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RIAD Conference 2011Mediation – An answer to consumer needs?
International Association of Legal Protection Insurance
RIAD, the International Association of Legal Protection Insurance represents insurance companies from 17 European countries, as well as Australia, Canada, South Africa and South America. RIAD members are specialised in insurance and/or services linked to legal protection insurance. Most of RIAD’s members are SMEs offering a very specific product to their clients: an insurance policy with the resources and services that are necessary for access to high-quality and easily available legal advice and services. They also protect their clients effectively against financial risks associated with engaging legal experts and gaining access to the law.
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Table of contents
Foreword by the RIAD President ......................................................................................................................................................................... 4
Understanding Mediation ..........................................................................................................................................................................................5
What is Mediation? ....................................................................................................................................................................................5
Advantages of Mediation ....................................................................................................................................................................... 6
New tools for conflict resolution ......................................................................................................................................................6
Quality standards and mediation .....................................................................................................................................................7
The European-level approach to mediation ............................................................................................................................8
A Varied Landscape for Mediation ..................................................................................................................................................................... 9
Fast-tracking mediation (Case Study 1: Italy) ........................................................................................................................9
An integrated part of the dispute regulation mechanism (Case Study 2: Canada) .................................10
The Consumers’ Expectation ............................................................................................................................................................................11
What are consumers looking for and can mediation meet their needs?
The Legal Protection Insurers’ Perspective ..............................................................................................................................................13
What opportunities does mediation offer for LPIs?
Mediation today: at a glance ............................................................................................................................................................................... 15
The RIAD Conference delegates provide feedback about how mediation is practiced today
Biographies .....................................................................................................................................................................................................................17
The RIAD Conference 2011 benefited from the insight and expertise
of a range of international mediation and insurance experts
Panel discution ‘Potentials and pitfalls - Mediation an area of tension for legal protection insurers’: Adrienne O’Sullivan, Federico Reggio, Manon Schonewille, Stefano Fanini, Ulla Gläßer, Joachim Kempchen (from left to right).
Mediation – An answer to consumer needs?
The RIAD Conference on Alternative Dispute
Resolution of 2003 concluded that mediation held
great potential for Legal Protection Insurers (LPIs).
Since then, this innovative form of dispute resolution
has made steady progress and may now be on the
cusp of becoming a truly mainstream solution for
resolving conflict.
That’s why we felt it was time to revisit the topic
and so our 2011 RIAD Conference asked whether
mediation is an answer to consumer needs. The
event gathered a range of international mediation
and insurance experts as we sought to ascertain
the benefits of mediation for those seeking access
to justice. We also sought to understand the
barriers and catalysts which ultimately determine
the wider practice of mediation. Our choice of
conference location – Verona – couldn’t have been
more appropriate, as Italy very recently mandated
the use of mediation for many kinds of civil dispute.
Those that have used mediation are clear about its
advantages as a dispute resolution mechanism.
Mediation settlements save time, money and
deliver sustainable results. The advocates of
mediation present at the RIAD Conference even
believe it could be a way to help unblock choked
legal systems around the world.
The results certainly are impressive – in the EU, for
example mediation has a 75% settlement rate. And
yet the total number of disputes going to mediation
remains a tiny percentage of those which end up
in court.
The Conference identified factors which are holding
back the use of mediation. Poor awareness of
mediation is often compounded by the gatekeeper
role played by many professionals. Reassurance
is also needed regarding the choice and quality
of the mediator, access to mediation tends not to
be clearly regulated and legal protection insurance
policyholders may not even be aware that their
policy covers the cost of mediation.
What is clear is that mediation is not a panacea
for consumers. Likewise, mediation offers much
potential and some pitfalls for LPIs. Some of
the insurers present felt that mediation could
be a ‘game-changer’ for the industry as it could
offer access to the huge untapped market
of those currently inhibited by the expense,
duration and stress too often associated with
litigation. All agreed that mediation is an opportunity
for LPIs to enhance the range of legal advice and
services we offer our customers.
Only time will tell if mediation can play a much greater
role in enhancing participatory justice as desired
and foreseen by some of the expert panellists at
the RIAD Conference, but what is certain is that
mediation is today very much part of the LPIs’ mix
of services and that mediation techniques have
been mainstreamed within our industry and are very
successful in resolving conflict - something we all
have an interest in!
Foreword by the PresidentPaul Asplin
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Understanding Mediation
For centuries, civilised society has relied on
the rule of law to resolve its disputes. However,
the traditional legal system is too blunt and
inflexible an instrument for many of the disputes
it is called upon to settle. Simply put, it is not
feasible to legislate for all eventualities.
In such cases - when our legal roadmap appears
ill-suited to constructively dealing with conflict
- mediation could be the compass which
guides us towards more mutually beneficial
and sustainable resolutions. Indeed, where it
is used, mediation tends to deliver impressive
and sustainable results for all concerned. So, is
mediation now set to transform our civil justice
system?
The 2011 RIAD Conference delved into the core
of the sometimes nebulous concept of mediation
and considered its advantages and limitations.
The quality of mediation was identified as being
pivotal to the mainstreaming of this alternative
dispute resolution mechanism.
What is Mediation?
Mediation is an instrument for solving disputes by
seeking an agreement between conflicting parties.
However, as the RIAD conference panellists noted,
this conceptually narrow definition does not reveal
the full extent and form of mediation as it is practiced
today. They identified the fundamental elements
which are common to all forms of mediation,
however it is practiced.
