Mediation services have increased after the Access to Justice Act of 1999 and the Civil Procedure Rules of 1999 which highlighted that the civil Courts were over congested with disputants who were pursuing civil and commercial disputes of all types, whereby the legal costs involved in those disputes was more than the original money being claimed.
At Effective Dispute Solutions Limited we see this all the time, by the time an individual or business has taken another individual or business to Court its not uncommon for them to have spent more in legal fees than the amount they were originally claiming for.
Mediation services can resolve your disputes of any nature quicker, less stressfully and most importantly much more cost effectively than going through the lengthy litigation (Court) process.
Although I preach this wherever I go flying the flag for alternative dispute resolution and mediation services and although it is true, recently I was asked how much exactly can an individual save? I know for a fact mediation can save disputants time, money and stress, but how much exactly? This will of course depend upon the individual circumstances of each case but whatever the saving large or small, there will be a saving, he says!
Therefore I decided that the next case I mediated I would evaluate what financial and time savings if any the parties made by mediating rather than litigating, to ensure the figures were accurate, I decided I would ask the parties and their solicitors involved, how much they have spent thus far in terms of time and money, how much more time and money would be required to get to trial and what the likely outcome would be.
The next mediation that came up consisted of Mr A (name anonymous to retain confidentiality) taking a builder to Court because he claimed he owed him £50,000, for defective work that he had done to his property.
By the time they got to mediation; it had taken them 18 months, whereby Mr A had spent £28,000 and the builder £22,000 (£50,000 in total) in legal, Court and experts fees.
At mediation an agreement was reached and the builder paid Mr A £25,000, both paid their own legal fees.
To get back his original £50,000 Mr A had spent £28,000 on legal fees which totals £78,000, minus from that the £25,000 the builder paid him, therefore he was out of pocket for a total of £53,000.
The builder was out of pocket for £47,000 in total, £22,000 in legal fees and the £25,000 he paid Mr A as a settlement.
Had they mediated in the first place, both parties would have saved on their legal fees and saved 18 months of their time! The mediation was arranged within 2 weeks, it took 4 hours and cost each party £425.00 compared to the £47,000 in total it had cost them both in legal fees.
Had they continued with Court action, they both would have spent at least another £25,000 each and it would have taken at least another 4 months. Therefore by this point of 22 months (1 year 10 months) Mr A would have spent approximately £53,000 and the builder £47,000 in total £100,000 for a case that was originally only worth £50,000!!!
At trial one of them would have won the other lost, whereby the person who lost would have had to pay at least 70 per cent of the other persons legal costs and their own.
Therefore if Mr A lost he would have had to pay at least 70 per cent of the builders total legal costs approximately £32,900, his own legal costs of £53,000 as well as losing the original £50,000 he said he was owed, his grand total being £135,900!
If the builder lost he would have had to pay at least 70 per cent of Mr As total legal costs approximately £37,100 his own legal costs of £47,000 as well as the original £50,000 that he owed Mr A his grand total being £134,100!
For these reasons the Courts frown upon parties who do not try mediation before they take legal action, even if a party wins at Court, the Judge can penalise them on costs if they did not mediate, this came about after a number of high profile case rulings in the Court of Appeal.
Therefore it makes sense to mediate your civil and commercial disputes or any disputes rather than go through Court!
To answer the question I was asked, how much time and money can one save by mediating rather than litigating, I believe the simple answer is a lot, the above calculations are based on facts and the parties solicitors actual costs and estimated costs to get to trial and their view of what would be the implications of their clients winning or losing.
Despite the nature of your dispute, no matter how large or small, we have the expertise and experience to help you resolve it and save you a lot of money, time and stress.
Contact us now to discuss your needs. Telephone: 0800 246 1218 Email: firstname.lastname@example.org