A global impasse: commercial mediation is not available in 40% of the world’s economies

In the field of commercial dispute resolution, large and high-profile cases tend to draw public attention to proceedings before supreme courts and investor-state arbitral tribunals. This seems hardly surprising, given that such disputes tend to concern critical issues for the business community. Yet the preoccupation with large and high-profile cases may mask the grimmer realities of dispute resolution. According to the latest edition of the World Bank Business Ready report—B-READY 2025—on a day-to-day basis, businesses don’t have access to commercial mediation in more than 40% of economies measured thus far.

In these economies, often the only mechanism for resolving business disputes is court litigation; however, its adversarial nature can strain future relationships between the parties and the process is typically lengthy and expensive, especially due to attorney costs. Entrepreneurs who wish to settle their disputes amicably, on mutually beneficial terms, and with less time and financial resources, could of course try negotiating a resolution with the other side of the dispute. 

But bilateral settlement negotiation is typically not as effective as mediation. Mediation adds value because the third-party mediator can help improve communication and diffuse conflict, assist the parties in looking beyond legal claims and remedies toward practical business solutions, and help them assess the risks and costs of litigation more objectively. Having no access to mediation services can therefore negatively affect business operations. For example, some firms may become more risk-averse and less innovative in order to avoid potential disputes, while others, who have already faced a dispute that tied up a significant portion of their capital, may be driven out of business altogether.

For the 101 economies measured under B-READY 2025, data for the Dispute Resolution topic shows that commercial mediation is available and practiced in only 57 locations (56%), leaving businesses in 44 economies (44%) with no such option. Mediation is deemed available and practiced when such services are provided de facto and more than 25 business cases have been resolved through this mechanism over the past year. This minimum threshold is necessary to ensure that the practice of mediation is not merely incidental, even if it is not widespread. Both court-annexed and private mediation are considered.

The analysis of the data by legal system, income group, and region offers additional insights. Regarding the type of legal system, commercial mediation is more widely implemented in common law economies, compared to civil law jurisdictions (Figure 1).

In common law settings, firms can enjoy access to mediation in 73% of economies, which contrasts with the situation in civil law jurisdictions, where commercial mediation is available and practiced in 49% of economies only.  This difference is more pronounced than might be expected and raises the question of whether there are aspects of the common law tradition that are particularly hospitable to the uptake of mediation. Possible explanations may be attributed to the common law being regarded as more adaptable to change from the bottom-up and allowing greater scope for private ordering without express legislative or regulatory authorization. At the same time, these jurisdictions are also known for their distinct adversarial process that tends to drive up the cost of litigation and thereby create powerful incentives to resolve disputes consensually. In fact, based on B-READY 2025, average attorney fees tend to be significantly higher in common law economies (19% of the claim value) than in civil law jurisdictions (11%).

The data further show that businesses in high-income economies are more likely to enjoy mediation services, where they are available and practiced in 68% of covered economies (Figure 2). Access to commercial mediation then tends to decline along with an economy’s income level.

In the upper-middle-income group, mediation is available and practiced for business disputes in 62% of economies; in the lower-middle-income group, in 53% of economies. While the same trend holds for low-income economies, the reduction in access to commercial mediation in this income group is particularly significant: it is available and practiced in less than 20% of economies only.

One would expect mediation services to be in more demand and thus more widely available in higher income economies, where commercial activity and associated disputes are likely to be both more common and of higher value. But mediation may play a more critical role in lower income settings, which are often beset due to crushing court backlogs and procedural dysfunction, by unlocking business potential and stimulating entrepreneurial activity. 

An examination of the data by region is equally important. The B-READY 2025 dataset reveals that access to commercial mediation appears to be the highest in South Asia (100% of economies) (Figure 3).

This finding however warrants a cautious interpretation: although all four economies studied in South Asia (Bangladesh, Bhutan, Nepal, and Pakistan) have implemented mediation services for their businesses, only half of economies in the region have been measured so far, and the true extent and nature of mediation services available remain subject to further investigation.

The South Asian economies are followed by the OECD high-income region (71% of economies), Europe and Central Asia (67% of economies), East Asia and Pacific (64% of economies), and Latin America and the Caribbean (64% of economies). The availability and practice of commercial mediation are notably less prevalent in Middle East and North Africa (50% of economies) and Sub-Saharan Africa (26% of economies). In these two regions, businesses are likely to benefit the most from initiatives aimed at introducing and promoting mediation services.

As can be seen, substantial progress is needed to ensure that businesses worldwide can access mediation services in practice. Reforms in this field may help economies boost entrepreneurial activity and improve the overall business and investment climate. What also emerges from the B-READY data is that the implementation of mediation varies widely from one economy to another. This may or may not be related to the effort and resources poured into mediation development; structural factors (common versus civil law, income level, regional and cultural differences) may also explain why mediation reforms have met with success in some settings but not others. Adopting legal frameworks for mediation, such as passing mediation acts or ratifying the Singapore Convention on International Settlement Agreements Resulting from Mediation, are often first steps on the path to reform but rarely effective on their own.

Cultivating a robust and sustainable mediation ecosystem may necessitate a systematic review of the dispute resolution system as a whole, with a focus on identifying and addressing structural bottlenecks, expanding institutional capacity, and fostering a culture that embraces negotiation and compromise.

The authors are thankful to Isaac Laschewitz Cicatto for great research assistance.