Commercial mediations are on the up, but increased competition in the market has caused earnings to drop by up to £44,000 for the most experienced practitioners, a survey by a leading provider reveals.
The sixth mediation audit undertaken by the Centre for Effective Dispute Resolution (CEDR) shows the number of civil and commercial mediations has risen to 9,500, a 9% rise since the last survey in 2012.
The survey’s 295 responses, representing half of the individual membership of the Civil Mediation Council, showed the market remains dominated by a few select mediators, although the size of that group has grown by 30%.
A group of 130 individuals are involved in 85% of commercial cases, in contrast to 2012 when just 100 individuals held 85% of the market.
Novice and intermediate mediators, who account for 44% of the market, reported involvement in no more than four mediations a year, while advanced mediators, who make up 56% of the market, undertook more than 10 a year.
A majority still combine their practice with another profession, with only 47% stating they are ‘full-time’ mediators, up from 39% in 2012.
The increased competition has led to a drop in fees. Average fees for a less-experienced mediator for a one-day mediation have fallen to £1,422, a 6% drop from £1,517 in 2012.
For more experienced mediators the average fees have fallen more sharply, dropping by nearly 11% from £4,279 to £3,820.
Annual income for the busiest mediators has fallen by up to £44,000. Those undertaking over 50 cases a year have seen their earnings drop from around £414,000 in 2012 to £370,000.
For those taking between 30 to 50 cases a year, earnings have dropped from £145,000 to around £128,000, while those taking between 20 and 30 cases have seen a sharper fall, with fees dropping from £90,000 to £70,000 a year.
The survey, published as the justice minister Lord Faulks urged parties to make greater use of out-of-court resolution, indicates the mediation process has a high level of success. Just over 75% of cases settled on the day, with another 11% settling shortly afterwards, giving an aggregate success rate of 86%.
Parties looking to resolve family disputes are, since last month, obliged to attend a mediation information session before starting the court process.
The CEDR survey shows support among the majority of mediators (76%) for a more ‘directive’ approach to promoting meditation, although only 15% support a fully mandatory system.
The jury is still out on the Jackson reforms’ impact on mediation numbers – the majority of respondents reported it is too early to gauge.
Looking to the future, 32% of respondents expect to mediate more, although it would still not be their main occupation. The most growth in the sector is expected to be in employment and workplace mediations.
Statistics taken from CEDR’s caseload indicate the value of cases mediated each year is approximately £9bn, up from £7.5bn in 2012.
It estimates the process saves businesses around £2.4bn a year in wasted management time, damaged relationships, lost productivity and legal fees.