The Price of Inertia

They say that death and taxes are the only certainties in life. The collapse in family mediation following changes to legal aid comes a pretty close third.

In 2013/14, publicly funded family mediation fell by almost 40% and for the first time ever more parents went to court to contest child matters without a lawyer than with one.

The fall in mediation – in a year when the government expected it to boom – comes at a huge cost to both impacted families and society at large. Helping separating parents communicate with one another at a time of conflict is a public good and the most cost-effective way of reaching agreement. Of those couples that did find their way to a family mediator in 2013/14, almost eight out of ten reached agreement.

To scale up such outcomes – and repair the damage its policies have caused – the Ministry of Justice (MoJ) set up a mediation taskforce earlier this year. It is about to publish its final proposals that will almost certainly call upon MoJ minister Simon Hughes to put some money back into the system. With a £17 million annual under spend for family mediation in 2013/14, there should hopefully be some room for manoeuvre.

This is certainly the view of National Family Mediation which last week broke ranks to call for all Mediation Information & Assessment Meetings (MIAMs) to be made free of charge for everyone.

But will making such meetings free for all be sufficient to tip the scales in favour of mediation? For a start, it is often overlooked that separating couples are in crude terms one-time shoppers making a distressed purchase. And that’s if they make a purchase at all. Lopsided kitchen table deals or representing oneself at court are far less expensive in cash terms than hiring professional help: lawyer or mediator.

It also begs the wider question of what the mediation taskforce is trying to achieve? Simply asking the MoJ to splash some cash to restore family mediation to pre-April 2013 levels would be disingenuous in the extreme. It was after all the MoJ that held up family mediation as its preferred means of filling the vacuum created by removing legal aid from lawyers.

But that implies pre-April 2013 measures to promote family mediation were somehow fit for purpose. We used the Freedom of Information Act to find out that in 2012/13 more money was spent on MIAMs than mediation itself. This may have kept afloat some mediation services but this is a poor return for both separating families and taxpayers alike.

It’s not hard to work out why. In 2012/13 – the last full year before changes to legal aid – the government compelled lawyers to refer all legal aid clients on to a publicly funded mediator as a condition of the same lawyer accessing the next (and major) tranche of legal aid. As a result, 62,390 compulsory referrals were made to publicly funded mediators (83% of total referrals). Yet in the same year only 13,609 mediations got underway.

The data shows that clients simply boomeranged back to their referring lawyer to pursue lawyer-led alternatives such as publicly-funded representation at court. As such, one could argue that referred clients – but particularly their referring lawyers – had no incentive for mediation to happen. And that’s before we even get to the holy grail of mediation: getting the second member of the couple to participate!

Recognising this the MoJ removed the bulk of legal aid funding from referring lawyers and put an additional £10 million aside to fund the anticipated expansion of mediation as a front line service. And so the link between referring lawyer and recipient mediator was cut.

It’s been a total disaster: far from filling the vacuum, mediation numbers plummeted by almost 40% and a record number of low-income mums attended court without a lawyer for child proceedings. For the first time, they outnumber unrepresented dads.

Those that did find their way to mediation in 2013/14 fared much better. As stated above, almost eight of 10 people that began publicly funded mediation in 2013/14 went on to reach agreement. That’s pretty impressive given mediators spend their days working with high conflict couples reeling from low levels of trust.

It also throws up what ought to be termed the mediation paradox. Mediation is effective at helping separating couples reach agreement because the approach is voluntary and the mediator impartial. The results are transformative because clients are empowered to take responsibility for resolving their own dispute. The mediator acts as a skilled guide, clarifying and exploring the issues, developing options and helping the parties secure agreement.

Sounds great, doesn’t it? But how does that play out when used as a marketing message? Here’s a genuine tweet promoting mediation from earlier this year:

“We never take sides/give advice, but help people negotiate with each other constructively”

As marketing messages go, you may as well include the address of the nearest family court. Most people experiencing relationship breakdown will likely be repelled. Hence the paradox.

That’s because people want a service that constrains the behaviour of the other party and they want to talk to someone who is on their side. This neatly explains why family lawyers are – and family mediators aren’t – to be found on the nation’s high streets paying rent and business rates.

Now, that’s all well and good if parties can afford to pay upwards of £200 per hour (plus Vat) for two lawyers to resolve their dispute for them. They may still end up mediating at some point since some lawyers sometimes suggest mediation further down the line. There is good reason for this: unless both parties are in similar state of emotional readiness, mediation will likely be resisted by one or both parties despite the savings and benefits described to them.

This is because the party initiating the divorce or separation is likely to have gone through what relationship therapists call the “loss curve” while still in the marriage/relationship. This is often not the case for the party on the receiving end of their partner’s decision to leave them. There’s an entire spectrum of emotions that mark out the transition from shock/numbness to acceptance/moving on.

Riding out the loss curve is of course no less painful whether rich or poor. But at least those with the resources can afford the hired help to negotiate or advocate on their behalf. How many millionaires go to mediation?

