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The Role Of Mediation In Tackling Neighbour Disputes And Anti-Social Behaviour

7. COSTS OF MEDIATION AND LEGAL ACTION

Cost of mediation: background

7.1 Despite the growth of mediation, information on its relative cost effectiveness is limited. It has been suggested that comparing costs of mediation with litigation is 'not always a useful exercise', because most disputes do not come to the attention of official bodies, and if they do, they are handled by a range of agencies and means (Mulcahy 2001). For mediation services in particular, there are two main challenges to costing:

a. mediation may be introduced at various points in a dispute, making comparison of like with like difficult;

b. costs depend on the range of agencies involved, which in turn depends on their degree of specialisation.

7.2 In their survey of mediation in England and Wales (Dignan, Sorsby and Hibbert 1996) adopted a mixed-method approach to cost-effectiveness allowing them to assess relative costs of mediation in neighbour disputes. Dignan and colleagues emphasise that not all neighbour dispute cases are suitable for mediation but in instances where mediation is used, there are significant cost savings made to a number of agencies. In their later study in Scotland, Dignan and Sorsby (1999) did not calculate average costs per case of mediation in Scotland, but extrapolated from their previous English study. It compared average costs per case and concluded that community mediation was more expensive than informal intervention, but cheaper than the formal intervention that may be required when disputes persist.

7.3 It was decided to calculated net costs in the present study, that is, the costs of staff time and travel costs that can directly be attributed to cases. These net costs exclude organisational overheads, that is, building and office costs, staff training, and central services such as personnel. To calculate these total costs would require detailed examination of the finances of each organisation, including large local authorities, which is a task beyond the scope of this study. The reader must bear in mind that total costs including overheads can be assumed to be at least 40 to 50 percent higher than the net costs presented here. To use net costs, however, offers a more accurate comparison between mediation and legal cases.

Costs of mediation cases

7.4 From the 100 cases studied, 'average' costs per case of neighbour dispute to a mediation service were calculated ( Table 15). From this research, the average cost of mediation in a neighbour dispute is 121 per case, with community mediation services being higher than in-house mediation services (136 compared to 105). Where face-to-face or shuttle mediation was involved, the average cost of a case rose to 204. One community mediation service dealt with the two most costly disputes (costed at 484 and 431). These each involved over 20 hours of mediation time (face to face in one case and shuttle in the other). One dispute concerned loud music, shouting, swearing and verbal abuse, similar in description to some of the anti-social cases dealt with by legal remedies; the other involved domestic noise and verbal abuse but had clearly escalated to serious proportions.

7.5 The minimum and maximum costs per type of neighbour dispute contacting mediation services is presented to show the breadth of costs per case, from which it is clear that there is no 'average' case. A small number of cases from local authority mediation services involved initial contact only with one party; this reduces the average costs considerably. As shown earlier, there is no association between the type of dispute and the nature of the intervention. Cost of case is related to the time and intervention input into the case. As would be expected, there is no pattern of cost across type of dispute ( Table 15), but the cases which result in an agreement or improvement of the situation are more expensive, due to the additional work involved ( Table 16).

Table 15: Average cost by nature of dispute: mediation cases

Table 16: Average cost by outcome: mediation cases

7.6 As part of the present research, where possible, data regarding annual service costs with overheads and case load were gathered in order to provide a baseline for comparison of our sample of cases. For one community mediation service, for example, in the 2001-02 annual budget of approximately 150,000, mediation in neighbour dispute was allocated 125,000 of the overall budget. The service cited that their case load was 250 cases per annum. It can be crudely estimated that the average total cost of a mediation case, including non-case-specific tasks, is 500.

7.7 In the 1996 English study, the average cost per mediation case was estimated, based on time sheet data from one mediation service, as 252 (Dignan, Sorsby and Hibbert 1996). This, however, included non-case-specific administrative tasks; and is therefore probably comparable to the average costs calculated in the present study. These are also similar to the costs per case estimated by Mulcahy (2001). Mulcahy's study identified three categories of costs. Average cost per case was 410, of which 226 was specific case tasks (plus 75 general mediator tasks such as monitoring and liaison, and 109 organisational overheads). Only a detailed examination of the finances and activities of mediation services would provide an explanation as to why case-specific cost are lower than in Mulcahy's study. Community mediation services do from time to time deal with very complex cases with multiple parties. It is likely that had even one such case fallen within the sample taken for this study, it would easily raise average costs considerably.

