- Process is currently voluntary
- Mediation can facilitate early resolution of straightforward claims
- Proposal aims at freeing up Court’s time and resources for more complex cases
One of the most provided dispute resolution tools for claims under £10,000, allocated in the small claims track, is the option of a free mediation service. The current process remains that parties are able to choose whether they would like to opt in for free mediation during the process of the claim.
Drawn from the internal HMCTS system, it is estimated that in approximately 21% of small claims cases, an agreement to mediate can be found between both parties. The small claims mediation service is a confidential and free service that facilitates early resolution of claims which are relatively less complex and straightforward. HMCTS data however suggests that only in about 21% of small claims cases do both parties currently agree to mediation.
As a result of this relatively low take up, the MOJ and HMCTS are now proposing automatic mandatory mediation services for all cases under £10,000. This move should aid in the freeing up of Court’s time and resources for more complex cases. The proposal would require all defended small claims to be stayed for a period for 28 days and be referred to the small claims mediation service for the appointment. Participation in mediation will be compulsory and parties will no longer be able to elect whether they wish to opt in for the service.
Further consideration is being given on the basis for any exemption for particular cases and any assessment that may be required to provide exemption for individual requests. In addition, consideration is to be given to the parties’ engagement in the mediation process and whether a further stay of 28 days would be required. Should there be any non-compliance during an addition mediation then a judge would be able to choose a suitable consequence for the refusal. The consequence could range from an adverse costs order against the non-compliant party to the striking out of the statement of case.
Should mediation fail, then litigation would resume as usual, and the stay be lifted to allow the claim to proceed with the Courts.
The above is one of the key proposals which should ultimately allow parties to resolve matters early on during the litigation process and given the low value of these claims, early resolution would be economically beneficial for all parties involved in the claim.
Small claims mediation is a great opportunity for parties to resolve matters without the further need of the Court. Statistics provided by the small claims mediation service show that in 2020/2021 65% of the chases that were referred to the service settled, proving that mediation can be effective. In my view however, the small claims mediations that I have participated in have focused on the settlement parameters, rather than narrowing down any issues or attempting to resolve the issues. Whilst the introduction of mandatory mediation can be a great dispute resolution tool for the low value claims, it however needs to start focusing on addressing the issues in dispute before discussion of any settlement parameters. Early resolution will prove beneficial for both parties, however if either party does not provide a valid dispute, then it may be unfair to expect the other party to waive any portion of the sums owing, for the sole purpose of settling.
The consultation for the proposal will last 10 weeks and the response will be published by the government in due course.
To read the full proposals for increasing the use of mediation in the civil justice system click here.
Written by : Nilojana Nirmalan, Paralegal
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