Scottish Government

6 IMPACT UPON COURT COSTS AND COURT RESOURCE ISSUES

6.1 The cost and resource analysis was carried out by DTZ. The Aberdeen and Glasgow services differ from the Edinburgh service in that a fee was charged on a sliding scale depending on the dispute value of the case. Fees were introduced to the pilot schemes to assess the impact on costs and uptake. These fees were applied at Glasgow Sheriff Court for the duration of the pilot period. However, it was decided early on at Aberdeen Sheriff Court not to charge fees for summary cause actions in order to attract more users to the service. Overall, fees were charged at Glasgow Sheriff Court amounting to £740 for seven cases and one fee was charged at Aberdeen Sheriff Court (£150). ²¹ The sliding scale is illustrated in Table 6.1.

Table 6.1 Sliding scale of fees

Source: CMS

6.2 The Scottish Government provided the funding to run the mediation services at both sheriff courts. Any future services that may be rolled-out will not be funded and must therefore be self-financing, hence the sliding scale fee charging. DTZ's focus was on the financial costs and time taken by cases to go through mediation.

Aims and objectives of DTZ's work

6.3 DTZ was commissioned to look specifically at the costs involved with the in-court mediation services in Aberdeen and Glasgow. DTZ considered the following elements.

• The financial cost and time taken by cases going through mediation, taking account of all relevant costs and benefits, including:
  • start up costs;
  • running costs (staff and other);
  • recurrent costs (e.g. longer term programmes); and
  • avoided costs/indirect benefits.
• The analysis concentrates on the actual start-up and running costs of the services compared with the likely costs saved in terms of similar actions taken through the Sheriff Court system.

6.4 Where possible, the cost analysis sets out costs on an annual basis, the potential benefits and the costs saved. Sensitivity tests are used to provide a range within which the actual level of costs/benefits is likely to vary.

Methodology

6.5 DTZ worked closely with the University of Aberdeen to carry out the cost analysis of the mediation services. Data was collected from three primary sources.

• Detailed information was recorded by CMS throughout the pilots and used to identify
  • Project start up costs
  • Recurrent costs
  • Average time spent on mediation services
  • Average cost per mediation
• Qualitative and willingness to pay information from questionnaires sent to service users and non users (discussed in chapter 5)
• Secondary data from external publications.
  • A review of secondary literature was undertaken in order to compare the costs of mediation with costs of court services. While this exercise was useful in order to provide some context to the study, not all the information reviewed was included in the cost evaluation.
  • Comparative data was limited, average cost per case information was taken from the Scottish Legal Aid Board Annual Report 2007/2008 estimates
  • Information on average times for sheriff court civil proceedings was estimated using data obtained from the Scottish Civil Courts Review 2007
  • Satisfaction data was taken from the 2007/2008 Scottish Court Users Survey

Primary financial and timescale data

6.6 Because the costs involved in the services at Aberdeen and Glasgow are different, where possible, data has been separated to show the Aberdeen and Glasgow costs separately. The main costs of the service were then calculated and any fees obtained from the service were subtracted from the total costs. Information was analysed for both the whole period (including start-up costs) as well as ongoing periods (recurrent costs). An average cost per mediation case was estimated by dividing the total costs by the number of mediation cases over the period. The time taken for mediation cases was also gathered by CMS according to the type of case (small claims or summary causes) and for cases going through the sheriff courts (civil litigation cases).

Qualitative data

6.7 The total financial cost of a service is just one way of assessing a service. It is also necessary to look at the qualitative benefits brought about by that service. This information was analysed in chapter 5 and was taken into account alongside cost analysis late in the concluding comments of this chapter.

Secondary data

6.8 In order to assess the cost savings of the service, comparative data on the costs and time spent on similar cases taken to court was used. Unfortunately, detailed information on costs of civil court proceedings was not readily available, so DTZ used the average cost per case figures for civil legal aid assistance in Sheriff Courts as a comparator ²². Comparable information on the time incurred through Sheriff Court civil cases was taken from the Scottish Civil Courts Review 2007 and further qualitative information was gathered from the Scottish Court Users Survey 2007/08. It should be noted that comparative information from the Scottish Civil Courts Review 2007 and the Scottish Courts Users Survey 2007/08 is not directly comparable with the results from the mediation service over the pilot period and a number of methodological issues were encountered. These have been outlined below.

Methodological issues

6.9 There are a number of difficulties in employing the method, which need to be stated. Results from the method need to be viewed against this context.

