Mediation will become compulsory for civil claims valued up to £10,000, the Ministry of Justice has confirmed today – with parties facing costs sanctions or a strike-out if they fail to engage in the dispute resolution process.
Justice minister Lord Bellamy said: ‘A vast number of cases that go through the civil courts each year could be settled far more swiftly and with less stress through mediation. By integrating mediation for small civil claims, we will create valuable court capacity, freeing up time for judges and reducing pressures on the courts.’
The ministry will begin with specified money claims - which make up 80% of small claims - such as drivers being sued over parking fines or businesses recovering debts from customers. The policy will eventually apply to all claims issued under the standard part 7 procedure of the Civil Procedure Rules.
Once the defence is filed and the case is allocated to the court’s small claims track, parties will be informed that mediation is the next step. They will fill in a ‘directions questionnaire’. The case then progresses to HM Courts & Tribunals’ existing small claims mediation service.
Parties will have a separate hour-long telephone conversation with the mediator. The mediation will be free. If a settlement is agreed, a legally binding formal agreement will be registered with the court. If agreement is not reached, the dispute will be heard by a judge. Judges will be able to impose sanctions on parties that did not comply with the requirement to mediate.
The small claims mediation service is being expanded to provide free in-house mediation small claims, the government said. Future plans to integrate mediation in the court process for higher-value claims will see parties referred to external mediators. Having assessed the strength of existing self-regulation, statutory regulation of the entire civil mediation sector ‘would be disproportionate’.
The government signalled in March that mediation would become compulsory for claims up to £10,000, increasing by sevenfold HMCTS’s small claims mediation service workload. The department predicts that its latest reform will 'positively impact' 92,000 cases and free up to 5,000 sitting days annually.
The Law Society said adequate resourcing of the scheme would be vital. President Lubna Shuja said: 'It is encouraging to see the government is pressing forward with ways to decrease the court backlog and ensure disputes are solved quickly and at minimal cost.'
However she noted that mediation may be suited to certain types of small claims. 'We are concerned that by not allowing exemptions to this new process, the government may be increasing unnecessary bureaucracy and cost, ultimately hindering the ability of some parties to access justice. This must be closely monitored.
'Adequate resourcing and funding of the HM Courts and Tribunals Service Small Claims Mediation Service will be vital,' she said. 'We look forward to learning more about how the new process will address potential imbalances of power between the parties to ensure fair and just outcomes.'
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