It is essential to understand that mediation is
based on a completely different paradigm than
the traditional legal system, which is adversarial
and judgemental in nature. Mediation establishes
the interests and needs of both parties and sees
interpersonal relationships as being central to the
genesis and solution of disputes – such intangible
aspects are often considered peripheral to the legal
process.
Mediation is the polar opposite of judgement. The
mediator’s role is to assist the disputing parties
as they negotiate their own settlement. The
cooperative logic of mediation is a radial departure
for all those used to operating within the civil justice
system. And it means that getting the most out of
mediation requires a real mind-set change from all
parties involved, including customers, insurers and
lawyers.
In fact, the ultimate goal of mediation is to find
mutually-agreeable solutions to problems that meet
the interest of all parties. Even if such ‘win/win’
scenarios are not always possible, the ambition
clearly illustrates mediation’s unique approach to
the conception, analysis and resolution of conflict. It
also helps to distinguish mediation from other forms
of dispute resolution such as arbitration or amicable
settlement and mediation has a different structure,
timetable and dynamic than these mechanisms.
Mediation is grounded in some core principles.
Firstly, it must be entered into on a voluntary basis
and with a cooperative spirit. Secondly, it must be
confidential – so that all parties can communicate
fully and openly without fear of compromising their
case before the courts, should mediation prove
unsuccessful. Thirdly, mediation is flexible, meaning
that it can be tailored to circumstance, for example
in some cases, when all parties are in agreement,
the neutral mediator may express a view on what
might be a fair or reasonable settlement.
In summary, mediation is a cooperative, dialogue-
based approach to conflict resolution in which,
through a voluntary, informal and confidential
process, parties try to deal with their issue in a
collaborative way, with the help of a mediator.
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Manon Schonewille
Advantages of mediation
In the EU, mediation has a 75% settlement rate, which is
a strong indicator of the opportunity meditation provides
to support the overall efficiency of the justice system.
However, the total number of mediation cases represents
just 0.5% of the total cases filed in court. Clearly, mediation
retains much untapped potential to solve conflict in cases
where typical, normative-based legal procedures tend to
lead to damaging or unstable outcomes.
None of the proponents of mediation at the RIAD Congress
saw mediation as a panacea which will single-handedly
unblock overwhelmed legal systems, but all agreed that
mediation offers a welcome, effective and much-needed
alternative path to civil court trials.
Several reasons exist for choosing mediation. The most
obvious are its ability to generate practical and lasting
resolutions, more quickly and more efficiently than is
possible via other channels of dispute resolution and to
the mutual benefit of all who participate in the process.
The time and cost savings associated with mediation are
significant. Although mediators’ fees are often comparable
to lawyers’, the mediation process typically requires
considerably less time than a case moving through
standard legal channels. For commercial mediation, when
compared with cost of going to court, mediation will save,
on average, more than 220 days and if mediation is not
used the legal fees will be on average 32% higher.
Another advantage of mediation is confidentiality. Court
proceedings happen in public; whatever happens in
mediation remains strictly private. Confidentiality is of
such importance that in most cases the legal system
cannot subsequently force a mediator to testify in court
about the content of a mediation procedure.
A less obvious strength of mediation is its flexibility. By
giving the disputing parties control over the process, the
eventual outcome can be best adapted to the specific
needs and interests of the case. In court, the resolution
is thrust upon the parties by the judge and jury’s
interpretation of the law. Under mediation, solutions found
by the conflicting parties can potentially go beyond the
narrow remit of the legal system.
New tools for conflict resolution
The expert panellists at the RIAD conference emphasised
that mediation is a means to a goal, rather than a goal
in itself. Mediation allows a dispute to be dealt with in
the way that makes most sense for the parties involved.
Thus the process is open to novel conflict resolution
methods which can overcome initial reluctance to
engage in mediation.
Constituency is often a problem for parties to commercial
disputes. Research has found that executives would
often prefer to have to report back a court-ordered
settlement that would cost the company €5 million
than convey the message that the company had freely
agreed to settle a dispute for €2 million. This situation is
further compounded by overconfidence bias, whereby
each party believes that they would win should the case
go to court.
A very effective tool is used in the Netherlands to
surmount these barriers. Pre-Court Assessment,
designed by Result ADR Centre for Businesses is a hybrid
method that takes place in two stages and combines
neutral evaluation with mediation. An evaluator, usually
a retired senior judge, offers a non-binding legal opinion
privately to each of the parties, prior to the beginning of
the mediation process.
The Pre-Court Assessment tool was created to respond
to the most difficult cases faced by insurers’ clients. The
process has been very successful and enjoys even
higher settlement rates than straightforward mediation.
The combination of legal evaluation and facilitative
input, allows the parties to retain control of the process.
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Federico Reggio and Adrienne O’Sullivan
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It dismantles the constituency barrier, it diminishes the
overconfidence bias and it permits the underlying interests
and issues to be taken into consideration.
Once the parties have agreed to commence mediation, the
basic ground rules of the process need to be set out by the
mediator. This means ensuring that all parties are satisfied
of the mediator’s neutrality and that the parties have realistic
expectations of what the mediation process can achieve.
Thereafter, the mediator needs to call on a range of tools,
techniques and interventions to keep the process moving
forward.
In ascertaining the opening statements, flexibility is key.
