As the demand on courts continues to rise for the third consecutive year, there is a growing need for reforms to alleviate the strain on our justice system. To address this, the Ministry of Justice has recently confirmed the introduction of mandatory mediation.
This measure is aimed at resolving small claims cases, those involving amounts up to £10,000.00, before they proceed to a formal hearing. Around 80% of small claims pertain to monetary disputes, such as businesses seeking debt recovery or homeowners pursuing claims against contractors.
Changes to the mediation process – mandatory mediation
Presently, parties involved in a dispute have the choice to opt for mediation voluntarily. However, this will soon transition to a mandatory requirement, with the court having authority to apply sanctions to parties who fail to engage in the mediation process. In certain cases, the court may even dismiss a case entirely due to non-compliance with mandatory mediation.
Projections indicate that over 180,000 parties will be directed to the mediation service annually, leading to a potential reduction of 5,000 sitting days for the courts each year. Accommodating this anticipated surge in demand will necessitate significant expansion and investment in the small claims mediation service.
Here’s how the process will operate
Initiation: After a defence is submitted and the case is assigned to the small claims track, the parties will be informed that the subsequent step involves mandatory mediation.
Directions Questionnaire: Both parties will receive a directions questionnaire and will be directed to the small claims mediation service.
Mediation Process: Each party will engage in a separate one-hour telephone conversation with a professional mediator, provided by the mediation service. This mediator will facilitate communication between the disputing parties.
Cost: The mediation service will be offered free of charge to the involved parties.
Outcome Scenarios:
- If an agreement is reached during mediation, a legally binding formal agreement will be registered with the court.
- If no resolution is achieved through mediation, the dispute will proceed to be heard by a judge.
The effectiveness of this mandatory mediation approach is yet to be fully ascertained. Up until September 2022, only 17,000 out of 247,000 civil cases had been resolved through mediation. In a commentary featured in the Law Society Gazette, Lady Justice Asplin acknowledges the need for further progress in the adoption of mediation:
“There is a long way to go if mediation is to become mainstream… we have to consolidate the changes which have already taken place and encourage judges to think creatively. In many countries including Canada, Australia, and Singapore, a seamless approach is the norm and in some cases not just for smaller claims.”
In light of these considerations, it is evident that change is imminent. The implementation of mandatory mediation for small claims cases represents a significant reform in the realm of legal dispute resolution. Observers are encouraged to follow developments in this area closely. Please contact our Dispute Resolution team to discuss this further.