Transforming Dispute Resolution in Scotland – John Sturrock
“I wish we’d had this conversation a year ago.” This remark, or language expressing similar sentiments, is probably the one I hear most in my professional role.
For the past twenty years, my primary occupation has been to act as a mediator, assisting and indeed empowering parties who are involved in complex commercial, business, professional, personal or policy disputes to reach a mutually acceptable outcome among themselves. Often this is achieved in one day, even in long-standing disputes.
The remark above is usually offered in frustration, often with regret, sometimes in anger. “If only…we’d sat down and talked about this at an earlier stage, we could have…
- understood your side of the story better and what really matters to you and us
- assessed the risks on all sides more objectively
- got this sorted quickly, found a solution and been able to deliver/move on/make changes
- maintained what had been a good business and/or personal relationship
- saved so much in time, hassle and resources which could have been used in a much more productive way
- avoided the legal and other costs which have been greater than the real value of the dispute.”
Fortunately, many of these outcomes are still regularly achieved in mediation, especially if it is utilised as early as possible when disagreements arise. Nipping things in the bud makes such a difference.
Abraham Lincoln famously advised: “Discourage litigation. Persuade your neighbours to compromise whenever you can. Point out to them how the nominal winner is often a real loser – in fees, expenses, and waste of time.” Wise words indeed.
And yet, in Scotland, mediation remains a rather marginal activity. We still see many commercial and civil disputes heading down the path of litigation (or other tribunal proceedings) with often disproportionate costs in time, money and damage to relationships – and deployment of polarising win/lose, right/wrong strategies, where those involved are obliged to take and support opposing positions. Sometimes one wonders if putting people through the court process, and regularly exposing them to past events which have caused them pain while revisiting adverse situations, is a form of trauma.
In any event, while millions of pounds and people-hours are devoted to the civil justice system, only a very small percentage of court cases (perhaps no more than 5%) are actually decided by judges. The remainder are eventually settled before a final judicial determination is made but there is a cost to being caught up in unresolved adversarial proceedings, with their limited binary and uncertain outcomes. The effects can be damaging (directly and indirectly) to the business, the organisation, the community and the people involved and ultimately to the economy. Except in a few important cases where an authoritative decision by a third party is necessary, going through the adversarial process can be an unproductive use of the assets of those involved and of the public money invested in the system. And, being essentially backward-looking, it often doesn’t address what really matters, the real underlying issues.
Of course, many people cannot afford to use the court system at all. When they do, some of the costs incurred in reported cases are mouth-watering. Just think of some of the recent cases seeking a judicial review of Scottish Government actions. As a mediator, I have lost count of the number of situations where the settlement amount agreed in mediation is less than the total legal costs incurred to date and where costs have become the major sticking point.
What Can We Do?
Einstein observed that doing the same thing over and over and hoping for different results is a form of madness. So, what needs to change? Default to a court, arbitrator or adjudicator should only be a last resort. The goal should be to take out of the formal justice system as early as possible (or remove altogether) as many as possible of those disputes which consume time, resource and money and yet are ultimately settled by agreement, very often after considerable expense has been incurred, not only by the public purse but by litigants, businesses, funders, insurers and others.
Even in the really tough cases, we need to help people to look forward and find mutually acceptable outcomes. I suggest that we need an approach to dealing with difficult disputes and disagreements (i.e. those which are not resolved fairly readily by straightforward communication) in which we encourage early and constructive discussion and resolution by negotiation. Even before going to court is considered, we should do what we can to avoid disagreements and differences from escalating unhelpfully.
For a recent example, I note that, in its report into the construction and procurement of the CalMac ferries, the Rural Economy and Connectivity Committee of the Scottish Parliament pointed to the weakness of the dispute resolution mechanisms, including the provision for appointing a mediator, hampering the prospect of trying to find an early solution and arguably leading to so much additional cost. We need to manage a whole range of issues like these better in future, especially in the public sector.
