Research in New Zealand sheds light on commercial mediation in that country, and highlights the lack of hard data on mediation in Canada.
Grant Morris, law professor at Victoria University of Wellington, New Zealand, published From Anecdote to Evidence: The New Zealand Commercial Mediation Market, in 2017.
(Hat tip to mediator/arbitrator Rick Weiler (@Medarbman) for retweeting a commentary on the NZ paper from a US bankruptcy attorney, which drew my attention to this interesting research.)
Professor Morris’s research project surveyed and interviewed commercial mediators. New Zealand is a relatively small country, so the numbers for this research were quite manageable.
The author notes that there is little empirical research into commercial mediation. For one thing, mediation is private. Mediators (and counsel) are bound by confidentiality clauses in mediation agreements.
Before this study, there was only anecdotal evidence about commercial mediation in New Zealand – and in other common law countries, including Canada. This contrasts with statutory mediation in other fields, such as labour or family matters, where there was more empirical data due to mandatory reporting requirements.
“The opacity of the [commercial mediation] market makes it very difficult to obtain statistics. In comparison, court-connected civil mediation schemes have been subjected to exhaustive research.”
The study found that commercial mediation was “quite limited” in New Zealand, compared to both commercial litigation, and to mediation in other fields. This, despite persistent claims since the 1990s that commercial mediation is rapidly increasing (and despite overt criticism from both the bench and the bar that private mediation undermines the civil justice system). In reality, most practitioners were “struggling to secure work.”
Based on the survey and interviews with leading mediators, it appears that about two-thirds of commercial mediations in New Zealand are conducted by about 10 mediators. The rest are conducted by some 40-50 other active mediators.
The survey was unable to confidently answer the question: “How much commercial mediation is there?” The number obtained by the survey (813 a year) is, perhaps, too low – because the survey response rate was less than 100% – or too high – because many respondents seem to have taken an overly broad definition of “commercial dispute”. For example, some respondents included business aspects of disputes over family property and estates; others mentioned employment or residential construction matters.
The paper notes that, in the UK, a market about 14 times larger than New Zealand, the Centre for Effective Dispute Resolution (CEDR) reported about 9,500 commercial mediation cases in England and Wales in 2014. CEDR also found that 85 percent of commercial mediations are conducted by a small proportion (15-20%) of the mediation professionals. (CEDR, ‘The Sixth Mediation Audit A survey of commercial mediator attitudes and experience’, 22 May 2014)
I’m not aware of any comparable published statistics for commercial mediation in Canada (or in any of the individual provinces).
Some interesting (but unsurprising) findings:
- Commercial mediation is dominated by older men. Only 28 percent of respondents were female (consistent with similar findings in the UK). This contrasted with other areas, such as family mediation, where most mediators were female.
- Most commercial mediators (70 percent) have legal training. Many practiced commercial law or litigation, demonstrating a clear career path from legal practice to mediation practice.
- The mediation profession is not regulated, but most commercial mediators belong to one of the national ADR organizations, which provide training, certification and some degree of quality assurance.
- Most of the mediators surveyed said they used a “facilitative” style. A smaller number described their styles as “evaluative” or “settlement” (compromise and bargaining) focussed. This contrasted sharply with anecdotal evidence indicating that most commercial mediation is either evaluative or settlement-driven. The author speculates that some mediators may be describing themselves as “facilitative” but actually using more evaluative or bargaining styles when it comes time to nail down a settlement. Respondents also said they believe that parties to a commercial dispute expect a more evaluative or settlement-focussed mediation style.
- Settlement rates were described as a “controversial but relatively straightforward” way to measure success of mediation. The survey respondents reported considerably higher settlement rates than research from statutory and court-based mediation would predict. More than half of survey respondents reported settlement rates over 90%, compared to rates of 70-90% in other studies. (The survey did not address partial settlement because of difficulties defining the term.) The author questions whether high self-reported settlement numbers may reflect the fact that settlement rates seem to be a selling feature in the commercial mediation field.
- For users of commercial mediation, the main motivations were:
- Cost (compared to litigation (61 percent of respondents)
- Time (also compared to litigation (50%)
- Confidentiality (25 per cent);
- Preserving relationships (19 per cent);
- The parties’ desire to settle (17 per cent);
- Control over the outcome (17 per cent);
- Mediation was advised by counsel (17 per cent);
- Mediation was required by contract (11 per cent).
(Most respondents cited multiple reasons in their answers.)
Lack of public and professional awareness was seen as one of the main challenges facing commercial mediation in New Zealand. Interestingly, respondents cited both a shortage of good, experienced commercial mediators and an oversupply of mediators relative to the amount of work available!
The mediators surveyed also said there was a reluctance from “gatekeepers” (mainly lawyers) to recommend mediation to their clients. These responses are consistent with challenges in other jurisdictions (and other areas of law).
The New Zealand research concludes that more awareness of the benefits of mediation – and better access to information about mediator availability, qualifications, and costs – are the keys to increasing the use of commercial mediation, both domestically and internationally.
For an international perspective see: SI Strong “Use and Perception of International Commercial Mediation and Conciliation: A Preliminary Report on Issues Relating to the Proposed UNCITRAL Convention on International Commercial Mediation and Conciliation” (University of Missouri School of Law Legal Studies Research Paper Series (2014-28)
It would be very useful to have more detailed, objective statistics about commercial mediation in Canada (and mediation in other fields as well). Is anyone currently doing this research?