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Are Local Authorities using mediation to deliver cost savings

Wed, 09 December 2009

"The Civil Procedure Rules emphasise the importance of ADR. The overriding objective set out in Part I of the Rules states that active case management includes encouraging the parties to use ADR if the court considers it appropriate (Rule 1.4(2)(e)). The court has a general discretion to adjourn proceedings so that ADR may be attempted and, if appropriate, to penalise parties through indemnity costs orders if ADR is rejected without good reason" (see Dyson and Field -v- Leeds City Council, CA , 22 November 1999).

"The appeal also demonstrates that courts should scrutinise extremely carefully applications for judicial review in the case of applications of the class with which this appeal is concerned. The courts should then make appropriate use of their ample powers under the CPR to ensure that the parties try to resolve the dispute with the minimum involvement of the courts. The legal aid authorities should co-operate in support of this approach." Cowl and others -v- Plymouth City Council [2001] EWCA Civ 1935, Court of Appeal

Any case that is capable of settlement through negotiation may potentially be suitable for mediation. This is especially so where it is desired that the underlying relationship between the parties should be maintained, or where speed and privacy would be beneficial. In such cases, mediation should be attempted as early as possible. Whilst ADR should always be considered at the outset and prior to initiating proceedings, ADR should continue to be reconsidered on an ongoing basis. Legal Services Commission

Irrespective of the requirements of the Civil Procedure Rules, all Local Authorities are under increasing pressure and scrutiny over expenditure. Budgets are being squeezed and the need to demonstrate greater value for money is paramount. There is clear evidence that general claims against Local Authorities are increasing in number and, in the case of Judicial Review, the increase is greater and more significant. The scope and value of cases are also increasing. The appropriate and skilful use of mediation in an ever increasing litigious world is one way to help achieve effective cost savings both in terms of legal costs and valuable management time.

Selected results of the Local Authority survey regarding JR process and Mediation show:

  • Once litigation had commenced only 10% of cases were referred to mediation. This is lower than for other types of disputes.
  • 86% of Local Authorities which responded saw mediation for Judicial Review disputes as a viable alternative to court proceedings.
  • 56% of respondents stated a preference to use mediation to try to resolve Judicial Review disputes.

In conclusion the report cites 'tight time constraints inherent in the Judicial Review process were considered reasons why mediation was not being used more by Local Authorities.'

However the report also notes 'the potential costs of litigation (including valuable internal management time) and the savings if the dispute is resolved by agreement. Local Authorities may also wish to bear in mind that if they offer mediation, which the claimant declined, and the claim ultimately succeeds, the early offer of mediation may assist the Local Authority in arguing that it should not pay some or all of the costs of the claim.'

How much does mediation cost? A very experienced mediator can be engaged for between £2,500 and £4,000 (shared equally between the parties) for a full day mediation. A Local Authority would also have to consider its own costs of preparation and attendance. However, it is easy to see that such costs are a small fraction of the cost of litigation.

The report recommends that Local Authority Lawyers (who are also aware of the need for public expenditure control) can be more mindful of when mediation can be used and more creative in its application.

Full transcript of report

Dispute Mediation

Mediation is a practical yet sophisticated process designed to address the real issues and obstacles behind conflict in reaching a commercially viable solution.

Why mediate?   >

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