Legal costs can be hugely reduced if mediation is used in commercial disputes instead of going to court, a survey has found.
The average cost of going to court over a €200,000 commercial case in €53,800 in legal fees – but only €7, 000 if mediation settles the row.
The Irish Commercial Mediation Association (ICMA) polled 150 law firms and 300 qualified mediators for the survey. It identified a “low use” of mediation in banking, insurance and public –sector rows. More than six out of ten respondents said that their clients were concerned about the costs of litigation in Ireland. But many feuding sides still “want their day in court” and will go to court, whatever the cost, because of factors such as company policy, legal advice and preferring to let the judges resolve legal rows.
The survey revealed that 83 per cent of lawyers think that a clause inserted in all contracts should require the warring parties to try settlement through mediation before going to court. The vast majority of disputes that go to mediation relate to commercial law and debt disputes including litigation between banks and borrowers.
But alternative dispute resolution (ADR), which includes mediation, is now being used for a broader range of disputes.
These include family law and professional negligence. Last year 68 per cent of all mediations reached agreement, according to the ICMA. “This proves that mediators are now highly qualified and skilled to come to a solution for both parties, even in the most complex of cases” said Austin Kenny, ICMA chairperson. The association released the poll ahead of a conference to mark the tenth anniversary of the organisation.
Mr Kenny said that the greatest obstacles for mediators included the perception that mediation was “soft law” and the risk of lawyers protecting their litigation- fee income. The average mediator fee for a one-day of commercial mediation was €3,933 last year, with one mediator earning €16,000 for one day mediation. One – quarter of mediators who responded to the survey were not a member of a mediation body, raising concerns about future regulation of the sector.
The ICMA 2013 conference, held today, will be chaired by ICMA’s patron, former European and Supreme Court Judge, Ms Justice Fidelma Macken. High Court judge Mr Justice Peter Kelly who presides over Ireland’s fast-track Commercial Court-which resolves big business disputes- will be one of the keynote speakers.
Mediation experts for Australia, China and the UK will also attend the event at Dublin’s Aviva Stadium.