The mediator may propose to initiate discussion in caucus
rather than plenary if the parties’ emotions are too strong.
The mediator will try to clarify the blocking issues upfront
and may use therapeutic techniques to facilitate discussion
around these issues. The mediator will then try to encourage
the parties to separate the emotional/relationship aspects
from the sources of conflict. The mediator summarises,
checks assumptions and asks clarifying questions.
During the exchange and exploration phase the parties
begin to understand the other’s point-of-view and focus on
interests and outcomes. Various tools can then be used to
set up a negotiating agenda. The mediator encourages the
parties to consider as many mutually beneficial options as
possible, stimulates creative thinking through techniques
such as brainstorming, helps the parties with cost-benefit
analysis and may choose to seek advice from experts
or consult external sources, if necessary. In finalising
agreement and closure, the mediator is there to encourage
SMART agreements, i.e. agreements which are Specific;
Measurable; Achievable; Realistic; and have a clear Time
limit.
Quality standards and mediation
The role of the mediator is pivotal if disputing parties are
to develop a shared understanding of their conflict and
to work toward building a practical and lasting resolution.
An experienced mediator necessarily possesses a broad
skill-set – including the ability to stimulate collaboration,
understand the ethics of negotiation, be able to deal with
competitive techniques and encourage creative thinking. It
means that mediators inevitably develop their own style and
methods.
In such a heterogeneous environment, how can quality be
guaranteed? All speakers at the RIAD conference underlined
the importance of mediator quality but recognised that
suitable and proportional education and training is a
complex issue. Despite the acknowledged need for quality
standards, the flexibility which makes mediation so effective
in resolving disputes can appear to inhibit the imposition of
consistent norms for mediators.
The application of a code of conduct to the practice of
mediation is challenging — due in part to the diverse
number and type of practitioners in the field. Mediators
have varied backgrounds and the skills required for
mediating family disputes vary greatly with those
needed for commercial disputes. Some disputes require
conciliatory skills with expert knowledge of a specific
domain and other require counselling skills and the use of
therapeutic techniques. A tendency exists for professional
societies to develop codes of conduct that apply to their
own members. In some markets it was noted that court-
appointed mediators with experienced legal backgrounds
sometimes struggle to remain impartial and to avoid giving
their opinion during the process. Again, training to change
juridical mind-sets is deemed to be essential in these cases.
The educational requirements for accreditation as a
mediator differ both between accrediting groups and from
country-to-country. In some cases, legislation mandates
these requirements, while in others professional bodies
impose standards with which applicants must comply
prior to gaining accreditation. Presently, only fragmented
national legislation and incoherent international standards
exist regarding the level of education which should
Ulla Gläßer
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apply to all mediators or the practice of mediation.
In seeking to facilitate their clients search for suitable and
competent mediators, LPIs have a number of options.
Firstly, insurers can develop their own list of competent
mediators based on their experience in the open market
- noting that the most in-demand mediators will not
necessarily be the best ones. Secondly, they can work
from an official approved list of mediators, if available,
whereby all mediators on the list meet a minimum standard
(which vary considerably, ranging from 400 hours of
training under the Canadian system to 50 hours under
the newly approved Italian scheme). Thirdly, mediators
can be trained in-house – although this could raise
questions of impartiality - in Switzerland such mediators
are designated when disputing parties are insured
with the same company and the system works well.
The European-level approach to mediation
The objective of the EU Mediation Directive1 , which all
Member States were due to have transposed by May
2011, is to promote the use of mediation in Europe. It aims
to provide a predictable legal framework that facilitates
access to this innovative form of dispute resolution2.
However the Directive has a limited scope of
application: it is restricted to cross-border disputes
and to civil and commercial matters. The law
touches on certain aspects of procedure, e.g. it
regulates the enforceability of agreements, but
it does not mention the liability of the mediator.
The EU definition of mediation is fairly broad, emphasising
that it is a structured process which parties enter into
voluntarily in order to settle their dispute with assistance
of mediator. The mediator is simply defined as being an
independent third party asked to conduct mediation.
The panellists indicated that the current EU regulation
is unlikely to have a significant effect on the
market and its definitions are too vague to address
the patchwork of national approaches in place.
As is the case for plugs and phone sockets, each country
follows its own standards. By way of example: in Austria
breach of confidentiality can lead to up to 6 months
imprisonment and financial penalty; in Greece for
domestic disputes only lawyers can be accredited
mediators; in the Netherlands there is no regulation -
although a specialised disciplinary court for mediators
exists; and in Italy mediation is mandatory for many
types of dispute!
1Directive 2008/52/EC of 21 May 2008 on certain aspects of mediation in civil and commercial matters, OJ L136/3 of 24/05/20082 In November 2011 the European Commission proposed two new pieces of legislation: proposal for a directive on alternative dispute resolution for consumer disputes (COM(2011)793/2) and proposal for a regulation on online dispute resolution for consumer disputes (COM(2011)794/2)
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A Varied Landscape for Mediation
Mediation, despite its impressive results, remains
a marginal solution in the dispute resolution
landscape. In many markets, access to justice
is still primarily about ‘having one’s day in court,’
despite the expense, time and stress which can
typically accompany the litigation process.
