Lord Justice Jackson says mediation is the key to curbing a potential explosion of construction litigation relating to the issue of costly legal fee. It has been dubbed the “cost of costs” – the extravagant amounts of cash being splashed on legal fees in recent UK court battles.

Some cases, such as the famed Wembley trial, end up really becoming a fight over principles rather than cash, with soaring costs nearing, or surpassing, the figures actually involved in the fight.

Now Lord Justice Jackson, the man who headed that very trial, has been charged with doing something about it.

In compiling a preliminary review of civil litigation costs, the former head of the Technology and Construction Court has called for reforms to curb the “explosion” of litigation about costs issues.

And the use of mediation to settle cases was a key feature in his overview of construction disputes.

He said a new study from the Centre of Construction Law and Dispute Resolution at King’s College, London, provided “a valuable insight” to how and when cases settle, and the significant part mediation can play in saving contractors big bucks.

The survey – of cases at the London, Birmingham and Bristol TCC’s between the summers of 2006 and 2008 – is the first ever to attempt to assess the effectiveness and cost savings associated with mediations in the construction industry.

It found 12 per cent of cases settled through mediation claimed to have saved between £200,000 and £300,000. A further 15 per cent said their savings came somewhere between £150,000 and £200,000 and 9 per cent said that figure climbed above £300,000.

Lord Justice Jackson said: “Mediation promotes earlier settlements and in a small number of cases (which may be regarded as on the cusp) actually precipitates settlements which would not otherwise be achieved.

“Mediation is a valuable and cost saving mechanism, when properly used.”

His other suggestions in reducing the costs of litigation – soon to become formal recommendations to the Master of the Rolls – include the introduction of fixed recoverable costs and also introducing cost sanctions on witness statements and pleadings.

“One of the banes of  TCC  litigation is duplication of documents,” he said.

Lord Justice Jackson was particularly scathing about the £1 million-plus photocopying bill and hundreds of bundles produced during that bitter Wembley battle.

Source:http://www.cnplus.co.uk/hot-topics/legal/mediation-is-key-to-saving-thousands/5202505.article