Mediation Saves The UK An Annual £1.4bn While The Cost Of The Services That Help To Achieve It Is A Mere £15m

If the phrase “deficit reduction” characterised the early months of the new Westminster government, for many it has now been superseded by “preventative spending.” Investing wisely at an early stage to avoid spending far more later can save significant sums for the tightly-strung public purse – and one area of huge potential is mediation.

Conflict is an inevitable part of all aspects of human endeavour. In some cases, it provides creative tension to help generate innovative thinking. Often, however, it can escalate into a vicious cycle of antagonism and destruction as parties cling to and defend positions and lose sight of their real interests or original objectives.

The costs of conflict are high: an estimated annual £30bn to UK business, taking up 20 per cent of leadership time and resulting in 370 million working days lost. This can have a hugely hugely detrimental impact on performance and company valuation

in the private sector. In the public sector, it can lead to wasted money, poorer outcomes and political disillusionment.

The causes of conflict are many and varied. Poor communication is usually significant, compounded by personalisation of the problem, win/lose approaches, positional language, fault and blame, fear, ego and loss of trust.

In the current climate, difficult decisions are going to have to be made. Inevitably, conflicts will arise in allocating resources and addressing competing interests. Mediation provides a tried and tested method of handling difficult situations. It is a collaborative process in which an independent facilitator helps those with a dispute collectively address a problem focusing on their real interests, objectives and needs. It is flexible and confidential, designed to identify the real issues, ensure that everyone is heard and help to evaluate options for resolving differences in a safe environment. The parties are in control of the decision-making and not bound unless they wish to agree.

Mediation has been developed over 25 years in many contexts, from family disputes to neighbourhood conflict and from the workplace to commercial settings. It is used in many countries, including England and Scotland, the US, Australia and New Zealand, and has a significant success rate. In its latest audit of UK mediation, the Centre for Effective Dispute Resolution (CEDR) said that 75 per cent of cases were settled on the day of mediation and 14 per cent shortly thereafter. In Scotland, Core – which has been involved in about 400 mediations – reports an even higher rate of resolution on the day.

In Scotland, its use has grown considerably in the public and private sectors in both litigious and non-litigious matters. The Scottish Government is piloting the use of mediation in planning after research suggested that its use could release more than £3bn into the economy more than 40 weeks earlier than if other routes to dispute resolution were used.

Mediation is useful in the public sector because it is a creative process that is more likely to allow the relationship between the parties to continue and develop. This can be particularly important for two public sector organisations relying on each other in a supply chain where both have to continue to do business with each other.

Investing in it is a good example of preventative spend, helping reduce costs and improve outcomes. It is also a process that can help all parts of the public sector respond to difficult budgetary choices

The benefits can be significant for the economy as a whole. CEDR estimates that mediation saves the UK an annual £1.4bn. The cost of the mediation services that help achieve these savings is estimated at only £15m. According to a recent EU-funded study, the extra legal costs from not using mediation range from €12,471 to €13,738 per case.

Mediation can also help to build a culture of more collaborative problem-solving, which could have wider economic benefits by improving overall productivity and lead to better economic performance. Also, a country that builds a reputation as a place where disputes are minimised and resolved quickly, creatively and cheaply will be a more attractive place to work and invest in.

                       

John Sturrock

John Sturrock is the founder and senior mediator at Core Solutions, Scotland's pre-eminent provider of commercial mediation services. As a pioneer of mediation throughout the UK and elsewhere, his work extends to the commercial, professional, sports, public sector, policy and political fields. He is a Distinguished Fellow of the international… MORE >