Commercial mediation was the subject of an event held of Tuesday, 29th November, at which representatives from Government, the legal community and the business community gathered to witness The Hon. Ms. Justice Macken support the Irish Commercial Mediation Associations’ (ICMA) hard hitting message to the Irish business community – millions of euro and hundreds of business days are being wasted each year in needless litigation when, in many cases, an alternative exists.
In launching ICMAs new video ‘Talk is Cheap’, which illustrates how commercial mediation can be a more effective and efficient way to resolve business related disputes, Ms Justice Macken said that a massive amount of money is spent unnecessarily on litigation in cases where mediation may be a more appropriate and effective option. “Mediation is a no brainer for business and I feel it is particularly relevant for the banking and insurance industries at the moment”, commented the Judge in her address.
According to ICMA, the majority of commercial court cases centre on supply chain issues, relating to finance or quality of service provision, and HR issues relating to employee grievances. Certain sectors such as insurance, construction and public service, where litigation is a significant feature of business life, have considerable potential to becoming ‘dispute wise’ and as a result save money, time and preserve valuable business relationships. This potential is highlighted by reports this week revealing that the banks are spending millions on litigation in an attempt to repossess people’s homes although, in most cases of this nature, mitigation offers a more sensitive and effective approach.
The cost of commercial litigation in Ireland is over twice as high as in other jurisdictions – an average of €53,800 (27%) on a €200,000 claim compared to €25,337 (13%) in the rest of Europe. In stark comparison, the average cost of bringing a dispute to resolution in Ireland through the process of mediation is an average of €7,000 (3.5%) – a saving of €46,000 on a €200,000 claim.
Ms. Justice Macken also emphasised the enormous amount of time that business people involved in court cases are required to invest. “A significant amount of time is spent on, not only the time in court but, the preparation that needs to go into litigation. Anything that can prevent people spending time away from their business at the moment needs to be taken seriously”.
The protracted nature of litigation is demonstrated by the fact that the average case in Ireland takes 515 days to resolve through the courts, whereas ICMA reveals that cases opting for mediation are resolved in an average of 40 days.
ICMA Chairperson, Mr Austin Kenny commented that despite the acknowledged benefits of commercial mediation, uptake in Ireland continues to be relatively low;
“Low participation can be put down to a lack of awareness and understanding about the process and the expected outcomes. The video succeeds at highlighting the less well known benefits of mediation, one of which is complete confidentiality. In reality what is said in a courtroom quickly becomes public knowledge, often having serious consequences for those involved. With mediation all matters are carried out in complete privacy”.
“In addition, mediation is about facilitation not judgement or direction. This leaves the parties to the dispute in control at all times, secure in the knowledge that no decision can be forced upon them. Many businesses are unaware that only once both parties are in agreement the decision is legally binding” added Mr Kenny.
The video, a first of its kind, was produced by the Irish Commercial Mediation Association (ICMA) and can be viewed online at www.icma.ie . It portrays a dispute scenario between a supplier and client in a short movie format featuring professional actors. Clever scripting and a sprinkling of humour makes the video entertaining as well as highly informative on the nature, process and benefits of commercial mediation. There is no legal jargon in this video.
This ICMA awareness initiative is aimed at businesses involved, or potentially involved, in disputes, where a speedy, cost effective and efficient solution is desired. It is also aimed at professional organisations that seek to educate their members on best practice. Increasingly law and accountancy firms are embracing the option of commercial mediation and the video is designed as a tool which enables them to train staff and to inform clients to whom they are recommending commercial mediation.
Sponsors of the video include MII, DSBA, CIArb, Mediation Cork, The Law Society and The Bar Council.