Many lawyers still need convincing about the benefits of mediation, but its impact in personal injury cases can be hugely beneficial.

‘I felt like I was beating my head against the door for four years, just getting nowhere. The lawyers were sending things back and forth basically trying to save themselves a few pounds.’ This apparently jaundiced view of our compensation system comes from 31-year-old Gavin Slessor. His frustration becomes immediately understandable when one considers what he has been through.

Slessor was working for a downstream oil and gas company testing offshore equipment in Aberdeen in May 2003. He was operating a lifting device orienting the control module that sits atop the wellhead on the seabed controlling the flow of oil. The equipment collapsed on the then 26-year-old, taking off his right arm and right leg.

The profession has so far remained fairly allergic to the use of alternative dispute resolution (ADR) to resolve accident claims, let alone a claim as serious as Slessor’s. However, the parties involved hope that the mediation, conducted by the Centre for Dispute Resolution (CEDR) in this multi-million-pound case, is the start of a trend.

CEDR has launched a special unit aimed at PI work. It argues that conventional litigation ‘fails the parties’.

‘In PI cases, claimants who have suffered the shock and disruption to their lives feel angry and powerless at being kept out of their damages while the claims process runs its course; in turn, defendants pay out significant sums of money in costs,’ a spokesman for the group says. The benefits of ADR, however, are ‘well known’.

Getting heard

For Slessor, the chief benefit of mediation was providing him with a forum ‘to say my piece’, up until then denied in the litigation process. ‘I’d been in various courtrooms listening to judges but having little input. It was really, really starting to wind me up,’ he says. The company Slessor worked for was taken over by US giant General Electric. The decision to mediate came as a result of a heartfelt letter sent from Slessor to GE’s chief executive, Jeffrey Immelt.

‘I wrote a fairly strong letter with pictures to their head man, trying to get him to realise what they had taken on when they bought the company,’ Slessor explains.

Immelt referred the matter on to GE’s head of litigation, Michael McIlwrath, based in Florence. ‘I had done the pre-acquisition due diligence,’ says the American lawyer. ‘I confess I didn’t pay much attention to Gavin’s case. Even though it was a large claim, it was insured and we had legacy insurers, and so it wasn’t on General Electric’s dime – until Gavin sent this rather shocking letter to our CEO.’ McIlwrath took a personal involvement in the case and suggested to Slessor that it should be mediated.

CEDR director Tony Allen was the chosen mediator. ‘The thing that strikes me about PI mediation is that it brings claimants and defendants right into the heart of a case which, after all, belongs to them and not to the legal profession,’ says Allen, who had 30 years of experience in accident claims before joining CEDR. ‘There are certain claimants who don’t mind and just want the cheque at the end of the day. Then there are the other types of claimants who want the opportunity to meet the parties, to make decisions about a case and get involved.’

‘When I did get the chance to have my say, I let them have it with both barrels,’ says Slessor. He believes the mediation has helped in his ongoing rehabilitation from his catastrophic injuries. He is pleased with the settlement (which is confidential) and feels his case has been dealt with fairly, a state of satisfaction felt by a very tiny minority of parties in conventional litigation. Although, Slessor adds, he went to the one-day mediation with ‘my solicitor, QC, dad and girlfriend – and on the other side of the table there were 16 of them’.

The case produced the right result for Slessor. ‘The figure was right for me, because if we had added everything that I would need for the rest of my life – whether it be loss of future earnings or arms and legs – it would come to what I was looking for,’ he says. He has recently spent £25,000 on a specially adapted hand with moving fingers. ‘If we hadn’t gone through the mediation process it wouldn’t have been settled for another two to three years, minimum,’ he says. Five and a half years after the accident, Slessor has just gone back to work with GE.

So why haven’t PI lawyers embraced ADR? ‘It is an unfortunate truth that the majority of PI lawyers have never tried mediation,’ acknowledges Martin Cockx, a partner at the Manchester claimant firm Amelans. Cockx is also director of Trust Mediation, a not-for-profit PI claims scheme whose members are committed to mediation. ‘A lot of claimant lawyers reckon that it is just a chance to cut fees, and insurers just try and wriggle out,’ he argues. ‘I have a lot of claimant solicitors who say to me: "What is the difference between mediation and a joint settlement meeting?" The difference is you have an individual, a mediator, who can reality-check everybody and check egos.’