The 2011 RIAD Conference heard that mediation
remains an underused resource for three main
reasons: a lack of awareness in the marketplace
– for example, customers may not know if their
insurance policy covers mediation; the gate-
keeper role played by lawyers and professionals
who are unfamiliar with the process of mediation
and who may fear that ADR stands for Alarming
Drop in Revenues; and habit – the market has
to develop the reflex of using mediation to solve
its disputes and this takes time, especially when
the traditional legal approach has been the
default setting for so long.
Two countries – Canada and Italy –
were highlighted for their approaches to
mainstreaming mediation. In Canada, mediation
is now an established part of a participative
justice system. In Italy, the failings of the legal
system have prompted radical reform which
means that mediation is being imposed in one
fell swoop.
Fast-tracking mediation Case Study 1: Italy
In 2011 the Italian government made a dramatic
change to the rules regarding access to justice.
The new law effectively promotes mediation as a
low-cost solution to a broken judiciary system –
according to national newspaper Il Sole 24 Ore civil
proceeding take around ten years to resolve.
Mediation is now mandatory for a range of civil
matters, including landlord/tenant disputes,
inheritance claims, financial contracts and
defamation cases. In March 2012, mediation will
also be mandatory for liability cases involving car
and boat accidents. Some of the expert panellists
noted that a ‘tsunami’ of mediation was fast-
approaching as such disputes represent 60% of
litigation cases.
Mediation is being touted not as a panacea but
rather as a first step in the conflict resolution
framework which will act as a low-cost filter and
help reduce the legal logjam. Affordability of
mediation has been prioritised - incentives include
the fact that mediation costs are tax deductible (up
to €500 per year) and that mandatory mediation
tariffs are set by the state at low levels - starting at
€50 and rising to a maximum of €4,500 for cases
where more than €5 million is at stake.
To source a mediator, disputing parties can contact
an accredited agency who will provide them with a
list of potential mediators. If the parties can’t agree
on a mediator, the impartial agency will select the
mediator.
In fast-tracking mediation the authorities have also
introduced some elements which are not normally
associated with mediation. For example, mediation
is not voluntary for the disputing parties and if a
party fails to turn up, a judge can subsequently
issue a fine. Strict time constraints are placed on
the mediation process - a four month limit is set
after which the case will go to court.
Furthermore, if both parties agree, the mediator is
obliged to make a proposal and if no agreement
is found, the mediator can choose to make a
settlement proposal. Should one of the parties
accept it but the case nevertheless goes back to
court, the judge, if in agreement with the mediator’s
proposal, can make the opposing party responsible
for all the costs as well as a sanction.
The Italian mediation policy is particularly ambitious
as there is no real existing culture of mediation in the
country. However if the law to fast-track mediation
Stefano Cardinale
10
is successful, Italy will very much be in the vanguard of mediation as practised in Europe.
The expert mediators at the RIAD Conference raised a number of concerns about the manner in which Italy is introducing mediation. Although the law has been in force since 2011, public awareness is not as high as might be desired and lawyers need to be brought onboard and encouraged to do more to inform their clients about mediation. There is also a lack of qualified mediators on the ground and there are concerns that the lack of qualified mediators will jeopardise the success of mediation in Italy. Theoretically, only 50 hours of training are required to become a mediator and fears were expressed that the training of mediators is being viewed in some quarters primarily as a business opportunity. The conciliator type role foreseen for mediators is also potentially dangerous as a mediator does not have to be a legal expert or indeed an expert in the subject under dispute.
An integrated part of the dispute regulation mechanism
Case Study 2: Canada
In Canada - a bilingual, federal state with both civil law and common law systems in place - the public authorities have long been firmly committed to mediation. Mediation is part of the culture of dispute resolution and it is strongly supported by the insurance industry, the legal profession and citizens.
The result is that mediation has proven to be very effective in Canada. For complementary mediation and voluntary judicial mediation (civil and family), settlement rates are around 80%. There are around 50% complete or partial settlements for complimentary and obligatory judicial mediation (civil and family).
Over the past twenty years demand has increased constantly for private mediation, complementary mediation and judicial mediation. And there has been a corresponding increase in available court time for cases which are not suited to mediation.
Approximately 85% of lawyers and parties who have been part of a voluntary judicial mediation have a positive perception and more than 90% recommend it. Insurers also have confidence in mediation - in certain courts 70% of cases that go to mediation are insurance-linked litigations. The strong uptake of mediation results
in substantial benefits for judicial administration. It is estimated that settlements reached by mediation save around 1,450 days of litigation per year for a court with 100 judges.
Mediation can be either amicable or imposed. Facultative mediation is chosen when the parties are in agreement and nearly all types of cases can be mediated (including civil, family and criminal). Mediation is mandatory if it is ordered by the court, although only certain types of cases can be mediated in this way (civil or family, etc).
If the court refers the parties to complementary mediation, the mediator is accredited by the court (depending on specific competence criteria) and is on a list. He may be employed by the Ministry of Justice or come from the private sector. When the court refers the parties to judicial mediation, the mediator is a practicing judge. Judicial mediation is without direct costs for the parties, excluding remuneration for their lawyers. Complementary mediation is without direct costs if the mediator is a civil servant or a private volunteer paid by a public programme or by a special tax on litigation.
Costs for complementary mediation are shared by the parties if the mediator is private and remuneration for lawyers must be added if they are present. Tariffs for mediators are determined by law or by the market price.
The market for mediators is not overly fragmented. Quality is greatly enhanced by university master’s programmes in mediation, which have been available since 1999 and include a minimum of 400 hours training. There are also training programmes for judicial mediation and in certain courts more than 50% of the judges are trained mediators.
