"Nudging" towards more appropriate dispute resolution in Scotland - Mitchell Abbott - Pinsent Masons LLP

This post is from Mitchell Abbott, a new member of the YMG committee. The expansion of the committee is in light of the several – and fast paced – recent developments in the world of mediation; from the July 2021 Civil Justice Council Report on compulsory ADR; the August 2021 Call for Evidence on Dispute Resolution,; and the current MOJ consultation on the Singapore convention . In this post, Mitchell looks back at his thoughts on how to encourage mediation, and accordingly more appropriate dispute resolution, in Scotland.

Processes shape outcomes; the choices that actors are presented with and the way in which those choices are presented influence decisions and, ultimately, outcomes. This is the case for the Scottish litigation system; the rules and procedures of the Scottish Courts default to the continuation of the adversarial process and as a result discourage parties from mediating. Instead, the Scottish litigation process should be changed into a dispute resolution process that “nudges” users into more appropriate dispute resolution. A series of nudges should be introduced at various points in the system to encourage active consideration of mediation. This low cost and non- coercive change could substantially increase the use of mediation in Scottish cases.

The “default” of the Scottish court system

At no point does the Scottish Court process or rules presume that parties are heading anywhere other than determination of their dispute by a Judge, Sheriff, or other party. Parties are not overtly presented with other processes for resolving their disputes nor encouraged to consider them. This is important as parties are therefore encouraged to continue to litigate, and discouraged from considering other possible methods of resolving their dispute, including mediation. Setting an outcome as the default strongly influences choices; to take a legal example, class action participation can greatly increase when an opt-out rather than opt-in system is adopted (reference 1). It is not unreasonable to think that the Scottish litigation system’s default of continuing to litigate further discourages parties from mediation.

What is a nudge?

Nudging is the behavioural economics approach of designing the choices presented to individuals in such a way that encourages them to choose more beneficial choices. It has seen immense growth in popularity over the past decade (reference 2), and is used by institutions across the globe (including the UK Government’s own “Nudge Unit”) (reference 3). Nudges are used in a variety of situations; to take a UK example, nudges have been used to increase the rates at which individuals pay their tax to HMRC (reference 4).

Nudges have two features that make them particularly appropriate for encouraging the use of mediation. Firstly, they are frequently cheap; they often simply involve re-framing a choice that an actor is faced with to encourage a beneficial outcome. As such, the introduction of nudges to encourage mediation in Scotland could require comparatively little public funding. Secondly, nudges are non-coercive; actors still have the option to litigate but instead are simply encouraged to mediate their disputes. In this way, party autonomy and the voluntary nature of mediation is preserved.

How the Scottish litigation system could change to nudge towards mediation

Changes to Scottish litigation do not need to be revolutionary or introduce a significant burden on lawyers and their clients – in fact it is preferable that the additional burden is minimal so that party autonomy is preserved. They also don’t need to impose a financial penalty on those who decide not to mediate; nudges have been effective in other contexts without this coercion.

Lawyers as the gatekeepers of the dispute resolution process should be a key target of the nudges. While lawyers have professional obligations to consider mediation for ongoing cases, the under-utilization of mediation in Scotland suggests that lawyers are making sub-optimal choices. Lawyers should be encouraged to thoroughly consider mediation at multiple points throughout the litigation process; including at the start of the litigation, at procedural hearings, and just prior to proof. By encouraging lawyers to pause and actively consider mediation where they may not otherwise do so, participation rates will hopefully increase.

However, lawyers must be nudged in such a way so as to not reduce the exercise to form filling; the changes must encourage lawyers to invest in considering the merits of mediation for each individual case. One possible system would be for lawyers to submit a short explanation of why mediation is appropriate or is not appropriate to the Court, and for the Court to then discuss those submissions at a then upcoming procedural hearing. There should not be a requirement for these submissions to meet an objective standard of reasonableness on threat of financial sanction as is the case in England; mediation can be encouraged, and party autonomy preserved, without this coercion.

Clients are different to lawyers in that they cannot be presumed to have prior knowledge of mediation. Instead, they could be encouraged to mediate by being issued a form outlining the benefits of mediation, then at the end of the form being asked if they would like to instruct their lawyer to try arrange for a mediation. Being asked this question in the context of just having the benefits of mediation outlined to them will act as a nudge by “priming” them towards mediation.

It is key that once a party has decided to mediate, it needs to be quick and easy to arrange to do so. It should be simple to identify a mediator with appropriate experience. To this end, SCTS, the Law Society, or another body should maintain a directory of mediators in a similar fashion to how a directory of solicitors is maintained. If it is not quick and easy to arrange for mediation, parties will instead be nudged away from mediation

Final thoughts

These changes are in no way meant to be comprehensive suggestions of how the Scottish litigation process could be reshaped into a dispute resolution process. They are merely a broad and high-level outline of some of the possibilities. Nor are the changes proposed meant to suggest that any changes need to be static; as nudges add minor additional burden to litigation participants, the nudges can be adjusted as data on their effectiveness is ingathered.

However, relatively inexpensive changes such as nudging parties towards mediation could have substantial effects. When lawyers begin seeing their peers chose to mediate rather than litigate, small nudges may snowball into substantial and long-lasting changes.

(First published in February 2021 as part of the CORE Challenge.)

Reference 1 - See a useful summary here: https://cms.law/en/gbr/publication/opt-out-class-actions-in-the-uk-are-we-entering-a-new- era-in-litigation (accessed 16 February 2022).

Reference 2 - Since its popularisation by scholars Richard H. Thaler and Cass R. Sunstein in their 2008 book “Nudge: Improving Decisions About Health, Wealth, and Happiness”

Reference 3 - Now known as The Behavioural Insights Team: https://www.gov.uk/government/organisations/behavioural-insights-team (accessed 16 February 2022)

World Bank Blog, The ongoing impact of ‘nudging’ people to pay their taxes

Reference 4 -
(https://blogs.worldbank.org/voices/ongoing-impact-nudging-people-pay-their-taxes) (accessed 16 February 2022)