New Revelations in Preferred Dispute Resolution Methods Found in Preliminary SIDRA Survey Results
By James Piercy
Early findings of next year’s Singapore International Dispute Resolution Academy’s (SIDRA) International Dispute Resolution Survey have been released. These findings, announced on 29 August at SIDRA’s event during Singapore Convention Week, shed light on both the changing priorities of clients and their overall satisfaction with various forms of dispute resolution, including mediation. Since the last survey was conducted in 2021, the world has moved past the slowdown of Covid-19 and entered a new era of economic growth and uncertainty as to what the future holds. As a result, a noticeable shift in priorities can be seen in what clients are looking for in mediation.
The first, unsurprising, finding by SIDRA is that the cost of settling the dispute continues to be an increasing concern for clients and counsel. The percentage of respondents who described cost as “Important” or “absolutely crucial” has risen from 78% in the 2021 survey to 93% based on the current preliminary data, a noticeable increase of 15%. Such an increase is unsurprising in today’s significantly more uncertain global economy.
Delve into the full results below.
Figure 1 – SIDRA 2023
Interestingly, although 73% of respondents expressed satisfaction with the cost of mediating their disputes, the overall satisfaction rates across the three main legal dispute resolution methods – litigation, arbitration and mediation – remain lower, hinting at a widespread underestimation of the financial implications of resolving legal conflicts. The legal industry has a myriad of options that could address this issue, from greater client education to post-resolution feedback being used to tweak estimates. What is clear is that the whole legal industry must work hard to improve its cost estimation practices to ensure clients are fully informed of the financial implications of resolving legal disputes formally.
The second notable characteristic influencing one’s decision to use mediation is confidentiality. In 2021, 89% of respondents considered confidentiality an important reason for choosing mediation. This figure went down to 73% in this year’s preliminary findings. However, whilst its importance has gone down, satisfaction has risen significantly from 72% to 93%. This raises questions about the interplay between a client’s perceived importance and actual satisfaction, which merits further investigation.
The next intriguing finding from this data is that clients appear to want a greater role in the dispute resolution process and are choosing mediation as a result. Priorities for choosing mediation in this category include flexibility in institution choice, venue, mediators and procedures, which rose 6% from 67% in 2021 to 73%, and clarity and transparency in rules and procedures, rising 23% from 44% in 2021 to 67%.
Mediation as a dispute resolution mechanism seems to be delivering on these priorities, with the 2023 preliminary findings showing 87% satisfaction in the former category (flexibility in institution choice, venue, mediators and procedures) and 73% in the latter (clarity and transparency in rules and procedures).
Mediation is an incredibly flexible process that provides parties with the ability to determine their own procedures, mediators and institutions, offering them a high degree of transparency and control. These days, parties seek greater involvement and want to be kept in the loop with their disputes. This is a shift from the days in which disputes were handed over to external lawyers to manage. It is therefore no surprise that the preliminary findings show a high level of client satisfaction with mediation’s flexibility and transparency.
Finally, the biggest shift year-on-year in priorities has been seen in the categories of finality and direct enforcement. Finality means that the decision that has been made is final, with little chance for appeal; this category rose from 56% to 80%. Direct enforcement relates to the party’s ability to enforce the award and the percentage of respondents making it an important priority went from 50% to 67%.
These large swings do not just apply to mediation, the same question for litigation was also asked and 100% of respondents considered these two categories as important or crucial in deciding to use litigation. This is up from 80% in Direct Enforcement and 83% in Finality in 2021.
These high scores across the board show that parties want more certainty in the outcomes of their cases. One may be able to link this with increased cost consciousness. Dealing with appeals leads to indirect losses, such as having to put employees’ time into preparing more documents, and being left in legal limbo is no doubt stressful for managers and investors alike. Due to having the outcome controlled by the parties themselves, mediation does tend to have a lower rate of appeals and greater likelihood of compliance. This is reflected in the satisfaction scores where 80% of respondents were satisfied with the finality and direct enforceability of mediation settlements.
Invitation to Participate
SIDRA’s preliminary data provides the legal industry with a lot of food for thought and it will be very interesting to see how client’s priorities continue to shift throughout this decade. However, this data is only preliminary and the survey is still inviting responses. The final report of this biennial survey will be published in 2024.If you have experience in any commercial dispute resolution and would like to take part in the survey, please click the link below or scan the QR code.
About the author
James Piercy is an aspiring commercial barrister from London, United Kingdom, with a particular interest in international energy and commodities. After graduating with a first in law, he has explored the legal world with mini pupillages in some of the UK’s top chambers, securing the Yarborough-Anderson Scholarship from Inner Temple and undertaking an internship in the legal department of International SOS, a global medical and security services provider. He is now spending a few months with SIMC to learn more about international commercial law and alternative dispute resolution alongside studying for the UK Bar Exam at the Inns of Court College of Advocacy.