In the current civil court system, potential litigants are often deterred from pursuing a dispute due to the expense of litigation, which often exceeds the value of the dispute and resulting in a net negative for both parties to the dispute. While the cost for legal advice may remain the same for mediation, if not extended to court procedures, it involves less litigation and a shorter duration thus the retention costs would be less. One study estimated that from 1986-89 the ADR center saved the local community $20 million in costs related to litigation and about $1 million related to court staff and judges. Mediation’s cost-saving influences individual decision making and provides a practical alternative to costly litigation and broadening the access to justice. The aim of ADR concepts like mediation was to accelerate the litigation procedure and reduce its cost, whilst reducing the cost of running the court service, by ensuring that parties were channeled down the route of mediation or other ADR processes so that inevitably a proportion of cases would settle rather than having to be decided by a judge in a courtroom. Mediation and other ADR processes can reduce public costs associated with the court system by diverting claims to ADR. However, former Justice Kirby states that if governments want to encourage ADR, and thus cut court costs, they must be prepared to fund training in its techniques; analysis and auditing of its processes; and the education of its practitioners. However, even if these matters are addressed there can remain a significant inequality of economic bargaining power between the disputants which is prevalent in the civil court system.Time
The cost associated with litigation is closely linked to the duration of court proceedings and delays especially in lengthy trials. According to Kirby thirty years ago a five-day trial was considered long, now a long trial is one that lasts five months. The cost of litigation is exacerbated by the time involved in the scheduling of other trials, the time needed for statements of claim and defense, disclosure, interlocutory proceedings and directions hearings, having to brief experts and waiting for their reports, and other pre-trial processes. This delay in resolution results in a large opportunity cost which parties must weigh against any potential benefit or compensation received or retained. Delay can also place a large amount of stress on the parties, especially if the continual association of the parties is desired. Furthermore, while against the overriding obligation rules, adversarial litigation may involve delay tactics in the hope that protracted litigation will wear the other party down. Whilst the mediation process can be very time consuming, by encouraging and assisting a constructive discussion between the parties to reach a final settlement a resolution to the conflict can be found in approximately 80% of the cases for less comparative time.
As aforementioned the cost and time associated with litigation can often aggravate the relationship between the parties. Delay in getting to court can exacerbate the mutual antagonism created by the adversarial system worsening the financial and emotional situation of both parties. In contrast to the courts, mediation facilities can generally be accessed within days and with flexible hours. The mediation process with its flexible responses and solutions can assist in reducing emotional stress by hosting mediation at a place, time, and length of process, which is suited to the disputants and giving them a degree of control over the proceedings. This can be beneficial in cases where the disputants cannot avoid, or positively desire, an ongoing relationship such as family, long-term or professional relations. Where the parties see merit in an ongoing business or other association, mediation can create a solution limited to the immediate conflict whilst maintaining the relationship. Proponents of mediation argue that the private, informal nature encourages the uninhibited exchange of information, feelings and emotions which can contribute to a mutually satisfactory settlement. However, it is acknowledged that where there is a severe power imbalance which is based on emotional and psychological factors, such as in domestic violence or undue influence cases, litigation may be more appropriate.
In conclusion, while the need to continually improve both ADR and the civil court system, ADR techniques, especially mediation, address some of the deficiencies of the civil court system. Mediation can reduce individual and community costs, which will provide greater access to justice. However, it cannot address the effect that the inequality of economic bargaining power has on the civil court system. Secondly, mediation can reduce the time delay and the economic cost and psychological issues, such a stress, associated with it. Lastly, mediation can facilitate the maintaining of social and professional relationships throughout the litigation process. However, where there is a severe psychological power imbalance between the parties the formalities and distance provided by litigation may be more appropriate. Therefore, in certain circumstances, ADR may be a more appropriate response to a civil dispute than the civil court system, strengthening the system as a whole.