Does mediation offer a route out of the justice crisis?

Almost half of commercial brokers are seeing demand for LEI growing

Does mediation offer a route out of the justice crisis?


By Andy Talbot

This article was provided by Andy Talbot (pictured), head of sales & marketing at ARAG UK

While many of the problems the world has endured over the past two years seem to have paled in the light of Russia’s invasion of Ukraine, the huge social and economic consequences of the pandemic will only be worsened by the dramatic events unfolding in Europe.

While few can be unaware of the impact that COVID-19 has had on education and the NHS, the implications for our courts and wider judicial system have been less widely documented. Only those who work in the legal sector or who have had cause to use it are likely to comprehend the growing justice crisis.

Courts and tribunals in crisis

Following a decade of cuts and closures, the lockdowns and other limitations to legal processes caused by the pandemic have lengthened the backlogs of cases that were already plaguing the courts.

During the final quarter of 2021, for fast and multi-track cases, the time between issuing proceedings and reaching a trial averaged almost 18 months. Even the Small Claims Court was faring only slightly better, with the average time between proceedings being issued and a hearing still stretching to about a year.

The available data for the employment tribunal system is not up-to-date but waiting times for tribunal dates are similarly lengthy. By the end of 2020, there were already 44,479 single claims outstanding.

All this comes at a time when demand on our judicial system is growing. The economic pressures on families and businesses are mounting by the day. Supply chain issues, labour shortages, rising energy costs and a myriad of other factors, have had a broad impact and all have the potential to create legal problems.

Awareness and demand for legal protection grows

The legal risks that businesses in particular are facing are mounting and diverse. As well as disputes with employees or over contracts with suppliers and customers, commercial debts are taking longer to be settled and HMRC is looking for every opportunity to recover its huge expenditure on furlough and other pandemic support mechanisms.

It is unsurprising then, that awareness and demand for legal protection appear to be on the rise.

ARAG recently commissioned some independent research, in which nearly half of commercial brokers asked said they’d seen demand for legal expenses insurance grow over the past year and even more (56%) think it will grow further in 2022.

Looking specifically at Employment Practices Liability (EPL) cover, the trend is even clearer, with over two-thirds (70%) of brokers saying that demand had increased and a similar proportion (72%) saying that they expected it to increase further.

Brokers’ experience and forecast is supported by our own experience at ARAG. While we had expected the number of commercial risks we insure to take a hit during the pandemic, as many small companies went out business and others tightened their belts to help weather the storm, ARAG now insures over 20% more businesses than in 2019.

While claims have yet to spike quite as much as we expected, largely due to the extension and tapering of the furlough scheme, it is clear that businesses recognise the broad benefits that legal protection has to offer in such uncertain times.

Use of our legal advice helpline skyrocketed during the first phase of the pandemic and, while legal expenses insurers can do little to resolve the backlogs in the courts and tribunals, helplines and support services like legal document building tools can help resolve some issues without litigation, and policyholders avoid the uncomfortable situation of watching legal bills mount while they wait for a hearing date.

Mediation over litigation

ARAG has always supported the use of mediation and other forms of alternative dispute resolution (ADR) in trying to resolve legal disputes. In normal times, ADR typically offers a much quicker, often cheaper and generally more amicable route to justice. Those benefits have only increased in the current circumstances.

Mediation is obviously a finite resource too, and subject to many of the same pressures, like staff shortages and isolation constraints, as with the rest of the judicial system. However, ADR still offers a much quicker path to resolving a legal dispute than going to court.

While it is not completely compulsory, in some cases such as employment claims or family matters, it is mandatory to at least consider some form of ADR and, if a case does reach a courtroom, judges can take a dim view where a party has refused to mediate without good reason.

While mediation is not going to resolve the long delays to our court processes on its own, its use is only going to grow and offers parties in dispute an often better and certainly quicker way of getting on with their lives.

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