Amelans, which once styled itself as the ‘Rottweilers of the PI industry’, is now an ambassador for ADR. The firm has handled about 30-40 mediations with, according to Cockx, ‘a 100% success record’.

Resistance to acceptance

This is a recognised shift. ‘There is significantly more willingness to mediate in the world now than there was 12 months ago,’ says Sir Henry Brooke, chairman of the Civil Mediation Council. He reckons claimants ‘like the mediation process enormously because they are treated like adults’.

‘The mediator takes pains to explain things to them and they are allowed to say what they want to say,’ he says. ‘It is a forum that’s safer for them than the joint settlement meeting, which is really dictated by professionals who talk in professional shorthand to their opposite number professionals.’

The former vice-president of the Court of Appeal also chairs Trust Mediation. He has so far mediated 53 cases, a third of them PI. Trust Mediation covers disputes above £25,000 for a fixed fee of £1,000; £500 each side, plus an administration fee of £150. ‘People know what they are going to get without any hidden extras,’ Sir Henry says.

The CEDR PI unit has three products: a paper evaluation service (conducted by retired district judges and for cases up to £50,000, with fees starting at £195); a telephone mediation service; and mediation with accredited mediators drawn from its panel of PI practitioners (£400 for a half-day and £700 for a full day).

‘What one is seeing as the mediation market matures is packages provided for different sections of the market,’ says Sir Henry. He points out that claims under £1,000 can be handled by the new small claims court mediation scheme which, he says, is working excellently.

‘After their first year they had about 3,500 mediations conducted by the 24 mediators, with a 70% success rate and 98.4% positive feedback,’ he says.

There are two reasons why there has not been much enthusiasm from either the legal profession or the insurance industry, reckons Maurice Nichols, a CEDR mediator and former president of the Forum of Insurance Lawyers. ‘Something like 97% of all PI claims are for less than £25,000 and mediation can be relatively expensive if all the parties have to be in one place and everyone’s time-committed,’ he says. As Nichols points out, the issue is being addressed through schemes such as telephone mediation and the CEDR evaluation scheme.

Second, Nichols says there is still some education needed about what ADR can provide, how it works and why it is beneficial: ‘There is the attitude from insurers that they already mediate because they have roundtable settlement meetings, but that’s not mediation – parties are not assisted by a mediator and it does not have the benefit of involving the claimant as part of the settlement process.’

A recent pilot with insurer Allianz demonstrates, CEDR claims, that parties will buy into the process. That pilot dealt with, in Allen’s words, ‘slippers, trippers and road traffic cases with mostly £5,000 or less at stake’. In 14 cases over a three-month period, the parties opted for mediation in all but one instance – ‘a hugely high conversion rate’, says Allen.

Mixed messages

The growth of mediation has also been hampered by rather mixed messages from the courts, not least the Court of Appeal in the 2005 case of Halsey v Milton Keynes NHS Trust, which looked at when it might order costs against a successful party that refused to mediate at the invitation of the unsuccessful party. This followed from the 2002 case of Dunnett v Railtrack, where for the first time a successful litigant was deprived of costs.

‘Halsey softened off the rigour that people perceived applied in this area. That’s why there hasn’t been a disciplinary move to mediation,’ says Allen. ‘People have got the message that it was going to be in very rare circumstances indeed that they would have their knuckles rapped.’

Allen reckons, however, that the Halsey ruling is ‘quite vulnerable’. The case has been criticised by senior members of the judiciary, including the former Lord Chief Justice, Lord Phillips and earlier this year the Master of the Rolls, Sir Anthony Clarke. He took issue with the line of argument that suggested compulsory mediation would contradict parties’ right to a fair trial under the European Convention on Human Rights, saying at the time: ‘There are a number of European states which provide for compulsory or court-directed mediation without any suggestion they are contradictory to the convention.’

Allen also sees the apparent inertia towards PI mediation in the context of uncertainty about remuneration for lawyers. ‘There has been a lot of pressure generated in PI because of the great difficulty of making a living for lawyers,’ he says, pointing to the withdrawal of legal aid and extension of conditional fee agreements. ‘People talk about ADR in terms of an alarming drop in revenue,’ he says. ‘I'm not sure about that. But PI lawyers on both sides aren’t comfortable with spreading the load around with mediators.’ That, he argues, is about to change.

Jon Robins is a freelance journalist