Mediation, costs and proportionality

I’m campaigning for the proportionality rule which says costs must be proportionate to the value of the case, to be enforced. The Family Procedure Rules (FPR) and the Civil Procedure Rules (CPR), already say costs should be proportionate to value, but the rule does not have a clear point at which costs are measured against a specified benchmark which would act as a brake for escalating costs, so in its present form it isn’t working.

This results in repeated costs scandals, damages the public’s trust in lawyers and is destroying their markets.

Civil mediation has never had any compulsion to hear about mediation from a mediator. It is systematically avoided at the same time as people sing its praises. The Centre for Effective Dispute Resolution’s (CEDR) biennial report for 2015 estimated there were 10,000 civil mediations in 2015 – and the Civil Justice Statistics indicated 250,000 defended cases that year – so less than 4% of those were mediated whilst costs ran out of control. Given the success of mediation at resolving disputes and the repeated litigation costs scandals, 4% is not a satisfactory percentage.

Mediation creates the light bulb moment when people realise they never will agree on the evidence or legalities – but they can sort it out. Mediation should be a systematic compulsory brake and the most fruitful time for both civil litigants to hear about mediation at a Mediation Assessment Intake Meeting (MIAMs) is when joint costs reach 20% of case value. In family cases this is often only 10-30% of the total assets, as it is rare for a spouse to get nothing. In civil cases it should be the net value of the claim less any counter-claim. This excludes undefended cases.

How we interpret ‘proportionate costs’ is a value judgement. The many lay people I’ve spoken to tend to think that 20% is too high. I believe it is about right. 20% captures parties who would never engage pre-issue because they are head-buriers. Parties are beginning to get rattled about costs. The judge is wondering how to control costs. The proportionality rule is arguably being breached.

There should have been some disclosure, evaluation and advice on settlement goalposts. A good time to mediate – and for family litigants who have previously avoided a pre-issue MIAMs to have to have to attend one. If MIAMs were automatically directed by judges for both parties at the 20% of case value stage, many people would mediate and many cases would stop right there. A brake for MIAMs at 20% of value would transform costs and outcomes for court cases and the number of cases progressing further at court would drop hugely at no cost to the court system, the MoJ or taxpayer.

If you have heard that family MIAMs are not working, let me explain: the courts are undermining them by not enforcing the requirement for the form confirming a MIAM has taken place, at last count only one in 20 family court applicants had attended a MIAMs, so more people go to court and stay there. The National Audit Office reported in 2005 whilst 12% of applicants won’t proceed with mediation after their MIAMs, 44% of their partners won’t engage after no MIAMs. That meeting with a mediator is critical and the referral of both parties is needed to promote mediation and thereby settlement.

Judges should direct litigants to MIAMs at the 20% costs threshold. People without legal capacity and children would need next friends or representatives to enable them also to benefit from mediation. Disputes between and within families, for example over a dying loved one, powers of attorney, wills, executorships frequently involve very angry people. Anger is a stage in the grieving process – and mediation should sometimes be attempted earlier to avoid litigation further destroying priceless family relationships.

For those of you wondering why compulsory MIAMs are so important I have put a chronology of the effect of compulsory referral to MIAMs of family court applicants since 1997 on my website with an analysis you may find of interest.

Our DR system is antithetical to settlement with its focus on debating the evidence, rights and wrongs and arguing about the law. It is literally the medicine that is killing the patient. We must utilise our modern understanding of the psychology of conflict and its resolution. Mediation is grounded in the psychology of conflict and its resolution and should be an automatic integrated stage in the litigation process.

We should not give primacy to litigation which should rather work in parallel with mediation, with the differing interventions working harmoniously, creating an affordable, functional dispute resolution system fit for the 21st century.

Mary Banham-Hall is a family lawyer and a mediator. She was among the first 100 collaborative lawyers in the UK and in 1999 she set up her mediation practice, Focus Mediation. She has recently launched a petition calling for the proportionality rule to be enforced