The number of disputes received by mediation centres as well as the settlement rates are only increasing with every passing year, and the few barriers to mediation such as parties not appearing for a session, hinders different markets differently, write Rashika Narain and Sumit Banerjee.
The benefits of time and cost that arise from adopting mediation have been celebrated time and again; nonetheless, when choosing to mediate a dispute, a relevant consideration is - how successful such a process has been in the past. In other words, one would always ask, what is the track record of mediation as an option for concluding and closing disputes. While, records of mediation in India are not currently available in any substantial numbers, due to limited collection of data, statistics from different countries regarding the success rate of mediation proceedings are inspiring as they indicate how successful mediation as a process is.
The comparative efficiency of mediation over litigation is well known. For example, an EU report of 2014 found that both average time and cost to arrive at an outcome, came down drastically in most EU nations such as UK, France, Italy, etc., in mediation cases vs litigations. Most impressive were the efficiency improvements achieved through mediation in Italy, where average time to resolution came down from 1,185 days to 66 days, and cost came down from Euro 16,000 to a mere 3000 Euros. For comparison, the average life of a case in India is 13 years, and litigants in the country spend an estimated total of Rs 30,000 crore per year towards court hearings.
Now, these are compelling data sets, and people rightly say, data are eloquent; however, we say that data are even more eloquent and forceful, when they report quantified outcomes. And here comes the outcomes.
Taking a look at Asia, the Singapore Mediation Centre (SMC) alone has dealt with more than 3,600 disputes ranging from construction disagreements to information technology, insurance and shipping cases. The settlement rate at SMC is close to 70 per cent, with nearly 90 per cent of those disputes being resolved in just one working day. In Hong Kong, the court annexed mediation centre records a total of 780 cases being mediated in 2017, which was a marked increase over 2016, when only 361 cases were reported. The ultimate success rate of Hong Kong cases in 2017 was 61 per cent, with 52 per cent being resolved during the mediation process itself and the remaining disputes were disposed of, within six months after the conclusion of the mediation session.
Italy has a somewhat different experience due to the mediation legislation that has been passed in that country, making mediation mandatory before approaching courts. Between March 2011 and March 2012, over 90,000 disputes were filed. However, due to the respondent sometimes not appearing for sessions, several mediations went unresolved. Among the sessions where both parties (plaintiff as well as respondent) were present, 48 per cent were successful. While the respondent not appearing for a court case is not uncommon, the takeaway lesson from this example is that it is imperative for both parties to be present and agreeable for a successful mediation session to happen.
Conventional examples of highly successful mediation settlement rates would include the United Kingdom (UK) and the United States of America. In the UK, the Centre for Effective Dispute Resolution published the results of their survey, reporting that the size of the mediation market in England and Wales is close to 10,000 disputes annually and the settlement rate for the years 2014-2016 was as high as 86 per cent. In the USA, Financial Industry Regulatory Authority, Inc. recorded a high settlement rate of 72 per cent for mediations in the year 2018.
The number of disputes received by mediation centres as well as the settlement rates are only increasing with every passing year, and the few barriers to mediation such as parties not appearing for a session, hinders different markets differently. Countries like the Singapore, UK or USA do not face these issues as much as Italy or Hong Kong and such differences perhaps account largely for the differing success rates.
Regardless, the trend of settlement rates across the world indicate only an improving trend. The Global Mediation Survey 2016, conducted by International Mediation Institute, involved participation from 831 mediators representing 67 different countries. This survey found that the mediation market is growing exponentially across the globe and business advisors and potential users today understand mediation better than they did earlier. Further, studies conducted in the USA show that parties are more likely to immediately comply with a mediation settlement than a court decree or an arbitral award.
It goes without saying, that the likelihood of a settlement being finally executed is an important consideration in front of potential disputant(s), in selecting a particular pathway of dispute resolution. Mediation, across the world has had impressive success rates with at least more than half of the cases being resolved. As mediation settlements are cost effective, time-efficient with full party autonomy and with majority of cases being resolved, and to top it all, bear a higher likelihood of compliance, we do not see any reason why mediation will not be the first choice in dispute resolution for everyone.
It also closely follows like a corollary, that a neutral and transparent institution such as the Centre for Mediation and Conciliation of Bombay Chamber, shall be the obvious first stop in all our commercial disputes, going forward.
Hindu Businessline11 June 2018
About the auther
Rashika Narain is IVth Year student, B.A. LL.B. at National University of Juridical Sciences, Kolkata; Sumit Banerjee is Chief Mentor of the Centre for Mediation and Conciliation promoted by the Bombay Chamber.