A recent survey shows the insurance market sees personal injury mediation as an untapped resource, and the sector will grow significatly. Matthew Hirst explains
The development of personal injury mediation may be limited by the absence of mediation experience and skills among panel lawyersWhile the importance of mediation has been widely recognised in virtually all areas of dispute resolution, personal injury is an area which has not embraced mediation. The results of the first personal injury mediation survey of the insurance market, published this month, indicate a sophisticated understanding of the potential benefits of personal injury mediation.But there is a recognition that lawyers in particular were a group resistant to change.The results were in certain respects dramatic and not as polarised as one might have expected. Expectations for the survey, coordinated by DLA's insurance group in association with CEDR, were that while there would be isolated support, the dominant response would be either neutral or negative.The key findings were:
1. ExperienceAt this stage there is generally only limited experience of personal injury mediation on the part of insurers. Over 88% had taken part in five or less personal injury mediations and half of those had not taken part in any personal injury mediations.
2. The next 12 monthsOver 41% believed that they would be taking part in more personal injury mediations over the next 12 months.
3. LawyersOver 70% agreed or strongly agreed that it was very unusual for claimant lawyers to recommend mediation. Over 51% agreed or strongly agreed that it was very unusual for insurers' panel lawyers to recommend mediation. The latter finding will surely be a concern to those insurers supportive of mediation.
4. Key benefitsOver 62% agreed or strongly agreed that speed was a key attraction of mediation. Over 55% agreed or strongly agreed that legal costs savings were a key benefit of mediation. The majority therefore do not agree with those who argue mediation is expensive. Over 59% agreed or strongly agreed that the attendance of all parties was a key benefit of mediation. Over 44% agreed or strongly agreed that the possibility of additional remedies being identified at mediation was a key benefit.
5. Specialist skills Over 70% agreed or strongly agreed that mediation was an excellent platform for negotiations but required representatives to have distinct skills from the skills required in litigation. This is a particularly interesting finding in that it suggests the development of personal injury mediation may be limited in the short-term, not by insurers' perceptions, but rather by the absence of mediation experience and skills among panel lawyers.
The futureEarlier this month the Court of Appeal in Halsey v Milton Keynes NHS Trust considered some of the factors relating to whether a party's rejection of mediation would be unreasonable. Just as in the case of Hurst v Leeming , none of those reasons allows parties to reject mediation simply because a particular case is a personal injury dispute. The developments in procedure and case law over the last few years have overtaken the development of personal injury mediation. However, there are now clear signs that there is a real understanding of the benefits of mediation in a personal injury context. The survey will be carried out on an annual basis to chart the progress of personal injury mediation.In the surveys of 2005 and 2006, it is expected that experience of personal injury mediation will sharply rise and that insurers will not allow lawyers to prevent progress.