Karen Erwin, President, the MII, spoke of the changing legal landscape of mediation and the need for Mediators to be aware of the legal and statutory framework in which they operate in her opening address to the MII’s 13th Annual Conference in the Grand Hotel, Malahide on 4th November 2011. (Full address below)
Quoting figures for costs claimed in relation to civil cases in 2010 from the Annual Report of the Courts Service 2010, Ms Erwin calculated the cost of litigation in civil cases to be in the region of €1.3 billion.
Quoting the European Parliament’s Committee on Legal Affairs commissioned report ‘Quantifying the Cost of Not Using Mediation – a Data Analysis’, Ms Erwin spoke of the mediation paradox:
‘The paradox is that despite the fact that the use of mediation yields highly successful results, mediation is rarely used in a systematic way by disputants or lawyers. De Palo and Orecchini [authors of the Report] suggest that, given this continuing pattern, there should be an extensive publicity campaign to broaden the public’s awareness about the values of mediation. They further say that filling the void in public knowledge about the cost and time saving benefits was an important motivation to them in carrying out their study.’
Ms Erwin explained that the study conducted for the Report surveyed legal experts in 26 member states of the EU comparing the cost in time and money of using a two-step dispute approach – mediation first and then court if mediation is unsuccessful – against a one-step approach of going straight to court:
‘Using data from the World Bank Doing Business Report 2009 – the time it takes to resolve a claim through litigation in Lithuania is 275 days, while the longest of the EU countries was Slovenia with 1290 days. In Ireland the equivalent figure is 515 days…
‘The equivalent cost figures show Luxembourg as being the cheapest at 9.7%, the most expensive being Czech Republic at 33%. Ireland’s equivalent figure for cost was 26.9%. These percentages are costs recorded as a percentage of the claim. So the costs in Ireland in running a court case is 26.9% of the amount of the claim.’
According to Ms Erwin, the study found the breakeven point in terms of time for the two-step approach at 9% of cases having a successful outcome in mediation for Belgium and 4% in Italy.
In terms of actual costs, Ms Erwin noted the breakeven point for the two-step approach as being 44% of successful outcomes for Belgium and 28% for Italy.
‘So if there is a higher than 44% success rate in the mediations there will be cost savings of a mediation two-step approach over a one-step litigation approach. The equivalent figures for Italy are 28% – so if more than 28% of mediations are successful then there are cost savings’.
Ms Erwin pointed out that while these savings are in relation to time and cost that there are additional savings to using mediation including: management time; ongoing relationships; quality of outcome; and stress of litigation.
Ms Erwin stressed the MII’s commitment to raising awareness of, and standards in, mediation, and its commitment to support Government, stakeholders, dispute gatekeepers and mediation organisations in other jurisdictions in the promotion and development of mediation.
