Compulsory mediation in small claim cases
In July 2023, the government announced that for all small claims track matters (where the value of the claim is up to £10,000) mediation would now be compulsory.
This move is aimed at cutting back on the number of claims that reach the stage of a trial in court. Figures show that the average time for a small claim to proceed from issue to court trial is over a year.
The new system will begin with specified money small claims, which represent eight out of ten small claims. It’s anticipated that it will eventually apply to personal injury and unspecified money claims as well. It’s not known at the moment when and if mediation in these claims will be made compulsory.
How will the new process work?
The process will begin after the defendant (the person against whom the claim is being made) files their defence against the claim. At that point, the claim is allocated to the small claims track.
As is currently the case, the parties to the claim will complete a Directions Questionnaire. This form, known as N180, is sent to claimants and defendants in small claims cases so that the judge can give instructions, or 'directions', to both parties.
Under the new system, the directions won’t be set by the court; rather, the claim will proceed to the small claims mediation process.
The first stage of this will be the opportunity for both parties to have a separate one-hour telephone conversation with the mediator.
The Ministry of Justice estimated that this would cover about 92,000 cases annually and free up anywhere up to 5,000 court sitting days.
As this would represent a significant increase in the demand for mediators, it was announced by HMCTS (His Majesty’s Courts and Tribunal Service) that more mediators would be recruited and trained, and technology would be updated where necessary to make the new system work.
If mediation is successful, a binding agreement will be drawn up and the court will receive a copy. If mediation fails to produce a settlement, then the judge’s directions and trial will proceed in the usual way.
Can we refuse mediation?
If any party doesn’t agree to go through the mediation process, the judge can impose sanctions on them.
Will the mediation cost anything?
No, it will be free of charge.
What if mediation isn’t suitable for our case?
While it’s acknowledged that not every case will lend itself to mediation, and not every mediation will realistically produce an agreement, the parties to a claim will still have to go through the process or risk being sanctioned by the judge for their refusal.