• Inconsistencies with source data. Data was provided from CMS. CMS allowed access to the original monitoring database where information on the numbers and types of cases was recorded, in addition, data on the fee levels was sent via spreadsheets. However, the data supplied to DTZ slightly differed from data supplied by them to the Scottish Government. This issue was raised with CMS, which confirmed to DTZ the total cases and fee levels. Throughout this report, DTZ has used the figures agreed by CMS. It is acknowledged that there may still be issues over the accuracy of the data, however, we believe that this is the best source of information available. It should also be noted that the discrepancies identified make little difference to the overall cost estimates of the service.
• Estimating service costs. Estimating service costs is difficult, especially when some of these costs are shared. We have attempted to accurately assess these costs, but may not have captured all shared costs.
• Time period and number of cases. The pilot services have been running for a relatively short period of time and there has not been a high volume of cases processed.
• Lack of available comparative information. Data on comparative costs has been taken from the Scottish Legal Aid Board. However, it should be noted that the methodologies used to calculate costs may differ. In addition, the type of cases mediated can differ from those eligible for legal aid. For example, small claims not relating to personal injury are not eligible for legal aid support, but small claims are frequently dealt with through the mediation service.
• Lack of detailed information. Cost and time information, particularly for comparative purposes, is lacking in detail. It is difficult, for example, to breakdown the costs involved (e.g. accommodation, overheads and staff) from the total cost information provided, limiting the depth of the analysis.
• Problems with assessing the cost of services. Where detailed costs are available from CMS, difficulties arise in determining which costs are absorbed by the court service, and which costs are associated exclusively with the in-court mediation services (e.g. overheads, accommodation and staff). For the purposes of this study, we have used the total costs provided by CMS.
• Questionnaire sample sizes. These were low for cost and willingness to pay information, particularly for the non mediation users.

Cost of mediation services to the court

6.10 Data obtained from CMS, along with other sources, has been used to assess the costs and benefits of the mediation service. These are then compared with the costs and benefits of similar cases that were taken through a sheriff court. For the purpose of the report, financial cost information has been broken down into four different areas.

• Actual costs of the service, i.e. the cost of running the pilot, with the fees charged reduced from the cost.
• Costs without fees, to provide a baseline measure of what the costs for the service would be if fees were not applied.
• Costs if fees had been charged as initially planned, to provide a baseline measure of the costs for the service if it had been implemented as planned
• Costs with fee levels determined by willingness to pay information, to provide an indicative measure of costs if fees were charged based on service users' willingness to pay.

6.11 This builds in a degree of sensitivity testing around costs, i.e. assessing the difference in total and average costs based on varying assumptions and will be helpful in assessing the cost implications of any future national roll-out of the service. Again, it is worth highlighting that there were some queries over the original data used. For the purpose of this analysis, DTZ has explored different cost options based on the data provided by CMS.

Actual costs of the service

6.12 Table 6.2 provides a breakdown of the actual total costs of the pilot mediation service, i.e. the cost of the service minus the fee income for both Aberdeen and Glasgow.

Table 6.2 Total costs of the mediation service in the pilot period

Source: CMS

6.13 Overall, the cost per mediation case across the whole pilot project was £1,138. Excluding the start up costs, the on-going average costs per mediation case was around £970. We attempted to provide a breakdown of the total costs of the mediation service in both Aberdeen and Glasgow. In some instances, the costs were only available for the whole pilot area. Where this is the case, assumptions, agreed with CMS, have been made in order to breakdown the costs in each city.

6.14 Overall, the cost per mediation case in Aberdeen was £1,142. Excluding the start up costs, the on-going average costs per case was £953. Table A6.5 in Appendix 6 (online report) outlines the total costs involved for the mediation service in Aberdeen. Table A6.6 outlines the total costs of the mediation service in Glasgow. Overall, the cost per mediated case in Glasgow was £1,135. Excluding the start up costs, the on-going average costs per mediation case was £981. Average costs in both cities were, therefore, broadly similar.

Costs without fees

6.15 In order to allow cost comparisons, it is useful to establish the cost of the service excluding all fees, and this is outlined in Table 6.3 for the whole pilot area. Charging fees per case only reduces the overall costs by less than £7 per case across the whole pilot area.

Table 6.3 Costs of the service excluding all fees

Source: DTZ

Costs if fees had been charged as initially planned

6.16 Table 6.4 shows an approximation of the cost per case at the Aberdeen Sheriff Court assuming that fees were charged as originally planned. As already stated, the fee charging arrangement at Glasgow ran as planned for the whole duration of the pilot period. Fees at Aberdeen, however, were not charged except for one early case. Table 6.5 and Appendix 6 (online report) Table A6.2 at the total costs of the service had fees been charged as initially planned. The results show that fees could potentially have reduced the total cost per case of the service at Aberdeen from £1,142 to £1,126, a saving of £16 per case. Had these fees been levied at Aberdeen, the overall cost per case at Aberdeen and Glasgow would have fallen also. This would have saved nearly £1,800 compared to not introducing any fees. However, it should be noted that were the fees at Aberdeen introduced, the number of service users may have been lower.

