It can pay to mediate

June 7, 2021

Helen Curtis explores the circumstances when the Legal Aid Agency (‘LAA’) will fund mediation in civil cases.

In a speech at Hull University about the relationship between formal and informal justice, the Master of the Rolls, Sir Geoffrey Vos committed to remove ‘alternative’ from ADR and concentrate on establishing Dispute Resolution as part of the legal framework. In order to achieve this it is crucial that parties are aware what funding is available for mediation. Generally, the parties to a civil mediation split the mediator’s fee equally, although there can be occasions where one party offers to pay the entire fee. The legal costs of lawyers preparing for and attending the mediation are initially borne by each party. Where a settlement agreement is reached, there is sometimes an opportunity to negotiate the costs of the mediation and the litigation to date, but this needs to be carefully navigated to ensure the substantive settlement remains intact. This is relatively straight-forward, even if it provokes tension at the mediation. Where one party is being supported via Legal Help or has the benefit of a civil legal aid certificate however, the issue of costs can have a different impact.

Robert Buckland MP’s speech at the Law Society on 4 June 2021 echoed Sir Geoffrey Vos’s commitment when he said, ‘I want to re-define the nature of dispute resolution in our country. I want parties to look beyond litigation at the faster and simpler alternatives that exist, such as mediation and conciliation for example’. Recognising the strain on families produced by lockdown, the Secretary of State for Justice made reference to the Family Mediation Voucher Scheme – with a value of £1m – to support families pursuing mediation. The equivalent does not exist for civil litigants but the Secretary of State considers that ‘mediation’ has for too long been considered ‘some sort of add-on or diversion’ and he wants it to become ‘the mainstream’. He concluded this section of his speech with an entreaty, ‘so, let’s stop viewing them as alternatives and instead look at them as integral to the justice system of tomorrow’.

The fact that mediation is not yet recognised as integral to the justice system of today is telling. There are difficulties in making mediation an easy choice at an early stage of litigation: the lack of knowledge and experience of mediation for parties, likewise on occasions, their lawyers. Other concerns can be the imbalance of power between the parties, perceived or real; scepticism of the other party’s genuine motivation to settle and suspicion that parties have of a confidential process in case it is used as a fishing exercise. Another barrier in publicly funded cases is the difficulty in finding clear, accessible information about how civil mediation works and how it is funded. When mediation can offer a swift resolution, reduce the strain of legal proceedings on parties, create positive solutions and most importantly bring the dispute to an end, it seems a missed opportunity that the knowledge of public funding for mediation and its availability is not more readily accessible.

So, when is public funding available for mediation? The Legal Aid Agency (LAA) has confirmed that the mediator’s fee can be covered under Legal Help as a disbursement, at the same rate as expert fees namely £100.80 per hour. Similarly in civil cases including judicial review, even at the pre-permission stage, the mediator’s fee is payable as a disbursement.

The cost of legal representation at a civil (ie non-family) mediation though is at the LAA’s discretion and an assessment will be made of what costs have been reasonably incurred. Information about costs paid by the other parties or any award of financial settlement will need to be provided to the LAA in order for the impact of the statutory charge to be taken into account. This inevitably carries some risk and is not an immediate encouragement to consider mediation, as might be expected when it is so warmly encouraged by the Lord Chancellor and the senior judiciary.

How confident can lawyers be in proposing mediation – a process with which their client is likely to be unfamiliar – when they have to choose between allowing their client to go through the process unrepresented or risk not being paid? The intention to make dispute resolution processes such as mediation mainstream needs a financial commitment to ensure that parties’ experience of mediation is positive and their lawyer is there to advise them whether a proposed settlement is one they ought to accept. Perhaps specific guidance from the LAA as to when the cost of legal representation at mediation would be viewed as reasonable would reassure legal aid lawyers.

The use of mediation is likely to result in cost savings and reduce cases coming to court, which may be welcome given the backlog in courts as a result of the pandemic. If mediation is to be viewed as a mainstream dispute resolution tool sooner rather than later, funding as well as information is needed in order to bring about confidence in its use.


Garden Court Mediation

Garden Court Mediation