In July this year, the Ministry of Justice announced that mediation will soon be compulsory for money claims worth up to £10,000. The change, which follows a year-long consultation on increasing the use of mediation in the civil justice system, is the clearest sign yet of a decisive shift in approaches to mediation: from encouragement to compulsion.
In this blog post, we look at how the new compulsory mediation scheme will work, and what this change can tell us about the future trajectory of the role of mediation in litigation.
How the new scheme will work
The key features of the scheme are straightforward.
- The government proposes to make mediation an integrated, essential step in the litigation process for all small claims in the County Court ("small" claims are generally those worth under £10,000) issued under Part 7 of the Civil Procedure Rules. There are no exemptions – either for specific categories of claim, or on an individual basis.
- Once a case is defended and the parties have returned the standard questionnaire, the case details will be handed to the Small Claims Mediation Service, which currently provides free voluntary mediation to resolve small claims (albeit on a much smaller scale).
- Mediation will be by way of a one-hour telephone call. A mediator will speak to each party in turn – the parties will not speak to one another – and will then shuttle between the parties to take questions and concerns and explore areas of possible compromise. If an agreement is reached, it will be recorded in a formal, binding settlement agreement and registered with the court.
- If a party does not attend their scheduled appointment, a judge may apply a sanction at their discretion. The non-attending party may be penalised in costs. More dramatically, they may find that their claim is struck out altogether and judgment given for the other party. For the time being, there will be no sanction on parties who attend the appointment but refuse to engage meaningfully with the mediation.
What will change?
The implications of these proposals are significant.
While the importance of mediation and other forms of ADR has been acknowledged in the Civil Procedure Rules for 25 years, the wisdom of compelling parties to mediate against their will has been debated for almost as long. In 2004, the Court of Appeal in Halsey v Milton Keynes General NHS Trust held that while parties who refuse unreasonably to mediate could face costs sanctions, forcing a party to mediate would be an unlawful interference with their right of access to the courts in breach of Article 6 of the European Convention on Human Rights.
Compulsory mediation has been criticised on other fronts, too: Lord Justice Jackson dismissed the idea in his 2009 Report on Civil Litigation Costs as an impingement on judges' discretion over case management, while the Civil Justice Council's ADR Working Group has noted that even adherents of mediation see compulsion as a threat to the essential voluntary quality that makes it so successful.
Regardless, the attitude of the justice system has shifted considerably since Halsey in favour of compulsion – prompted in part, no doubt, by steadily increasing pressures on the court system. In 2021, the Civil Justice Council concluded that, given case law since Halsey, the original objection to compulsory mediation on Article 6 grounds is no longer valid. By 2022, the CJC was recommending (in its Report on the Resolution of Small Claims) that mediation should be compulsory for claims worth up to £500, clearing the way for the present proposals.
The future of compulsory mediation
Despite its obvious virtues and success rate – around 90%, by the Centre for Effective Dispute Resolution's latest reckoning – mediation has long struggled to gain the favour it deserves among litigants. Some form of compulsory mediation is therefore welcome, though it is unlikely to be as successful as standard mediation in the form proposed (notably, the Small Claims Mediation Service's success rate, quoted by the government as just over 50%, is far lower than the sector standard). It also remains to be seen whether this proposal or its implementation is challenged in the courts: no court has yet conclusively ruled on the lawfulness of compulsory mediation, and the CJC's conclusions on the subject were not universally accepted at the time (including by the Law Society).
Nonetheless, the government's enthusiasm for compulsory mediation should be clear enough from how far the CJC's original recommended value limit of £500 has been exceeded. Indeed, it has signalled its intention to go further, making mediation an integral part of the litigation process for claims in the fast and multi tracks. Unless the current pressure on the civil courts begins to ease, such an expansion is only a matter of time.
Carrying out this expansion will raise tricky issues, and it remains to be seen how the government will respond to them. For one thing, the government acknowledges that the form of mediation currently made compulsory, with its time constraints and lack of inter-party dialogue, is atypical and unlikely to be suitable for high-value or complex claims. Even the more complicated small claims will struggle to settle in an hour. Compulsory mediation outside of the small claims track, therefore, will need to involve referrals to external mediators. The consultation did not resolve the question of how the civil mediation sector will need to be regulated to meet this demand, if at all. It also did not address the question of how mediation at this level is to be kept free of charge for parties – one of the preconditions identified by the CJC for compulsory mediation not to be in breach of Article 6.
However these questions are addressed, litigation and mediation appear set to become ever more integrated in the years to come. For litigators, mediators and litigants, the writing is on the wall.
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