All-Party Parliamentary Group on Alternative Dispute Resolution (ADR)
Notes: Public Sector ADR and AGM
30 January 2017, 15:00-17:00, Committee Room 17, Palace of Westminster
Chair of the session: John Howell OBE MP
Attendance
Parliamentarians
John Howell OBE MP
Robert Neill, Chair Justice Committee
Christina Rees MP, Shadow Justice Minister
George Kerevan MP
Nick Thomas-Symonds MP
Jeff Smith MP
Non-Parliamentarians
Donal Galligan, Director, Ombudsman Association
David Liddle, CEO, TCM Group
Graham Massie, Chief Operating Officer, CEDR
John Pugh-Smith, 39 Essex Chambers
Chris Reeves, Founder, Mediation for Construction
Caroline Sheppard, Chief Adjudicator, Traffic Penalty Tribunal
James Walker, CEO, Resolver
Chris Wilford, CIArb Head of Policy, Public Affairs and Research
In addition, there was an invited audience of ADR and public policy experts.
Introduction
1. The APPG on alternative dispute resolution (ADR) was launched in November 2015 to help change the culture of dispute resolution in the country by providing a valuable forum within Parliament to discuss the latest developments in ADR and to promote its wider use.
2. ADR mechanisms are a range of procedures that serve to resolve disputes generally involving the intercessions and assistance of a neutral third party. ADR mechanisms include arbitration, mediation, adjudication, expert determination and online dispute resolution (ODR). They provide a cost-effective and faster alternative to costly and time-consuming court process.
3. This session provided an overview of public sector ADR, current trends in the sector and how forms of ADR relate to each other and the courts. The AGM of the APPG on ADR will be held at the start of this session with a new Officer team elected.
4. Parliamentarians then questioned speakers and audience members on a variety of topics as well as shared their own thoughts on a constructive way ahead.
Key points
5. Graham Massie, Chief Operating Officer, CEDR, spoke about what is currently happening in the mediation field, within the context of NHS. He started by making reference to the Alder Hey settlement from January 2003 (scandal regarding children’s organs), where the families accepted £5m. He highlighted that this settlement has been brought by the CEDR mediation team over a period of 18 months with one week of mediation proceedings. He used this example to show what would have been the alternative and namely, court proceedings, associated high costs as well as stress and the entire situation would have been made worse for the families involved. In this particular case, mediation created a far more pleasant alternative. Aside the money, it also brought a formal apology from the hospital as well as a memorial plaque. This is also a classical example of what is needed within the NHS community, because the issues which arise are different from the B2B contracts.
6. Graham noted that the compensation scale in NHS litigation is very high. The total exposure to settlement amounted to £56.4 billion last year, with NHS having settled 17,000 value driven claims. He then touched upon the adversarial nature of proceedings, stating that in normal clinical negligence claims, only 45% of the damages go to the Claimant, with 1% of the cases actually going to court, because the other ones are settled. Graham explains that this is the reason why CEDR has promoted mediation dealing with clinical negligence claims.
7. Graham continued his speech by looking at the result achieved through a pilot mediation scheme in high complexity death-related cases. 47 mediations took place, out of which it appears that 61% of the cases settled on the same day, with 81% settlement rate in total. The reasons given relate to what Claimants are looking for when pursuing clinical negligence claims and namely:
a) Justification for what went wrong
b) Assurance this will not happen again
8. David Liddle, CEO, TCM Group, focused on the notable challenges faced by ADR, as the “UK’s best kept secret”. Some of these challenges are as follows:
a) Risk adverse in reactive culture dispute resolution (reliance on damaging rules and procedures);
b) Lack of focus on the role of mediation and ADR as part of the wider labour community;
c) Significant lack of meaningful research in the field of ADR and its benefits;
d) Lack of meaningful guidance from the central Government;
e) Risk adverse legal framework;
f) Lack of focus on collaborative processes;
g) Lack of use of mediation, due to lawyers earning substantial amounts via litigation;
h) Lack of meaningful training in soft skills;
i) Lack of coherent conflict management strategy;
j) Lack of awareness of the field of ADR, more generally.
