There is little doubt that the Woolf reforms heralded a new era in alternative dispute resolution (ADR), with mediation taking an unprecedented role in sorting out conflicts between parties.The benefits of mediation are clear.

Generally quick and cheap, it enables disputing parties to retain control and reach an agreement while preserving their existing relationship.

The only surprise is that mediation is used comparatively rarely in the UK.Geoffrey Greenhouse, chairman of the Association of Mediation Solicitors, says: 'The idea of mediat ion is still new.

Although it started ten years ago, with the Centre for Effective Dispute Resolution (CEDR) at the forefront, it didn't really catch on.

In other countries, mediation is very much part of the legal process.

In the US, for example, mediation is ordered automatically by the courts in many cases.'CEDR's chief executive, Karl Mackie, stops short of calling for mediation to be made mandatory, but says: 'Courts should be looking for good reasons not to use it, rather than saying that people don't have to.

It should be strongly encouraged by judges.'In the past 12 months CEDR has reported a 9% increase (to 27%) in the cases it dealt with which were referred directly from the court (see [2001] Gazette, 28 June, 1).

The mediation specialists also said that 8% of its users in the last year were from the public sector; previously, the number of users in that sector was too few to count.CEDR also scored a recent first in the financial sector after being chosen through a tender process to be the retained mediation providers for the Financial Services Authority (FSA).Professor Mackie says: 'This is significant because it is the first major use of mediation in regulatory disputes.

Following consultation in the City, many lawyers said that in addition to the blunt axe of disciplinary proceedings, there are many cases where negotiation would be more appropriate and acceptable.'Tony Willis, a former Clifford Chance partner who now acts as a mediator on an almost full-time basis, says: 'This sort of thing has been done in the US and Australia for quite a long time.

It's a good move.

It strengthens the power of mediation in a different atmosphere.

I hope it has a huge take-up.'Mr Greenhouse comments: 'This shows that mediation is being accepted by the commercial world as a real and serious alternative to litigation.

It always used to be seen as touchy-feely, with peace breaking out everywhere and everyone holding hands and humming.'Mr Willis says in-house lawyers are major drivers in using mediation.

'They see it as a way of controlling spend and controlling risk.'A recent survey of 202 businesses, carried out by CEDR and Pinsent Curtis Biddle, showed the number of in-house lawyers who see mediation as their preferred method of dispute resolution has doubled to 24%.

Of those who have used mediation, 70% said the experience was a positive one, while 54% said they expected their use of mediation to increase.Another recent breakthrough in the commercial sector came recently when InterMediation, the City-based commercial mediation provider, was appointed to operate ADR clinics with the International Underwriting Association and Lloyd's.

The once-weekly clinics will provide guidance to IUA and Lloyd's members on ADR options.Peter Ashdown-Barr, chief executive officer of InterMediation Ltd, says: 'The Lloyd's market recognises the need for practical guidance and access to mediators.

Institutions are acknowledging that the time for promoting mediation is passing -- the time for integrating it into their practices has arrived.'Professor Mackie says: 'We have done similar schemes in the insurance market.

It's all part of the process of breaking down the barriers in terms of ignorance of the way it works.'Mr Greenhouse, a member of the Law Society's ADR working party, says another big development was the pledge by the Lord Chancellor's Department that it would use ADR and mediation wherever possible in place of litigation.Government legal disputes now go to court only as a last resort, and standard government procuremen t contracts will include clauses on using ADR instead of litigation.Mr Greenhouse says: 'This will force people in government to sit down and actually talk to people they are in dispute with.

It's a brave thing to do and will make a huge difference.

It's a great step for democracy.'However, despite the sharp rise in mediations following Woolf, the method appears to have reached a plateau of late.

Although the total value of CEDR's disputes was more than £1 billion in the last year, it reported a rise of only five in the total mediations conducted during 2000/2001 -- 467 compared with 462 the previous year.Mr Willis says: 'More cases could be resolved by mediation.

Whatever number CEDR has done in the past year it will still be a minor proportion of the number of cases winding their way through the court system.'Lots of people now in the commercial areas use mediation but among the general populace, many have not even heard of mediation and wouldn't know where to get a mediator.

A lot more could be done.'He adds: 'We are operating in a society which has an extremely adversarial court system.

We have to recognise that in our society people don't generally regard settling a problem by agreement as an option -- they would rather sue the pants off somebody.'He says that mediation is not used in large swathes of the justice system, with personal injury, which makes up a large percentage of cases going through the courts, being a prime example.Professor Mackie says: 'We are at an early stage in use of mediation in clinical negligence and although it is growing, it is still small.

There are also areas of public law where there is probably more scope for experiments, such as judicial review, planning and even human rights proceedings.'Certainly change may soon be on its way soon in the field of clinical negligence, where a wide-ranging consultation -- announced last week by Health Secretary Alan Milburn -- will consider more widespread use of mediation in the NHS.Professor Mackie adds that in the insurance sector, the approach of the claims handlers is generally 'very traditional' and it is only slowly introducing mediation as a technique.A report from Bristol University earlier this year revealed the majority of cases referred to mandatory mediation under section 29 of the Family Law Act 1996 found solicitors' advice more helpful than mediation.Peter Watson-Lee, partner with Christchurch firm Williams Thompson and chairman of the Law Society's family law committee, says he knows why.He says that one problem is that the Lord Chancellor has seen mediation as a cost-cutting exercise.

'The whole section 29 procedure -- which triggers compulsory mediation -- is wrong.

It has also been assumed solicitors shouldn't be involved in mediation, which is why it has not been working in family cases.

If solicitors could be encouraged to be involved I think it would be more widely used.'Mr Greenhouse admits the number of court-referred commercial mediations has not grown as much as it might.'Court referrals aren't what we had hoped.

One of the main difficulties is that judges are concerned as to whom to send it to.

They are not confident that there are mediators out there with sufficient training and experience.'Mr Greenhouse says he hopes the Law Society mediation panel -- scheduled to be implemented by the end of this year -- might help to alleviate this problem and provide more lawyers with mediation experience.'We hope to have about 500 people on the panel -- including non-lawyers.

The panel will help those who have done the mediation course but haven't been able to get experience.

Panel members will be encouraged to take an assistant with them when mediating, thus giving opportunities to the inexperienced.'He adds: 'Mediation and other forms of ADR are the way forward.

The growth will not be driven by lawyers, though; it will come from judges and clients.

Lawyers tend to litigate, and feel an early resolution will lose them fees.'However, Mr Willis points out that most law firms see mediation 'as another tool in the tool kit', while Professor Mackie adds: 'If you ask clients, they would say that lawyers would be against mediation because they get less fees.

This is true of some but most lawyers are professional and look at it as a way of enhancing their reputation by solving the clients' problems and getting repeat business.

They have to go with what's best for clients.'