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The 2013 Employment Tribunal Rules and Acas early conciliation both promote Alternative Dispute Resolution and both can seem attractive to the busy HR practitioner trying to protect their budget from unnecessary legal fees. But what do employment lawyers think about mediation as an alternative to litigation and how much do they really use it? The Employment Mediator website (www.theemploymentmediator.co.uk) carried out a survey of employment lawyers’ use of mediation to find out.

Does mediation deliver results?

58% of the employment lawyers who replied said that more than 75% of their cases which had gone to a mediation had settled. A further 22% said that the figure was 50-75%. So, clearly, if a case gets to a mediation, you have an excellent chance of reaching a settlement.

Lawyers also believe that the results that they achieve at mediations are good: 54% of those who replied thought that the result that their client had achieved at the last mediation they had attended had been better than the result that would have been achieved at a final hearing. Another 30% thought that the result had been about the same as the result that would have been achieved at a hearing. These figures suggest that mediation delivers more consistently than litigation.

What do the lawyers’ clients think?

60% of the employment lawyers who replied said that their clients had been satisfied with the outcome at the last mediation they had attended and a further 22% said that their client had been very satisfied. This combined satisfaction rating of 82% suggests that mediation leaves more lawyers’ clients satisfied than a day in the employment tribunal.

So how much mediation is going on?

84% of the employment lawyers who replied had recommended mediation to a client in the last three years but only 2% had attended 10 or more mediations and 34% had attended none. 53% had attended between 1 and 4 mediations. Given that the average tribunal litigator would have probably dealt with between 30 and 75 cases over the three year period covered by the survey, clearly mediation remains a minority sport – but why, given the success rates and levels of client satisfaction revealed by the survey?

The survey suggested that a possible explanation is that only particular types of cases are regarded as being appropriate for resolution by mediation, perhaps particularly those where there is an ongoing employment relationship: 65% said that their most common reason for recommending mediation was either that it might enable earlier resolution than a tribunal hearing or that it might provide a more practical resolution when there was an ongoing employment relationship.

Equally, the survey suggested (unsurprisingly) that mediations very often took place when settlement was a real possibility in any event: 66% said that their client “might have reached an agreement without the mediator but the mediator really helped the process” when asked how they most often felt after a successful mediation. This suggests that certain types of case “self-select” for mediation.

How much does it cost?

A judicial mediation in the employment tribunal now attracts a fee of £600 (prior to the introduction of employment tribunal fees in July 2013 judicial mediation was free). This is a lot less than the fees typically paid by parties in privately conducted mediations: 36% of those who had attended privately conducted mediations said that the average fee per party excluding VAT was over £2000, and a further 37% said the amount was between £1000 and £2000.

The fact that parties to an employment dispute are prepared to pay mediation fees of this size, rather than opt for judicial mediation, suggests that privately conducted mediations are regarded as having advantages over judicial mediations (even after the fact that not all employment disputes would be eligible for judicial mediation has been taken into account). Equally, the fact that the total fees for a mediation were at least £2000 plus VAT in more than 75% of privately conducted mediations suggests that such mediations are probably preferred to judicial mediations in relatively high value claims where both legal fees and compensation may be substantial.

What effect will Acas early conciliation have on mediation?

27% of the employment lawyers who replied thought that Acas early conciliation would reduce the number of mediations, 12% thought it would have the opposite effect and 57% thought that there would be little change.

Acas early conciliation is a low-tech procedure which takes place before claims are issued and which operates within severe time constraints (the initial period of one calendar month can only be extended once by two weeks (rule 6 of the EC Rules)). It seems most likely to “knock out” claims which are clear cut and of limited value. The level of fees in privately conducted mediation (see above), and the fact that judicial mediation will usually only be made available in cases which are likely to last at least 3 days, suggests that the 57% who thought early conciliation would have little effect on the number of mediations may well be right.

That said, it may well be that Acas early conciliation, even when unsuccessful, may well get parties “in the mood” for mediation. So an Acas early conciliation which fails – for example because the Respondent to a potentially high value discrimination claim has insufficient information to analyse the merits of a claim at the Acas early conciliation stage – may lay the ground for a later successful mediation once a claim has been issued and full particulars provided.

The effect of the introduction of hearing fees in Employment Tribunals on mediation

11% of the employment lawyers who replied thought the number of mediations would reduce following the introduction of hearing fees, 33% thought it would increase, 39% thought that there would be no change and 17% thought that the effect of hearing fees was unpredictable.

Hearing fees are £230 (type A claims) and £950 (type B claims). The level of fees in privately conducted mediations (see above) suggest that the 39% who that though hearing fees would not affect the number of mediations may well be right, at least so far as privately conducted mediations are concerned. However one can imagine Respondents to type B claims being in some cases unwilling to pay the £600 fee for judicial mediation (which is payable by the Respondent not the Claimant (regulation 4 of the Tribunal Fees Order)) before they know whether the Claimant is prepared to stump up the £950 hearing fee.

Who makes the best mediators and how do employment lawyers choose them?

29% of the employment lawyers who replied thought solicitors, 24% barristers, 8% judges and 17% non-lawyers. There was more consensus about how mediators are selected: for 61% the reputation of the mediator was the most significant factor with a further 18% saying that it was their own experience of the mediator. Cost was the most significant factor for only 13%.

Conclusions 

With the dawn of Acas early conciliation and employment tribunal hearing fees the following lessons can be drawn from the collective experience of employment lawyers:

  • Mediation delivers consistently good results in the majority of cases where a mediation takes place;
  • Client satisfaction with the outcome of mediations is generally high;
  • Mediation is particularly favoured as a method of resolving disputes when early resolution of the dispute is regarded as important and/or there is an ongoing employment relationship;
  • A privately conducted mediation will usually be substantially more expensive than a judicial mediation;
  • Although only time will tell, it seems unlikely that Acas early conciliation will result in a significant reduction in the number of cases going to mediation; indeed it may well have the opposite effect by opening the parties’ minds to the benefits of a negotiated conclusion to their dispute even when early conciliation has not resulted in a settlement;
  • Hearing fees, on the other hand, may result in Respondents who are only prepared to pay for a cheaper judicial mediation being less willing to engage in mediation because they wish to see whether the Claimant is prepared to pay the hearing fee. Some reduction in the demand for judicial mediation is already being reported for the period prior to the introduction of hearing fees.

Key

The 2013 Employment Tribunal Rules – The Employment Tribunals Rules of Procedure contained in Schedule 1 to The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 SI 2013/1237.

The Tribunal Fees Order – The Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 SI 2013/1893.

The EC Rules – The Early Conciliation Rules of Procedure contained in Schedule 1 to The Employment Tribunals (Early Conciliation: Exemptions and Rules of Procedure) Regulations 2014 SI 2014/254.

Paul Evans, Mediation-1st