Cost of legal action: background

7.8 In relation to community mediation, Mackay and Brown (1998) found that the degree of involvement of other agencies, and the resulting additional costs, may bear more relation to the relationships between agencies than the nature of the dispute. This point can also be made in relation to legal action; for example, it may be that local authorities have generally better liaison with police than housing associations do; and that liaison between housing, social work and environmental health services is variable across local authorities. Notices of proceedings may be used to encourage social work services to take action, which may lead to additional costs but to better outcomes. There may be geographical variation in the priorities of prosecutors or police, which influences their involvement in neighbour disputes.

7.9 Little information is kept by the organisations involved on costs of Anti-Social Behaviour Orders and related measures. Atkinson, Mullen and Scott (2000) found the average cost of an action for possession (at 1999 prices) to be 3,200, and of an interdict as 1,175. This was based on a small sample of seven possession actions and two interdicts. A complex, defended repossession case could cost up to 7,500, although undefended cases cost in the region of 1,500-2,000. Campbell's survey of local authorities in England found the average cost associated with an ASBO to be 5,350, with a range from under 400 to 18,000 (Campbell 2002). Findings from the present study can readily be reconciled with this previous research.

7.10 Fifty cases were examined from across nine housing management or investigation services, and costs calculated using the assumptions given along with the data in the Appendix. In an attempt to separate the costs from those of housing management, costs are calculated from the decision to take legal action or the issue of a Notice of Proceedings. Where no specialist team exists, the costs to housing management may be much higher, and more difficult to calculate. Compared to the calculation of community mediation services, organisational costs of dealing with disputes were more challenging to disentangle from the overall budgets of the organisations. For example, neighbour dispute work forms only a tiny proportion of total activities of a local authority housing department.

Costs of legal cases

7.11 From the 50 cases studied, 'average' costs per legal action were calculated ( Table 16). It can be suggested that the average cost of formal action by housing or legal departments in a neighbour dispute is 3,546, with a range from 339 to 13,962.

7.12 The average costs of an Anti Social Behaviour Order was about 2,250 but varied considerably ( Table 18), between approximately 500 and 8,500. Once eviction action is taken, the average costs and the range of costs are higher. Where a repossession action followed breach of ASBO, the costs rose to up to 7800. In cases where eviction was pursued without an Anti-Social Behaviour Order, the costs per case were on average over 9000 with a range up to just under 14,000 - these are likely to be the most serious cases.

Table 17: Cost by nature of dispute: legal cases

7.13 Even if the formal action is not pursued as far as court, the costs are much higher than mediation. In the sample of 50 cases studied, five cases had insufficient evidence to pursue the case, costing on average 1100 per case, and another two cases showed improvement (therefore proceedings were deferred) and cost just under 1400 per case.

Table 18: Cost by intervention/outcome: legal cases

7.14 As part of the present research, where possible, data regarding annual service costs with overheads and caseload were gathered in order to provide a baseline for comparison of our sample of cases. For specialist team A, for example, the 2001-02 annual budget was approximately 198,000 for salaries including travel. The team estimated their caseload as 170 new cases each year. Ignoring that some cases may extend over one financial year, a very conservative estimate would be a cost of 1,165 on average per case. Specialist team C calculated average cost per case at 1,300, 1,100 if the out-of-hours service is not used, 1,600 if it is. These figures are considerably lower than the average cost calculated above; this is because specialist teams deal with a high proportion of cases where legal action is not pursued and which are therefore less costly.

7.15 Particularly where co-operation with police and courts is good, however, the actual cost of taking legal proceedings may be relatively low. In authority E, information is compiled and sent to Counsel for preparation of a writ. Costs per writ are Counsel's fees of 250, plus around 50-100 of solicitors' time. On the other hand, much work in tackling each case is done by a multi-agency liaison group, including police, housing associations and several local authority departments, the costs of which are absorbed by the housing service. Thus costs are a reflection of organisational arrangements as much as the seriousness of the case.

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