Jean-François Roberge
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The Consumers’ Expectation
The effectiveness of mediation as a dispute
resolution mechanism was repeatedly
highlighted during the 2011 RIAD Conference.
Insurance and non-insurance experts from
Canada to Germany and from the Netherlands to
Italy, saw mediation as an answer to consumers
needs.
According to some estimates, mediation in the
EU has an average settlement rate of 75%.
Such results clearly indicate that mediation as
it is practiced today is already of high quality,
despite variances in the training of mediators,
the definition of mediation and pronounced
cultural differences.
The biggest barrier to mediation is getting parties
to engage in the process in the first place. Here
the figures tell a rather different story: in the EU,
disputes going to mediation represent just 0.5%
of the total number of cases which end up in
court. The expert panellists sought to identify
how more people and companies could be
persuaded to pursue mediation when a conflict
arises.
Lack of market awareness
Mind-set change takes time. In the 1850s doctors
were still debating the medical merits of washing
ones hands; today no one questions the need to
disinfect prior to seeing each new patient. When
it comes to mediation, the debate about its merits
remains somewhat peripheral. In many cases
consumers are simply unaware of mediation and its
significant potential to help solve disputes.
In Italy, where the mediation has now become
mandatory for many types of dispute, citizens
still don’t know enough about it and companies
remain distrustful of mediation as they are more
used to settling disputes via the court system.
Typically, the cost of juridical proceedings, in
terms of management time and money are vastly
underestimated. In Germany, where legal protection
insurance penetration is very high - 40% of German
households have LPI cover - market surveys
indicate there is greater awareness of mediation
amongst certain societal groups but that more effort
is needed to mainstream the concept.
Insurers should not simply focus on the question
of what consumers want from mediation. The
consensus from the RIAD event was that mediation
needs to be seen in context. The LPIs’ role in
dispute settlement is to understand their clients’
issues and look to provide the best solutions. In
some case amicable settlement led by the LPI will
prevail and in others litigation may be necessary.
If mediation makes the most sense for a specific
situation, then LPIs should encourage their clients
to try it. The consumer is best served by such a
transparent approach.
The first step in encouraging mediation is to talk
with customers prior to the launch of any legal
proceedings. In addition to early and regular
communication with clients, LPIs could also help
convince lawyers. The gatekeeper role played
by lawyers is very significant as they initiate the
majority of insurers’ cases. Lawyers need to be
convinced that mediation is worthwhile for them
and their clients.
In various jurisdictions, including the US and Italy,
lawyers are obliged to suggest mediation if it is
best suited to their clients’ interest. However, the
panellists indicated that a legal requirement by
itself is not sufficient to change the marketplace;
willingness is also required on the part of the
gatekeepers if they are to inform their clients of
mediation in the most timely and transparent
manner.
Because mediation challenges a well-established
mind-set, it faces stiff resistance. The primary
reasons for the low penetration of mediation remain
lack of awareness in the marketplace and a lack of
engagement by the key market influencers.
Stefano Fanini, Ulla Gläßer, Joachim Kempchen
12
No theory, just results
As with any new product, mediation has to be
carefully explained. Consumers tend to be outcome-
focussed and want sustainable solutions; they are
less interested in the theory of mediation.
What needs to be understood is that mediation is
flexible, which makes it applicable to a wide variety
of conflicts and that the mediation process is more
likely to create optimal solutions in certain situations.
Those who have tried mediation are clear about
the advantages. Compared to the traditional court
system, mediation settlements save time, save
money, deliver sustainable results and are more likely
to allow the parties to maintain a working or personal
relationship after the event.
However there is a lack of clarity in the mediation
marketplace. Firstly, access to mediation is not
clearly regulated. Secondly, how can the parties be
reassured regarding the choice and quality of the
mediator? Consumers also need to feel confident
that initiating mediation will not be costlier than the
tried and trusted route of engaging a lawyer who will
organise all further steps in the dispute.
Over and above these uncertainties perceptions that
mediation is a ‘softer’ option than going to court need
to be corrected. The LPI, as an important and trusted
advisor, is well placed to be an effective change-
agent here. Different forms of mediation exist, so
when clients agree to go to mediation they need to
be prepared in advance so that they have realistic
expectations regarding the possible results.
Mediation is certainly not a panacea. So, it is
equally important that consumers understand the
weaknesses of mediation, for example, the fact
that there is no guarantee that their dispute will be
resolved. The LPI has a duty to carefully balance its
own and its clients’ expectations and there needs to
be clarity regarding the consequences of failure – if
no agreement is reached, who pays for what and
what will the next steps be?
Mediation: a first port of call?
At present, society tends to deal with conflict in a
purely legal way. It’s an approach that consumes a lot
of resources, often results in contested judgements
and by definition excludes a large range of mutually
agreed outcomes. Looking back in thirty years time
might such a purely adversarial approach seem as
antiquated as the doctors who refused to wash their
hands before attending to their patients?
Despite the relatively small scale of the supply- and
demand-side of the mediation market, a number of
panellists felt that now is the time to make mediation
the routine, first-step whenever a dispute arises.
Under this scenario, litigation and arbitration would
then become the alternatives, used for special cases
where a legal approach is most appropriate or as part
of a multi-step dispute resolution system.
