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How does the mediation market look today?

by Philip McMullan on 02 Sep 2016

shutterstock_178607258.jpgCEDR (The Centre for Effective Disputes Resolution) published the findings of its seventh market audit in May. Using a web-based questionnaire, the body set out to understand the attitudes of commercial and civil mediators to professional standards and regulation, as well as to benchmark how the market has grown and developed since the study was last conducted in 2014.

The fieldwork collected 319 responses, over half of the membership of the Civil Mediation Council (CMC), and was open to all mediators in the UK, regardless of organisational affiliation. The resulting report is focused on the commercial mediation field, so excludes community and family mediation, as well as the statutory ACAS service and the HMCS Small Claims Mediation Service. In tandem with the research among mediators, CEDR ran a parallel survey of lawyers in order to gain a client perspective. 

Headline results about the mediation market

The headline figures, according to CEDR's estimates, are that the current size of the commercial mediation market in England and Wales is around 10,000 cases per year. This is a 5.2 per cent uplift on the 2014 estimate of 9,500 cases, suggesting that the growth of the market has slowed in the past two years. CEDR emphasises that these findings may not reflect the experience of individuals as market changes have created winners and losers. Namely, the distinction between direct referrals and service providers is starting to disappear as some mediators move into self-organised groups while the number of stand-alone schemes is falling as providers drive consolidation. The CMC ran its own research, which asked mediators about market conditions: 42 per cent said that mediations were harder to come by while 33 cent reported an improvement, highlighting the polarity in the market. 

Service providers still account for a large proportion of market share, with CEDR's research among lawyers indicating that 45 per cent of cases continue to be arranged through providers – even where the client is working with their specifically chosen mediator. CMC research underlines this conclusion, finding that 86 per cent of case activity is delivered by seven large providers – groupings of over 100 mediators. 

Mediation market dominated by a few

As CEDR's 2014 audit showed, the mediation market is dominated by a relatively small number of individuals. This research found that a group of 145 individuals were involved in around 85 per cent of all non-scheme commercial cases – around 40 cases each per year. 

While mediators and lawyers agree that professional reputation and experience are the most important factors driving the appointment of mediators, they disagree on the next most important factors. Mediators say qualifications, while lawyers are focused on mediation style. Both groups agree that sector experience is important. 

Diversity in the field remains an issue with 92 per cent of respondents categorised as white. While this is a slight improvement on the 96 per cent figure from the 2014 study, CEDR's analysis suggests this is a result of non-UK respondents rather than any underlying improvement in ethnic diversity in the UK marketplace. Gender diversity has improved with 35 per cent of respondents being female, up from 26 per cent in 2014 and 19 per cent in 2010. 

The trend away from legally qualified mediators continues and for the first time less than half of respondents (43 per cent) were lawyers by training. The data suggests that the decline in lawyers is attributable to increased interest from other professions as mediation becomes the dispute resolution mechanism of choice for workplace, tax, medical and education cases. 

While the overall success rate of mediation remains constant, with an aggregate settlement rate of around 86 per cent, the proportion of cases that achieve settlement on the day of mediation has fallen from 75 per cent to 67 per cent since CEDR's 2014 study. 

Mediation is fantastic value for money

CEDR's audit underlines the contribution which mediation makes to the UK economy and the potential savings it can make to commercial parties involved in disputes. If mega-cases are excluded, the total value of cases mediated each year is around £10.5 billion. That means that since 1990 the total value of mediated cases is approaching £85 billion. CEDR estimates that the earlier resolution of cases brought about by mediation saves business around £2.8 billion a year in wasted management time, damaged relationships, lost productivity and legal fees.

Since 1990 then, the mediation profession has contributed savings of £22.6bn. In comparison, the research suggests that the aggregate value of the mediation profession in terms of total fee income is around £26.5 million – highlighting the fantastic value for money which the profession delivers.

Philip McMullan is a writer and researcher.

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Topics: ADR, Mediation

Philip McMullan

Written by Philip McMullan