Logically, by placing much greater emphasis on trying to find an agreed outcome to any dispute, we will help those involved to address what really matters. Such an approach also promotes better communication and taking responsibility (rather than deferring to an outside party to decide), while restoring autonomy and maintaining control over the outcome, all of which are at the heart of good decision-making. It gives the parties, the people affected, involvement and choice. Sometimes, though, this is not so easy. Those parties (and perhaps their legal advisers) can get stuck for all sorts of understandable reasons. One way to extend and enhance the negotiation process is to seek assistance in the form of mediation.
Mediation as Added Value
Mediation’s added value is the involvement of a skilled independent facilitator in the ongoing discussions, someone who can help people meet and talk, get under the surface, understand and overcome the cognitive biases, psychological barriers and other causes of impasse, identify and assess the options for achieving realistic and useful outcomes, benchmark against the consequences of not reaching agreement, and focus on what precisely is needed to achieve practical delivery of whatever is agreed.
In a recent dispute arising in a construction project, for example, the claim in question was resolved in mediation by agreeing a series of potential future contracts which would generate value for an employer in excess of losses in the immediate claim and secure a flow of work for a supplier which had been blacklisted. Then there was the farming family, whose business was facing a difficult future, which resolved a serious inter-generational problem about succession when the younger members of the family used the mediation day to demonstrate to the older folks that the time had come for responsibility to be handed over. And the Scottish flagship business trying to introduce new production processes and wishing to take the trades unions with it, where a day of mediated conversations began the vital process of rebuilding trust, with clear communication, acknowledgements of past mistakes, reassurances about future job prospects and agreement to work jointly on new plans.
Mediation is well established in many parts of the world, not least south of the border where senior judges have recently re-emphasised its importance as an integral part of the dispute resolution process, observing that the focus needs to be on resolution rather than dispute. There is talk of a mandatory good faith obligation to try to resolve or narrow a dispute.
The UK Ministry of Justice has said that it wants to “support people to get the most effective resolution without devoting more resources than necessary – financial, intellectual and emotional – to resolve their dispute.” They add a call to “mainstream non-adversarial dispute resolution mechanisms, so that resolving disagreements proactively and constructively becomes the norm”. The UK Government’s recent consultation on ‘Reforming Competition and Consumer Policy’ includes proposals to increase the uptake of processes such as mediation as a way to support consumers. NHS Resolution in England and Wales emphasises the use of mediation to address medical claims. There is now an international mechanism (the “Singapore Convention”) for enforcement of mediation agreements.
Mediation and Dispute Resolution in Scotland
However, after a bit of a flourish a couple of years ago with publication of a report optimistically entitled ‘Bringing Mediation into the Mainstream in Civil Justice in Scotland’ which made numerous proposals, some of us worry that Scotland is falling behind. This is important for many reasons, including that those who have disputes to resolve may go where the system appears more flexible and progressive. Others may end up with sub-optimal outcomes. Businesses, communities and the economy may end up worse off at a time when we need to be maximising our use of resources. Past research indicates that the price of unresolved conflict is high – it has been estimated that it costs UK business over £30bn a year, takes up 20% of leadership time and results in the loss of 370 million working days. By comparison, recent estimates in England and Wales suggest a £4.6 billion annual saving from quicker and more effective resolution of commercial disputes through mediation.
In Scotland’s Programme for Government, it is said that: “The Scottish Government will work with stakeholders to expand the availability of mediation and arbitration services within the civil justice system. The Scottish Government is working with stakeholders, and will consult on future changes as appropriate, to give people access to flexible, affordable and less stressful means of settling disputes, benefitting them and saving time in courts.” These words are just what we need to hear but actions speak louder. A form of consultation process has actually been going on for several years. There are some specific examples of welcome changes occurring in Scotland but overall the pace of change remains slow. Of course, change will come not just from Government and the courts but also from business, the professions and better education.
Thinking about the court system, one question, perhaps for Audit Scotland, is how should limited public money and resources be deployed to help achieve efficient dispute resolution? Should parties to a dispute be required to try mediation before engaging the costly civil justice system? In England and Wales, as elsewhere, that proposition is now accepted. Experience and research show that successful outcomes are achieved in the large majority of mediated matters, so this makes sense especially when, as noted above, the costs of litigating are often disproportionate to the sums in dispute in a case.
