Following government proposals towards the end of 2022, the Ministry of Justice confirmed on 25 July 2023 that mediation would be made compulsory in all small claims track matters (i.e. claims of up to £10,000 in value).
The move towards compulsory mediation seems to have been taken in an attempt to reduce the number of claims reaching court trial. On average, small claims are taking in excess of one year from issue of the claim to reach a trial, taking up valuable court time. Indeed, recent statistics show that specified money small claims (of under £3,000) take up around 80% of all newly issued claims in the County Court.
The government's proposal, which will start with these specified money claims (such as businesses seeking to recover their debt from customers), will eventually be extended to all claims issued under Part 7 of the Civil Procedure Rules. At present, no timetable has been provided as to when mediation in these claims will become compulsory.
The process for compulsory mediation will start following the defendant filing their defence and the claim being allocated to the small claims track. The parties will still complete a Directions Questionnaire, but rather than directions being set by the court, the claim will proceed to the small claims mediation service.
Parties will be given the opportunity to each have a separate one-hour telephone conversation with the appointed mediator, and if an agreement is reached, then a binding agreement will be drawn up and sent to the court. If a settlement cannot be reached, then the claim will be referred to a judge in the normal way and directions set through to trial. The judge will, however, be able to impose sanctions on any parties that does not agree to mediate.
Most importantly of all perhaps, is that the mediation will be free.
The hope is that the mediations will lead to more settlements of disputes, thus freeing up valuable court time for more complex cases.
Clearly not all cases will be suitable for mediation, especially those cases where the parties are so entrenched in their respective positions that only an independent judge will be able to decide who should be successful. However, despite this, parties will still have to go through compulsory mediation or face the risk of sanctions for refusing to take part.
Only time will tell whether compulsory mediation is a good thing or whether in fact it is an additional step in a claim which is unnecessary and leads to a further delay in the case reaching trial.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