Table 6.4 Costs of the mediation service in Aberdeen had fees been charged as planned

Source: DTZ

Table 6.5 Costs per case had fees been introduced as planned ²³

Source: DTZ

Costs with fee levels determined by willingness to pay information

6.17 As an indicator of satisfaction levels and a proxy for what users are prepared to pay in fees, questionnaire respondents were asked whether they would be prepared to pay for the in-court mediation services. The results are summarised in Tables 6.6 to 6.8. For the service as a whole, mediation users were willing to pay on average £54, higher than non users at £42. This indicates a level of satisfaction of the service received. This is substantiated by 65% all respondents saying that they would either use the mediation service for the first time or use it again.

Table 6.6 User willingness to pay: all mediation service users

Source: DTZ analysis of the University of Aberdeen's Court Users Survey
*33 respondents in total
** 11 respondents in total

6.18 In Aberdeen, all respondents were prepared to pay, on average, £54 for the mediation service. Mediation users reported that they would pay between £40 and £90 and on average £65 for the service, higher than non users who would pay between £20 and £47, £34 on average. In Glasgow, mediation service users are willing to pay less for the service, between £29-£67 and £48 on average. This is slightly lower than that for non-users.

Table 6.7 User willingness to pay: Aberdeen

Source: DTZ analysis of the University of Aberdeen's Court Users Survey
*11 respondents in total.
** 6 respondents in total

Table 6.8 User willingness to pay: Glasgow

Source: DTZ analysis of the University of Aberdeen's Court Users Survey.
*22 respondents in total.
**5 respondents in total.

6.19 These results indicate that both users of the mediation scheme and non users view the service as valuable and would be willing to pay for it. It should be stressed, however, that responses for non mediation users were low, with only 11 respondents across both Aberdeen and Glasgow.

6.20 The willingness to pay figures can be used as a rough proxy of how much people would pay in terms of fees. Outlined in Table A6.9, is an approximation of the cost per case had the fee levels been determined by average willingness to pay. Costs per case to the court across Aberdeen and Glasgow work out at around £45 cheaper when willingness to pay fees is applied. This would bring a total saving of just over £7,000 (or 4% of total costs).

Financial costs to the user

6.21 Users of both mediation and non mediation services were asked to estimate the costs involved in their case. Respondents were asked both about the actual costs involved as well as their perceived cost of the alternative service, be it mediation or court procedure. The questions were as in Figure 6.1.

Figure 6.1

6.22 Table 6.9 provides findings on the average cost to users of the mediation service, along with the cost to users of the standard sheriff court procedure for the whole Aberdeen and Glasgow pilot area. Users of both mediation and non mediation services were asked to estimate the costs involved in their case. Respondents were asked both about the actual costs involved as well as their perceived cost of the alternative service, be it mediation or court procedure: However, it should be noted that the number of respondents who gave costing information was low, particularly for those who did not receive mediation. Information was particularly scarce for those non mediation users giving perceived cost information. Responses to questions on the cost for mediation service users were higher, although still relatively low and, for this reason, a breakdown of costs between Aberdeen and Glasgow was not possible. Low response rates do affect the accuracy of data and for more robust information a much larger sample should be used. Nevertheless, the findings do provide an indicative measure of personal costs.

6.23 The results show that, on average, the costs for mediation service users were lower (£267 on average) than the alternative court service (£328 on average). This represents an average saving to mediation service users of £61. The perceived cost of mediation is also much lower for non users, at just £108 on average, compared with the perceived cost of a traditional court case (£779 on average) by mediation service users. These results indicate that the mediation service has been relatively cheaper in terms of actual costs and, furthermore, both service users and non users perceive the mediation service to be cheaper.

Table 6.9 Summary of personal costs for all mediation service users (Aberdeen and Glasgow)

Source: DTZ analysis of the University of Aberdeen's Court Users Survey

Cost of comparable services

6.24 We attempted to assess the costs of the mediation service with that involved in a typical case brought through the sheriff court system. The following sources were examined to provide this information.

Table 6.10 Sources of information on the costs of comparable services

Source: Scottish Legal Aid Board

6.25 Information about the actual cost of litigation in Scotland is not readily available, but some information is available from the Scottish Legal Aid Board. This information is detailed in Table 6.11 and based on accounts paid and case costs to the Civil Legal Aid Fund.

