The Ministry of Justice (MoJ) confirmed on 25th July 2023 that mediation will become mandatory in small claim cases. The small claims track currently deals with cases valued up to £10,000.
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. This is very like the Small Claims Mediation Service that has been offered by the Court in small claim cases for a number of years – but that has been voluntary and so both parties have had to agree to mediate.
This reform is expected to enable matters to be concluded more quickly by facilitating a proportionate and consensual resolution to these lower value claims. In the Impact Assessment prepared by the MoJ during the consultation stage, the MoJ found that 55% of the cases that currently go to the Small Claims Mediation Service are resolved, despite the fact the uptake for mediation is low.
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 MoJ, mandatory mediation could free-up nearly 5,000 sitting days per year and so 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.
There are still more details to come, but 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 given that mediation offers the parties to a dispute the opportunity to resolve their dispute privately; in a much more cost-efficient way than proceeding to trial; and that 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”.
To discuss compulsory mediation for small claims, or if you have a specific mediation issue you wish to discuss with a Solicitor, please contact Clare Mackay.
