you’ll see, there’s about 15% of respondents who have ticked the other box and we asked them to explain what they meant by other and a large number of people described their vision of other as something which I would certainly suggest is not overly dissimilar from the route that the CMC is taking. They talk about consortia of providers regulated by the DCA or chaired by the DCA, or interested major players coming together. Those were the types of language that they used to describe this vision of other. To some extent I think that’s where the CMC is heading, but clearly there seems to be some lack of understanding in the market place as to exactly what the CMC is about and what it’s achieving. So I wonder if there’s a message there for their publicity and PR people.

Now, finally to wrap up this exercise, let’s go back to the purpose of today’s congress. Have a look at where mediators would like to be in five year’s time. Well, you won’t be surprised to hear that 47% of our respondents expect to be mediating more than they are at the moment, although they still wouldn’t see it as a full time occupation. But there’s another 34% who expect to have become full time mediators within five year’s time. That’s pretty vivid ambition, given what I showed you before about the 34 people who are currently taking the 50% of the market.

We asked mediators if they saw any barriers to their dreams coming true. 95% of respondents identified barriers mainly insufficient demand for their services market competition, how does one get started, how does one build a reputation.

Now it’s interesting that we asked people where they saw themselves in five year’s time in relation to mediation. One of the options that we gave people was continuing to be a lawyer and representing clients much more in mediations. Only 2% of mediators, or only 2% of respondents ticked that particular box. Almost everybody else articulated their answer to the question

11 The Second European Mediation Congress Mediator audit in terms of their personal career as mediators. But the fact remains though that although the mediation audit demonstrates that the market has grown by 35% in two years, 2,700 cases is still incredibly small in the context of the 400 or so mediators who responded to the survey. To meet the various ambitions expressed by the mediators, the market needs to grow very significantly and perhaps I can give you one suggestion as to how that might happen. Think about how many accredited mediators there are in the market place at the moment. If you add up the number accredited by CEDR, the number accredited by the ADR group over the years, I would guess that you get not too dissimilar from the 2,700 mediations which I think we now have in the market place. So if every accredited mediator was to refer just one case a year to mediation, the market would double overnight. That’s a challenge for the mediators, I think, and a challenge for the lawyers amongst us. That’s the summary. The full mediator audit will be published on the CEDR website later this week. I would like to thank in particular those of you who contributed to it. A number of you left email addresses and we’ll also be emailing personal copies to you. I’ll be happy to answer any questions, probably not right now because we need to move on, but either of the breaks or later on. Thank you.