Under government plans announced on 26 July, individuals and businesses who are involved in legal disputes for claims under £10,000 will be referred automatically to compulsory mediation.
The blueprint published by ministers describes how free hour-long telephone sessions with mediators provided by HM Courts & Tribunals Service will be provided before eligible cases can progress to a hearing.
If the parties can reach a compromise, it will be made legally binding through a settlement agreement.
An estimated 20,000 cases are expected to be settled by compulsory mediation, freeing up court capacity to deal with more complex cases and sparing people the time and cost of litigation….in theory!
In actual fact mediation is what is supposed to happen now. Once a defence is filed, the parties indicate voluntarily whether they want to go to small claims mediation, ticking either yes or no.
I was told a few years ago by a District Judge that if the claimant ticked yes and the defendant ticked no – the case would go to mediation. If the claimant ticked no and the defendant ticked yes – the case would go to mediation. And if the claimant ticked no and the defendant ticked no – the case would go to mediation!!!
The difficulties at present are that cases for mediation are not being referred quickly enough and the mediation service does not liaise with the parties to agree a date for the mediation.
I have had examples of a date coming through for mediation but on that day I am in another court on a different hearing. When you explain this and request an alternative date, the answer received is, ‘Due to the current high demand for mediation we are unable to re-schedule the appointment’. This lack of flexibility is in danger of rendering the mediation service pointless.
The government has also revealed that it wants to go further, stating in the consultation document: ‘While our current proposals address small claims, with free mediation provided by the small claims mediation service, our future ambition is to extend the requirement to mediate to all county court users,’.
Currently, 55% of cases mediated via the government’s small claims mediation service result in a settlement. However, only 15%-21% of parties use it. To increase usage, the system requires considerable improvement in my opinion.
The consultation states that non-compliant parties could be hit with wasted costs orders or have their claim or defence struck out, which is most welcomed. However, this will only work if the mediation service is properly funded and well-resourced by skilled mediators.
The government is seeking views on its proposals for compulsory mediation from court users, mediators, the legal profession, the judiciary, the advice sector, and anyone with an interest in the resolution of civil disputes.
The consultation will last 10 weeks and a response will be published in due course. The £10,000 limit would not include personal injury or housing disrepair claims which have a lower threshold.
Watch this space for further updates or to speak to a member of our dispute resolution team, email firstname.lastname@example.org or phone our Stoke-on-Trent solicitors on 01782 205000, our Altrincham solicitors on 0161 929 8446 or our Birmingham solicitors on 0121 516 3025.