Questions and answers ‘How are legal protection insurers involved in mediation?’ Adrienne O’Sullivan,
Barbara Schoonjans, Walter Müller
13
The Legal Protection Insurers’ Perspective
If mediation involves mind-set change for
citizens, companies and professionals in the
legal system, what does it mean for legal
protection insurers?
The uncertain outcome - if no agreement is
reached, then another solution must be found
to resolve the dispute - and the need for the
opposing party to voluntarily cooperate in the
process, means that mediation also requires a
leap of faith from the insurance industry.
Despite these unknowns, the expert panellists
at the RIAD conference felt that mediation is
already delivering encouraging results and
enriches the insurer’s palette of legal services.
Some even went as far as to say that mediation
is a potential game-changer for the industry.
LPIs are well-placed to act as a positive catalyst
in the mainstreaming of mediation. Insurers are
trusted by their clients who appreciate their
advice regarding legal issues and disputes.
As it stands, the industry approach to mediation
varies from market-to-market and from one
LPI to another. And if mediation is to have a
significant impact, a number of challenges still
need to be overcome.
Advantages of mediation The experts at the RIAD Conference emphasised
the huge potential of mediation for LPIs. They
identified a number of reasons as to why mediation
could change the legal protection insurance model.
Firstly, where it is used the results of mediation
are predominantly positive. Some insurers even
find that mediation leads to a settlement in 80%
of disputes. Secondly, although the insurer’s
internal management costs are comparable with
those required for legal proceedings, the external
costs may be reduced by as much as 66%.
Although mediators’ fees tend to be comparable to
lawyers’, mediation is a more efficient process with
considerably less back-and-forth communication
required. Other insurers indicated that the costs
of mediation are similar to those incurred when a
case is settled out of court through a lawyer. Thirdly,
mediation enhances the LPIs’ service offering and
it is a product that resonates strongly with clients
who want to maintain a functioning, long-term
relationship with the party who is the subject of the
dispute.
The panellists also noted the huge untapped demand
for legal services. In the UK, up to 1 million civil law
disputes remain unresolved per annum because
those concerned do not pursue their grievance via
the legal system. In Germany, it is estimated that up
to 50% of citizens do not take recourse to a lawyer
when they have a legal problem. The problem is
not lack of supply of lawyers or even the cost – it
appears that the marketplace awaits an alternative,
less adversarial approach.
Overall, it means that from an industry perspective,
mediation could be a potential game-changer; a
scenario in which those insurers who think more
creatively and entrepreneurially about how to meet
the real needs of their clients will be richly rewarded.
Diverse approach to mediation provision
In practice, mediation is characterised by its
flexibility. The same holds true for the level of
integration of mediation into the business activities
of LPIs. The spectrum ranges from including
mediation in the range of products, to proactively
informing customers and stimulating demand for
mediation, to establishing specific service models
for the offer of mediation.
Integrating mediation into the business model
necessitates the development of criteria which
indicate when mediation should be pursued. Case
managers need to fully understand mediation and
to develop the reflex of raising awareness with
customers before disputes escalate and become
too emotionally charged – as thereafter customers
only want the LPI to ‘fight’ on their behalf. Then a
non-biased mediator selection process needs to be
put in place. And a robust mechanism to measure
success and quality also needs to be established.
Those insurers who are most engaged in mediation
14
see their role as being an active provider of quality
legal and other services. The models LPIs use to select
mediators can vary from maintaining a network of
qualified and certified mediators through to outsourcing
mediation services to an external service provider or
working with an in-house pool of mediators.
Overcoming the barriers
The costs of mediation are in principle borne by the
parties themselves. However, mediation costs are
often covered by the insurer, be it for private, motor or
business legal protection. Such policies commit the LPI
to assume the costs of the insured client, but not the
opposing party’s share in the costs. Financial incentives
can help to motivate the opposing party to take part
in mediation. Thus, some LPIs go beyond the terms of
their policies and cover the costs of both sides. This
offer may be limited to the first mediation session only
or may exclude lawyers’ fees, if they participate in the
mediation. Of course, even if the insurer assumes the
costs for the mediation procedure and for the provision
of a mediator, the benefit is only of value to the customer
if a settlement is reached.
As mediation remains a minority dispute resolution
mechanism in many markets, customers generally first
learn about mediation via their insurer. LPIs may propose
that an in-house mediator is used, if both parties agree,
or if both parties happen to be customers. By working
with a network of mediators the LPI can ensure a certain
quality threshold is maintained and depending on the
case, may be able to identify a mediator whose skill-set
is most relevant. However, the expert panellists noted
that a mediator recommended or proposed by a LPI
could be a lingering source of tension. It is of paramount
importance that the mediator is capable of conveying
that neutrality is guaranteed.
The challenge of raising awareness of mediation is not
just an external communications challenge. Insurers
need to regularly organise training courses for their
teams. Role-playing in internal workshops conducted
by a mediator will show how effective mediation can
be. It helps keep the idea of mediation top-of-mind for
those tasked with distributing cases within the LPI. It
also helps insurers to identify the disputes and parties
which are most suitable for mediation.
Value of mediation for all
At its root, mediation is a decision-making tool. For
some markets where mediation is less prevalent,
amicable settlement is the dominant alternative dispute
resolution mechanism and LPIs play a very important
role in negotiating such agreements, with some insurers
reporting that mediation techniques help them to reach
settlements in up to 80% of disputes handled in this way.