Table 6.11 Cost of civil litigation cases in Scottish Sheriff Courts

Source: Scottish Legal Aid Board

* Outlays are specifically related expenses only and include travel expenses, court fees, expert witnesses and any other unusual expenditure. They do not include the general accommodation costs for a solicitor.

6.26 For the purposes of this report, the average cost per case in 2007/08 will be used as a cost comparator. However, it should be noted that while the cases funded by Legal Aid are civil cases, many of the cases going through the mediation service would not be eligible for legal aid support. In addition, the methodology used to assess total costs may differ as they are calculated on a case by case basis. It is probable that actual costs per sheriff court case are even higher given that accommodation and other staff costs are not included in the total. The Scottish Court Service does not formally collect information on the cost per case for civil litigation, however, estimates on the cost of summary cases going through sheriff courts for 2006/07 is around £1,700 per case. This figure includes staff, accommodation and judicial costs but does not include solicitor or witness costs. Given the lack of available data on the cost per case for civil cases, the Scottish Legal Aid Board figure was deemed the most appropriate comparative figure to use as it appeared to be the most complete. This provides some broad comparison, but, as highlighted already, direct comparisons are very difficult here and the results should be seen in this context.

Timescales

6.27 Table 6.12 gives a breakdown of average days involved with mediation, from start (i.e. when the mediation was originally arranged) through to closure.

Table 6.12 Average time for mediation cases (days)²⁴

Source: DTZ analysis of CMS data

6.28 For Aberdeen and Glasgow, mediated cases last on average 30 days. As a comparator, we considered the number of days involved in a civil litigation case. There are no official figures on the time spent per case from inception through to closure but according to the Scottish Civil Courts Review, in 2006/07, there were approximately 9,292 sitting days in Scottish Sheriff Courts for civil litigation cases and, on average, a 10-week waiting period. When these times are aggregated and then divided by the total number of civil cases, the average time spent on sitting and waiting periods is approximately 50 days per civil case, although it has to be accepted that many civil cases will be non-continuous and, therefore, in practice, will take less days than this on average. Although the methodologies used to calculate time spent is not the same, and therefore not directly comparable, there is some indicative evidence that mediated cases are quicker than civil cases through the Sheriff Court.

Final comments on cost and benefit analysis

Costs

6.29 Appendix 6 (online report) Tables A6.1, A6.2 and A6.3 outline the actual cost and cost per case of the mediation service overall and in Aberdeen and Glasgow individually. DTZ varied these costs on a 'no fees' basis, 'fees charged as planned' and 'willingness to pay' basis, concluding that fee income would only make a minimal difference to overall costs. The experience in Aberdeen also seems to demonstrate that not charging fees does encourage use.

6.30 The average actual cost per case in Aberdeen was £1,142 for the whole pilot period; recurrent costs were around £953. The average actual cost per case in Glasgow was £1,135 for the whole pilot period; recurrent costs were around £981. This compares well with the comparative costs for civil litigation cases brought through the sheriff courts at £2,044 per case. In addition, personal costs to users of mediation services were £61 lower than that for those using the traditional sheriff court procedures. However, these results have to be qualified by the fact that the mediators provided their services free of charge and this may not be sustainable.

Benefits

6.31 As well as the savings in direct costs as outlined above, there were a number of other benefits to using mediation services, although we need to qualify these findings due to the lack of directly comparable data and the relatively small sample sizes used.

• Time savings - the average time spent on summary causes in Aberdeen was 29 days for summary causes and 20 days for small claims. In Glasgow, average times were slightly longer at 44 days for summary causes and 37 for small claims. Estimates of comparable time spent per case for civil litigation cases going to the sheriff was around 50 days. The mediation service therefore brings a time savings benefit, which may be related to cost savings. This is verified by the high satisfaction levels from users when asked about the time spent on the case (see figure 5.4).
• Satisfaction levels - as discussed in chapter 5, overall satisfaction levels were higher for mediation service users. Satisfaction levels are highest for the time spent on mediation and the overall experience of mediation. The cost and time savings appear to be related to the greater levels of satisfaction felt by mediation service users.
• Case outcomes - over 90% of mediation users in Aberdeen reported that the terms of agreement of their case had been settled compared to 75% of non mediation users. In Glasgow, 86% of mediation service users reported their terms of agreement were settled, compared with 57% of non mediation users. Although sample sizes were low, these results indicate that mediation works more effectively than the traditional sheriff court system in settling cases.