This is not to suggest that parties can be compelled to come to an agreement in mediation, only that they may be required to try it. Parties at all times retain the choice to refuse to reach agreement and to return to a court if they wish to do so. As one observer commented, making mediation mandatory “does not guarantee that cases settle, but you do create more opportunities for the rational assessment of litigation risk and to agree on remedies that the courts cannot provide.”
However, this is not just about compulsory mediation. Overall, it would make financial sense to devote more resources to prevention at an early stage of unnecessary litigation, and indeed unnecessarily prolonged disputes in general, in order to reduce the disproportionate expenditure incurred at the later expensive stages. Investment in early-stage resolution, including encouraging more skilled approaches to negotiation and mediation, could save millions of pounds in Scotland and in turn generate greater productivity and value. In many countries and in many states in the US for example, the civil justice system leads the way in innovative measures to reduce the use of courts. This also frees up courts to handle quickly and effectively those matters which can only be decided by judges. We could do the same in Scotland.
This is fundamentally about our culture and how we ensure that difficult disputes and disagreements can be resolved quickly, cost effectively and constructively, especially post-pandemic. The pandemic has placed huge demands on the civil justice system. With its speed, relatively low cost and easy delivery using online platforms, mediation offers a way through a backlog of unresolved cases, with much less use of resources. However, it is important to emphasise that the benefits of mediation are far wider than merely saving public expenditure and that mediation is not just a way of reducing the cost of courts in Scotland.
Mediation also offers a route more generally to meaningful engagement, better relationships and creative outcomes in all sorts of difficult situations. It provides access to dispute resolution for many of those who cannot afford to pursue matters in a court. And dealing with disagreements and disputes quickly and efficiently is also an environmentally friendly choice. It fits with building a greener economy and with aspirations to meet sustainable development goals.
An encouraging recent development has been the incorporation of mediation, as part of a wider commitment to promoting collaboration and the avoidance of disagreements, into the latest proposals for handling inter-governmental relations in the UK. That mediation is recognised as offering a valuable means to reduce political tension is a useful step forward.
In the context of criminal justice, the Cabinet Secretary for Justice recently wrote about strengthening and modernising the justice system and delivering justice services which meet our needs in a modern society. This surely applies equally to civil justice. In 2021, Iain Smith wrote a piece for Reform Scotland in which, based on his experiences of the failure of – and trauma related to – conventional approaches to crime, he called for a smarter criminal justice system with long term solutions which were not simply characterised as “soft” or “hard”. Again, surely such an enlightened approach pertains just as much to civil justice.
- promoting earlier, more effective and more efficient resolution of disputes and disagreements in Scotland will be good for the economy, civil society and communities, not least in aligning with health and wellbeing objectives and the National Performance Framework.
- better education in negotiation skills and embracing the use of mediation for matters of importance to business, the public sector and the workforce will bring useful social and economic benefits, better financial returns and increased productivity. This could be vital to the delivery of any national strategy for economic transformation.
- active encouragement of mediation by the courts in Scotland to promote earlier settlement of cases and incorporating the use of mediation in appropriate Scottish Parliament legislation will add to the impetus.
- commitment by the Scottish Government, local government and other public sector bodies to endeavour to resolve disputes in which they are involved by using skilled mediation wherever possible could make a real difference. That might include some of the most challenging and sensitive policy issues which attract so much attention these days and which tend to dwell on polarised positions. Constructive dialogue is needed – and possible.
“I wish we’d had this conversation a year ago.” Disputes and disagreements will always be with us. Fundamentally this is about how we in Scotland choose to deal with them. We really need to act now. If we do, we’ll perhaps have those difficult conversations at the time when they will be most useful. And with those conversations will come better outcomes.
As one senior participant commented during a mediation: “I’ve never experienced anything as tough as this dispute in my professional career. But I am glad we met today. They completely changed my perception of people like this. They obviously want this finished. I think we can get something sorted. It will be a relief to put this behind us. It was good to actually meet and talk.”
John Sturrock QC is Founder and Senior Mediator at Core Solutions