Compulsory Mediation Introduced for Small Claims Track Cases in UK
In a bid to reduce the number of small claims reaching court trials, the Ministry of Justice in the UK has announced that mediation will be made compulsory for all small claims track cases. This move, confirmed on 25 July 2023, will apply to claims worth up to £10,000.
The reason behind this decision is the significant amount of time it takes for small claims to go to trial. On average, these claims are taking over a year to reach a trial, causing a strain on court resources. Recent statistics demonstrate that specified money small claims, which are claims under £3,000, represent around 80% of all newly issued claims in the County Court.
Initially, the government’s proposal will apply to specified money claims, such as businesses seeking to recover debts from customers. Eventually, it is expected that compulsory mediation will be extended to all claims filed under Part 7 of the Civil Procedure Rules. However, no specific timeline has been announced for when mediation will become compulsory for these claims.
Under the new process, compulsory mediation will commence once the defendant files their defense and the claim is allocated to the small claims track. While the parties will still complete a Directions Questionnaire, instead of the court setting directions, the claim will proceed to the small claims mediation service.
Each party will have an opportunity for a one-hour telephone conversation with the appointed mediator. If an agreement is reached, a binding agreement will be drafted and submitted to the court. If a settlement cannot be reached, the claim will follow the normal route and be referred to a judge who will set directions for trial. In such cases, the judge will have the authority to impose sanctions on parties that refuse to engage in mediation.
One significant aspect of this new initiative is that the mediation process will be free of charge. The hope is that compulsory mediations will lead to more settlements, freeing up valuable court time for more complex cases.
It is important to note that not all cases will be suitable for mediation, particularly those where the parties are firmly entrenched in their positions and an independent judge is necessary to make a decision. Nevertheless, parties will be obligated to participate in compulsory mediation or face the risk of sanctions for non-compliance.
Only time will tell whether compulsory mediation is a beneficial measure or an unnecessary step that further delays the progress of a case towards trial. However, this new development aims to streamline the small claims track process and promote efficiency within the judicial system in the UK.