9. David noted that these factors have an impact on the wellbeing of the employees and their relationship with customers. In this sense, one of the solutions offered focused on an ADR movement set by Government, rather than just relying on institutional support. Organisations should be encouraged to adopt resolution policies and not grievance procedures. He further stated that as part of the solution, organisations should be encouraged to undertake research into the greater role of ADR. There should be greater investment in the public sector and soft skill as well as greater collaborative law as opposed to court proceedings. Finally, he noted that there should be greater focus on collaborative projects across the UK.
10. Caroline Sheppard, Chief Adjudicator, Traffic Penalty Tribunal, started by stating that even though she represents an appellate body, they share the same views. Essentially, they adopt the same core values and namely: accessibility, proportionality, tone, transparency, velocity and finality.
11. She stressed that the tribunal has always been for the user. Having done that, they now promote an online appeal system. She noted that the appellate body and the other institutions present at the discussion share the same four actors in the proceedings. Caroline further made reference to the accessibility of the online appeal system, which has helped speed up the resolution process. She stated that, most importantly, this online system took away the adversarial nature of the process. The main reason behind this is that people can actually communicate in an easy way and this removes the conflict element from the process. Furthermore, she noted that with everything being online, it is easier for things to be dealt with in an expeditious manner.
12. Finally, decisions can be now seen, which is perceived as an improvement from the previous binary system. Caroline stated that nearly all the work reached a resolution through the online system. Consequently, they have registered 27,000 cases/year, out of which 45% closed in 14 days and the remaining ones in 28 days. The cases that required 28 days are usually the ones that involved a hearing.
13. James Walker, CEO, Resolver, introduced the work of Resolver and noted that it has helped 600,000 consumers recover their money in a two-year timeframe. He continued by explaining that when something goes wrong, it is usually the case that people do not have access to perfect information. Trying to reverse engineer the process, James stated that they look into resolving the issue from its early stages, when it is still just a complaint. The logic behind this is that something that goes to court is probably a dispute, which starts from a complaint and therefore, consumers need to be assisted at the complaint stage. Once they come to Resolver, consumers are informed about their rights, they are assisted with communication, they are reminded what to do and when as well as if the complaint cannot be resolved they are guided to the right ombudsman service.
14. Making note of Caroline’s approach, James acknowledged the benefits of an online system. At Resolver, the machine learning system is being used to predict the outcome of a case with an 80% accuracy rate. James concluded by saying that their approach to dispute resolution focuses on how they can relieve the burden on the public sector by improving the access to dispute resolution to all consumers on the market.
15. Donal Galligan, Director of the Ombudsman Association, referred to the ombudsman as a form of ADR, highlighting that it would not deal with a case if it is better suited for court resolution. He further noted that one important feature of the ombudsman is that lessons learned are shared widely, in an anonymous way. He explained that the work done by an ombudsman to resolve complaints without the need for a formal investigation would be better described as early/informal resolution than ‘mediation’, underlining that there is a 99% compliance rate with the recommendations. The ombudsman is the final stage in a complaints process, which can in turn be judicially reviewed. Donal stressed that health cases are more complex, due to the issues that arise and these aspects increase the time necessary to deal with them. He then moved on to speak about the structure of the ombudsman in the UK and provided statistics for each of the bodies. With respect to the six ombudsman bodies, he noted that the one in Northern Ireland is perhaps the most modern one. Their legislation came into place just last year and has a wider coverage.
16. Chris Reeves, Founder, Mediation for Construction, spoke about restoring the balance with negotiation rather than litigation in the construction industry. He stressed that construction is important for the following reasons:
a) It amounts to 7% of the UK GDP;
b) ¼ of the output concerns the public sector;
c) It encompasses 3 million jobs.
17. He continued by explaining that the UK construction industry is criticised for being wasteful, adversarial, dominated by singular disciplines, fragmented and reluctant to innovate. There have been a number of Government strategies to try to combat these aspects. The catch is to try and reduce the costs by 20%. Based on the numbers, it can be said that from the Government’s point of view, construction is quite important.