But this does nothing to tackle the enduring market failure that family law services are priced beyond the means of most people that need them. But instead of developing multidisciplinary services capable of meeting that demand on more affordable terms, we have high profile lawyers displaying a spectacular lack of imagination by demanding a return to legal aid for fighting their client’s corner at court.

This self-serving mantra gives the lie that all things emotional are set in stone and that only court can bring the other party to heel. Never mind that going to court takes months, is fraught with uncertainty and is sure to leave a bitter taste in one party’s mouth, if not both.

It gets worse: rather than lawyers and mediators aligning themselves to sell more affordable family law services, publicly funded lawyers have reacted to the withdrawal of legal aid by monetising lower-income clients on fee paying terms. These are couples the MoJ intended for publicly funded mediation.

Rather than refer them on to mediation, lawyers sell “unbundled services” to clients who cannot afford lawyer-led options. These are small freestanding modules of work such as filling out the divorce petition, compiling financial disclosure and preparing submissions for court. But ad hoc lawyer input is not the stuff of dispute resolution which requires skill, structure and momentum.

Privately, many lawyers express frustration that unbundled services fail to bring them into close enough proximity to have a positive impact. There is also the argument that unbundled services are doing nothing to dampen the incentive to litigate in person since clients can take advice between court hearings.

But don’t go blaming the lawyers for diverting families from publicly funded mediation. Currently, the MoJ currently pays lawyers a paltry £150 to advise a client once mediation is underway. Is it any surprise that the legal aid bill in 2013/14 for lawyers advising clients at publicly funded mediation was just £17,040. Not one family lawyer in London claimed public funds for doing this.

This should be ringing alarm bells in Whitehall. For decisions to be truly informed at mediation, clients should seek independent legal advice in parallel. This takes on particular resonance now that the MoJ insists everyone taking legal action against their ex-partner first meet with a mediator before being allowed to file court papers.

Expect to see a surge in the number of MIAMs taking place. This is of little consequence though as 2012/13 referrals make plain. It is the conversion to mediation that matters. Again, there are huge clues in the mediation data.

Lets take the MoJ’s preferred starting point for evaluating conversion to mediation. In 2012/13, 30,662 assessment meetings took place where both members of the couple responded to the mediator’s invitation.

Of those 30,662 assessments, less than half (44%) converted to mediation. Contrast this with the same stat in 2013/14 when there was no compulsion being applied by the MoJ to non-aligned referring lawyers. Almost two-thirds (63%) of assessments converted to mediation when both parties were willing to give the mediator a hearing. And of that figure (8,400 couples), almost eight of ten (6,613) went on reach agreement.

While absolute numbers were admittedly smaller in 2013/14, more efficient conversion to mediation underlines both members of the couple had an interest in attending. This could be about saving money, avoiding court or trying to do the best by their children. It does not matter. The timing for mediation was right meaning there was some willingness for the mediator to work with.

For starters the MoJ might want to Google “emotional loss curve” and acknowledge that until such time that lawyers and mediators are commercially aligned the psychology of willingness cannot be effectively incubated by family law services at a price most people can afford.

This is because the role of lawyers in converting clients to mediation is woefully unrecogised to the point of willful blindness. It’s depressing since lawyers themselves could be growing the market for their wares by selling more affordable hybrid services where mediation houses much of the risk.

Legal advice plus the cost of mediation is about half the price of hiring the same two lawyers to broker an out of court settlement. Given publicly funded family lawyers didn’t attract private clients of this ilk to start with, it’s a mystery why more haven’t grasped the potential of teaming up with local mediators to offer an end-to-end service offering a higher return than unbundled fees but still undercuts the private client lawyer down the road.

Moreover, lawyers can easily fix the price of advice/drafting in support of mediation giving separating partners an additional incentive in the guise of price certainty where previously there was none.

Above all, commercially aligned lawyers mean the loss curve can be better managed among less affluent separating families. For starters, ownership and choice can be allocated to each party. The lawyer advising the initiating party is ideally placed to explain the advantage of granting their ex-partner a period of time to engage in mediation, not least because the alternative options are priced too high for the lawyer to suggest. Hence the advising lawyer has a commercial interest in mediation being considered.

But if mediation is going to be considered the second party clearly needs to feel some reassurance and ownership if they’re going to engage. In other words: symmetry. They also need someone in their corner – a similarly aligned advising lawyer – who can reassure them that exploring mediation is not about them being “hoodwinked by the other side”. They also need to be granted some ownership over proceedings so why not structure the hybrid service so that the second party chooses the mediation provider on behalf of the initiating party?

None of the above is rocket science. It is inertia on the part of lawyers and mediators that continues to hold back the development of services that respect both the pocket and emotional state of most separating families. At best, handing out free MIAMs for all is a time limited smart subsidy in the name of market making. In reality, it will just see the UK’s non-aligned family lawyers respond with “free initial meetings” of their own. And so it goes. Has 2013/14 taught us nothing?

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