Although mediation can be a cost saver for LPIs, the
expert panellists emphasised that, as a quality service
provider, the insurer’s role is to help customers find the
channel that is best suited to resolving their dispute. As
noted, there is an unfulfilled demand for legal services in
what is today an increasingly complex legal landscape.
It gives entrepreneurial LPIs an opportunity to expand
their role as trusted advisors.
The LPIs who successfully meet this challenge will
be highly valued by customers. These insurers will be
characterised by a strong client-focus and a long-term
vision which means that mediation will not only be
encouraged when it is potentially more cost-effective for
the insurer: it will also be recommended if it is more likely
to provide overall customer satisfaction and even if a
court case would most likely be ‘won’ by the customer
and thus allow the LPI to recover its costs.
The true value of mediation reaches well beyond the
insurance industry: mediation is of value to all players
in the dispute resolution process. It is potentially a more
cost-effective and satisfactory way for customers to
pursue their legal and social rights and it can relieve
pressure on court systems while boosting personal
responsibility in the management and solution of conflict.
Rainer Tögel
15
Mediation Today: At a Glance
The annual RIAD Conference is a high level
gathering of international experts. Seizing on
this unique opportunity, the 150 legal protection
insurance experts, lawyers, academics and
mediators present were invited to share their
insights into mediation.
The participants were divided into working
groups and asked to identify what they saw as
the key benefits of mediation for consumers and
to identify the challenges LPIs face in making
mediation work for their customers. Thus, the
concluding act of the RIAD Conference was
to take the temperature of mediation as it is
practiced today.
What are the key benefitsof mediation for consumers?
The RIAD Conference delegates identified six main
benefits which mediation offers businesses and
citizens looking for an effective conflict resolution
mechanism.
1. Saves time in comparison with litigation
2. Saves money in comparison with litigation
3. Flexibility
4. Delivers sustainable solutions
5. Facilitates the possibility of a good post-
settlement relationship between the disputing
parties
6. Confidentiality/Privacy
What are the challenges for LPIs in making mediation work for their customers?
The feedback clearly indicated that the insurer’s role
is to help customers find the channel that is best
suited to resolving their dispute. When mediation is
the best option, LPIs face a number of challenges.
1. How can the LPI convince the insured of the
merits of mediation?
2. How can the LPI guarantee the quality and
competence of the mediator?
3. What type of mediation promotion is appropriate?
4. How can conflicts of interests be avoided?
5. How do we find the right mediator?
6. What is the best mediation model to use (in-
house, external, telephone, face-to-face)?
What is the innovative potential of mediation for LPIs?
There is an untapped demand for legal services.
Entrepreneurial LPIs thus have an opportunity to
expand their role as trusted advisors and encourage
participatory justice via mediation. The experts
present identified a number of possible initiatives.
1. Policy covers could be extended to include
mediation (e.g. all risk cover)
2. New technologies (such as online or
‘E-Mediation’) could support greater use of
mediation and mediation techniques
3. Incentives could be provided – e.g. stimulate
demand by rewarding clients who opt for
mediation
4. Mediation could potentially play a greater role in
cross-border disputes
16
ADRIENNE O’SULLIVAN Chief Executive Officer, DAS Ireland Group
RIAD Conference Moderator
Adrienne O’Sullivan, ACII, is a Chartered Insurer and holds
a Diploma in Legal Studies. She is Chief Executive Officer,
Ireland, with DAS Legal Expenses Insurance Company Lim-
ited. She is a Council Member of RIAD, the International As-
sociation of Legal Protection Insurers.
STEFANO CARDINALE Lawyer and professional certified mediator, Bridge Mediation
Contributed to RIAD Conference debate on: ‘The Italian way: an insight into the Italian mediation law, beyond the European Directive’
Stefano Cardinale is a registered lawyer at the Barcelona
Bar Association and at the Roma Bar Association, a profes-
sional mediator, negotiator and conflict management con-
sultant in Spain, Italy and the United States. In charge of
the European branches of Bridge Mediation, in Rome and
Barcelona, he also is an academic director of two Master
Programs at the Instituto Superior de Derecho y Economía
– University of Barcelona.
STEFANO FANINI Lawyer and President of CODACONS Verona & Vicenza
Contributed to RIAD Conference debate on: ‘Potentials and pitfalls - Mediation an area of tension for legal protection insurers?’
Stefano Fanini is a lawyer and founder of the law firm Studio
Legale Fanini & Partners which has special expertise in the
field of civil rights. Stefano Fanini is also a member of the
European Court of Arbitration, a member of the Conciliation
Order Lawyers Verona and a mediator. He is the president
of the Italian independent consumer representative body
CODACONS (National Coordination of Associations for the
Protection of the Environment and the Defence of the Rights
of Users and Consumers) in Verona and Vicenza and he is
the regional director of LEGAL CODACONS VENETO.
ULLA GLÄßER Academic Director of the Institute for Conflict Management
Contributed to RIAD Conference debate on: ‘Mediation and legal protection insurance - What do consumers expect?’
Professor Gläßer is academic director of the Institute for Con-
flict Management at the European University Viadrina Frankfurt
(Oder) and lecturer for Conflict Management at the Bucerius
Law School Hamburg. She is a renowned expert in the area
of mediation and conflict management, has been awarded
several prizes for her academic work and is also a practic-
ing mediator with a main focus on the area of business and
workplace disputes. In one of her recent research projects,
Professor Gläßer studies possible models and best practice
criteria for integrating mediation in the field of activities of legal
protection insurances.