18. Chris relied on a report by Jackie Gregory-Stevens, based on 20 case studies and 357 usable responses drawn from the industry. He made the following points:
a) Dispute resolution in the construction industry is unique. Expanding on the issue, he stated that adjudication is an adversarial process and even though it is described as ADR a third party comes to decide the case. This doesn’t bring true with the idea of mediation. Chris further acknowledged that adjudication has become mini-trial, where costs have become a real concern. Moreover, the process has become very legalistic and prohibitive to many in the sector;
b) It fuels the claims culture in the sector and it benefits the consultants;
c) There is extremely low use of mediation in the sector, despite the encouragement to mediate for construction and engineering disputes;
d) Lack of detailed knowledge of mediation;
e) In the context of public sector contracts, a potential barrier through accountability regarding how settlement is reached has been perceived;
f) Mediation aligns with a collaborative culture and is considered by many to be a better method of dispute resolution.
19. John Pugh-Smith addressed the rise of mediation in public law. He referred, among others, to the Wolf Reforms and the Dispute Resolution Commitment from 2011, noting that £360 million of Government money has been saved just in terms of Government disputes. He explained that current research shows that whilst there is a high success rate in terms of settlement, in terms of matters that come to court, judges seem to be reluctant to stay proceedings in favour of mediation or other facilitative proceedings.
20. He continued by highlighting the high costs associated with court proceedings, which have led to an increase in promotion of mediation.
21. John further made note of mediation in planning, referring to the Guide endorsed by Bob Neill MP. He stressed that if successful, mediation delivers greatest benefits the earlier it is used. However, he added that a failed mediation rarely leads to a second attempt. Looking at the future, John noted the following:
a) The disparity of practices, provisions and their use;
b) Moving mediation up-stream? (use of mediation techniques in the decision-making process);
c) Public law mediation moves easily between the administrative and judicial spheres.
Finally, John drew the following conclusions:
a) Mediation has now been tried and tested in many spheres;
b) There are opportunities to apply it to most parts of current land-use system as well as related areas;
c) There is a growing interest, but still relatively little experience throughout UK;
d) Some good experiences to learn from with more in the pipeline;
e) Encouragement to the Governmental legal departments to use mediation more actively;
f) Need to make people aware of the costs savings and restauration of relationships when it comes to ADR.
Summary
22. The session concluded with a wide ranging discussion about costs and the fragmented nature of the sector. ADR has a greater degree of penetration in the public sector than in other areas but it is clear that even greater use could be made. John Howell OBE MP and Christina Rees MP particularly welcomed the work of the group at the end of its first year and looked forward to further work.
23. The group has not received over £12,500 from outside Parliament in money or in kind for its reporting year therefore an income and expenditure statement was not required for approval. The new Officer team elected at the AGM consists of:
• Chair and Registered Contact: John Howell OBE MP (Conservative)
• Vice-Chair: Christina Rees MP, Shadow Justice Minister (Labour)
• Vice-Chair: Robert Neill MP, Chair Justice Committee (Conservative)
• Treasurer: George Kerevan MP (Scottish National Party)
• Officer: Nick Thomas-Symonds MP (Labour)
• Officer: Jeff Smith MP (Labour)
• Officer: Alberto Costa MP (Conservative)
All-Party Parliamentary Group on Alternative Dispute Resolution
Chair and Registered Contact:
John Howell MP, House of Commons, London, SW1A 0AA. Tel: 020 7219 6676. Email: .
Public Enquiry Point:
Chris Wilford, Chartered Institute of Arbitrators, 12 Bloomsbury Square, London WC1A 2LP. Tel: 020 7421 7485. Email:
This is not an official publication of the House of Commons or the House of Lords. It has not been approved by either House or its committees. All-Party Parliamentary Groups are informal groups of Members of both Houses with a common interest in particular issues. The views expressed in this document are those of the group.
Sabina Adascalitei, CIArb Research and Academic Affairs Coordinator 4