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16 JUN 2014

A saving too far for the MoJ?

A saving too far for the MoJ?

Readers of this blog will know we campaign for family mediation to be better marketed and supported if it’s ever going to benefit larger numbers of separating families.

For us - at least - this means mediation being promoted and supported by commercially aligned family lawyers. It’s about breaking open the market for full service dispute resolution that most people can afford.

We’re currently piloting our approach with 50 law firms in four UK locations and hope to reach proof of concept by Spring 2015. In the meantime, we’d like to share some evidence about how not to build a market for family mediation. As ever, that evidence is provided by the Ministry of Justice (MoJ).

We already know that mediation starts across the UK have fallen by an average of 40% between May and December 2013 compared to the same period in 2012. But what is this costing the MoJ and how much money is being saved? The answer it turns out is somewhere in the region of £14m.

Here’s how we worked it out:

Total spend in 2012/13: £13,723,272.97
Total spend for April 2013 to Dec 2013: £7,117,169.30

If we assume the final three months of 2013/14 were in keeping with the previous nine, then estimated total spend for 2013/14 will be £9,489,559.07. (It's likely to be less since claims made by mediators in the opening three months of 2013/14 will reflect payment for higher volumes of pre-LASPO work)

Total spend in 2012/13: £13,723,272.97
Estimated spend in 2013/14: £9,489,559.07
Estimated underspend (2013/14): £4,233,713.90

In 2013/14, the MoJ also made available an additional £10m to fund family mediation (presumably to cover the surge in demand it boldly predicted following the introduction of LAPSO).

Total estimated underspend in 2013/14: £14.2m

So there you have it: instead of a predicted spend of around £24 million in 2013/14, it’s very likely the MoJ will have paid out just over £9 million. Well done, Mr Grayling.

But this is one saving the MoJ may come to regret with an ever-increasing number of litigants in person threatening to bring the new Single Family Court to a juddering halt. At last count, the number of unrepresented parties attending Children Act proceedings had risen by 57% compared to pre-LASPO times <http://lawyersupportedmediation.com/blog-posts/family-courts-facing-crisis> . And what of the tens of thousands of separating families that fell off the radar from April 2013 relative to the year before?

Are these former partners “working things out together”? Lets hope so. It’s more a comforting thought than non-resident parents giving up the ghost or separating couples cutting lopsided kitchen table deals selling one party short.

Putting the crystal ball to one side, there’s even something curious about the money that is being spent on publicly funded family mediation. In the same Freedom of Information response, the MoJ provided a breakdown of the annual budget between “MIAM” and “Full mediation”:

Breakdown of spend: 2012/13:
MIAM: £7,396,518.75
Full Mediation: £6,326,754.22

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This shows how inefficient the pre-LASPO funding code referral system was. More money was spent on MIAMs than full mediation. This is because tens of thousands of parties bounced back to their referring lawyer to pursue lawyer-led options/litigation. Those couples that were converted to mediation effectively kept afloat a network of publicly funded mediation providers that became the unintended victims - rather than the predicted beneficiaries - of LASPO.

Breakdown of spend: April to Dec 2013:
MIAM: £3,438,013.79
Full Mediation: £3,679,155.51

This is a very similar breakdown to 2012/13 spend except there was no funding requirement imposed on lawyers to refer to mediation. (No legal aid for lawyers to claim!) Nevertheless, almost half of total spend is allocated to covering the cost of MIAMs. But why?

Since April 2013 legal aid family lawyers have effectively been in competition with legal aid family mediators for lower-income clients. Lawyers now sell small packets of advice/form filling (AKA unbundled services) while mediators petition the MoJ to fund mass advertising to “educate the public” about their skills.

So what does this tell us? We think it’s rather obvious: without commercially aligned lawyers promoting and supporting mediation, separating couples are unlikely to mediate in anything like the numbers the MoJ would like to see. As such, we don’t foresee a vast uplift in mediation starts now Applicants are required by the MoJ to meet with a mediator before being allowed to file papers at court.

Bottom line: if you want a sustainable market for family mediation, get the lawyers involved. Nothing else seems to be working.

But what is this costing the MoJ and how much money is being saved? The answer it turns out is somewhere in the region of £14m.

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