From 22 May 2024, mediation will become mandatory in most small claim cases. The small claims track currently deals with cases valued up to £10,000.
Compulsory mediation will be rolled out later this year to small money claims under £10,000 issued via the Online Civil Money Claims service.
Parties in defended small claims cases will be required to attend a free mediation appointment before their case can progress to a full hearing. Mediation will be mandatory, meaning that the parties will have no choice but to mediate. Parties may face sanctions for failing to engage in mediation, which could include having a costs order made against them or having their claim struck out.
In such cases, there will be an automatic referral to a free hour-long telephone mediation session via a court appointed mediator.
It is expected that this reform will enable matters to be concluded more quickly for lower value claims by facilitating a proportionate and consensual resolution .
The introduction of mandatory mediation will not only help the parties in small claim cases to resolve their disputes effectively and consensually, it will also free up judicial resources. According to the Ministry of Justice, mandatory mediation could free-up nearly 5,000 sitting days per year to reduce waiting times for more complex cases to come to trial.
Plans to expand mandatory mediation to claims beyond the small claims track are already underway. The reform will be first applied to specified money claims, and then will be eventually rolled out to all claims issued under Part 7 of the Civil Procedure Rules. Plans to incorporate mediation to higher value claims will see mediation referrals to external mediators.
The direction of travel from the judiciary towards mediation is also clear. In November 2023, the Court of Appeal in Churchill v Merthyr Tydfil County Council ordered a stay of proceedings and for the first time ordered the parties to engage in Alternative Dispute Resolution to try to resolve their dispute out of court. The hope is that the introduction of mandatory mediation will significantly reduce the backlog of small claims cases in the County Courts and, in turn, delays elsewhere in the civil court system as the obligation to mediate is rolled out to higher value claims.
Compulsory mediation for small claims is to be welcomed by SMEs, individuals and larger businesses. Mediation offers the parties to a dispute the opportunity to resolve it privately in a much more cost-efficient way than proceeding to trial. In addition, outcomes can be achieved at a mediation which are more flexible and creative than what a judge can order at trial.
Further information about Mediation
Read Clare Mackay’s article “Why should you mediate”.
For help and advice on this topic or related issues, please contact Clare Mackay by calling 01727 798025 or emailing clare.mackay@salaw.com.