JOACHIM KEMPCHEN Head of Mediation and Legal Services, ROLAND Rechtsschutz, Germany
Contributed to RIAD Conference debate on: ‘Potentials and pitfalls - Mediation an area of tension for legal protection insurers?’
Joachim Kempchen studied law and specialised in insurance
law. He has practiced as a lawyer and has trained as media-
tor. Since 1998 he has worked at ROLAND Legal Protection
Insurance in Cologne in various areas of activity and has since
2010 been responsible for organising and supervising RO-
LAND’s legal and mediation services whose development and
emergence as the company’s essential range of products and
services was decisively shaped by him.
WALTER MÜLLERHead of Legal Affairs & Compliance, Orion Rechtsschutz-Versi-cherung AG, Switzerland
Contributed to RIAD Conference debate on: ‘How are legal protection insurers involved in media-tion?’
Dr. Walter Müller studied at the Universities of Basel and
Neuchâtel. He has been working in the insurance industry
since 1987. Currently he is the head of Legal Affairs & Compli-
ance, for the Orion Rechtsschutz-Versicherung AG in Basel. In
the company he was instrumental developing new products
17
including the coverage for mediation. He is also a member
of a working group on legal protection of the Swiss Insur-
ance Association.
FEDERICO REGGIO Lawyer and Senior Research Fellow, University of Padua
Contributed to RIAD Conference debate on: ‘Mediation as a different paradigm of conflict resolu-tion’
Dr. Federico Reggio is currently a Senior Research Fellow
at the Department of History and Philosophy of Law of the
Padua University and works as lawyer and mediator. He
writes, researches and lectures about various fields con-
nected to legal philosophy and methodology, with special
emphasis on the field of Restorative Justice and penal me-
diation, and, most recently, in the theory and methodology
of mediation in civil law matters.
JEAN-FRANÇOIS ROBERGE Professor at Sherbrooke University, Québec
Contributed to RIAD Conference debate on: ‘Can the system in Canada serve as a role model for mediation?’
Dr. Jean-François Roberge is a member of the Quebecois
Bar association and professor at the Faculty of Law, Univer-
sity of Sherbrooke, Canada, in charge of the ‘dispute pre-
vention and settlement programs’. He is a renowned expert
in judicial mediation and settlement conferences teaching
judges from Quebec and other Canadian provinces. Cur-
rently he is responsible for the continuing education in civil
and commercial mediation offered by the Institute for Me-
diation and Arbitration in Quebec (IMAQ).
MANON SCHONEWILLECommercial Mediator, President of the Board of ACB Foundation
Contributed to RIAD Conference debate on: ‘Introduction to Mediation’
Manon Schonewille graduated in law and completed the Ne-
gotiation and Advanced Negotiation courses as part of the
Program of Instruction for Lawyers at Harvard Law School
(USA). She is a commercial mediator and negotiation expert
with Result ACB in the Netherlands where she is specialised
in B2B and cross-border mediation and negotiation. She also
trains professionals in the advanced use of mediation and ne-
gotiation techniques all over the world and consults on conflict
management and setting up ADR programs. She co-chairs the
International Committee of the Dispute Resolution Section of
the American Bar Association (ABA) and is member of the In-
dependent Standards Commission of the International Media-
tion Institute (IMI).
BARBARA SCHOONJANSExpert in bodily injuries, Euromex N.V., Belgium
Contributed to RIAD Conference debate on:
‘How are legal protection insurers involved in mediation?’
Barbara Schoonjans is an expert for bodily injuries in claims
management and negotiation, a trainer and compliance offi-
cer at the Belgian Legal Protection Insurer Euromex N.V. In
addition, she is the President of ‘De Verzekeringsjuristen’, the
association of insurance lawyers in Belgium, since Septem-
ber 2010. Barbara Schoonjans holds a Master’s degree in law
at the University Antwerp and a Master’s degree in Tax and
Economic Law at the University Leuven. Furthermore, she re-
ceived specialised training at the Interdisciplinary Center for
Mediation Training (IVORM).
RAINER TÖGELSpokesperson of the Board, D.A.S. Rechtsschutz-Versicherungs-AG, Germany
Contributed to RIAD Conference debate on: ‘What are the prospects of mediation for insurers and their customers?’
Since 2005, Rainer Tögel has been a board member of D.A.S.
Legal Protection Insurer AG, where he has been responsible
for operations and claims management. Since 2008 he is the
spokesman of the board and responsible for segment control,
law, product management, operations, claims management
and legal protection. Rainer Tögel studied law at the University
of Hamburg and completed his practical training (preparatory
service) in Bremen.
Album of RIAD Conference 2011
18
Brussels, February 2012
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This report on the RIAD Conference 2011 is subject to copyright with all rights reserved. Reproduction
in part is permitted if the source is quoted. Courtesy copies are appreciated. Reproduction, distribution,
transmission or sale of this publication as a whole is prohibited without the prior authorisation of RIAD.
Disclaimer
Although all content produced in this report was selected carefully from the presentations during the Con-
ference, RIAD does not accept any responsibility for the accuracy or the comprehensiveness of the quotes
chosen. The information provided is for information purposes only and in no event shall RIAD be liable for
any loss or damage arising from the use of this information.
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