Mediation In The Justice System – What’s Changing?

Towards the end of 2022, the government was in consultation with experts and business owners over a set of proposals about mediation and its role within small claims court. It’s taken some time to sort through the data and come to a decision, but earlier this month, the Ministry of Justice confirmed that it will be making mediation compulsory in all small claims track matters, with a view to expanding this to all small claims cases.

What Is The New Mediation Ruling?

According to announcements made by the Ministry of Justice earlier in August, they will be implementing an integrated mediation system for all specified money claims allocated to the small claims track. This means any claim of up to £10,000 in value will have to go through the new mandatory mediation process. Recent statistics show that specified money small claims cases take up about 80% of all newly issued claims in the County Courts – highlighting just how much of a problem they are becoming. The plan is to eventually expand compulsory mediation to all small claims cases, though there is no set date for this yet.

The process for compulsory mediation will be triggered once the Defendant has filed their defence and the case has been assigned to the small claims track. Both parties will be required to fill in a Directions Questionnaire, and from that point the case will move to the small claims mediation service.

What Happens In Small Claims Mediation?

Mediation will be free of charge and will take place via an hour-long telephone call within 28 days.  Both the Claimant and the Defendant will have the opportunity to speak to the mediator separately to discuss what the issues are and how they might be resolved. The parties will not speak to each other directly. The mediator will go back and forth between the parties, relaying what the other’s position is with a view to agreeing a settlement. If through this they are able to reach an agreement, then a binding contract will be drawn up and filed at court.

However, if an agreement can’t be reached, then the case will continue as a defended claim.  Each party will have to file their evidence by way of witness statements and attend a final hearing to be decided by the judge.

If one of the parties refuses to mediate or does not take part in the mediation appointment, cost sanctions can be imposed upon them or even strike out.

What Does This Mean For Businesses?

There are a couple of things this new change in process could mean for business owners. The first is that it gives you the chance to discuss and resolve the issue without the need to go to trial, using an impartial, third-party mediator. This often means discussions will be calmer and more fruitful, and settlements are more likely to happen as a result. Doing this could save you a lot of time and money in going through the full court system. It also means the process will be much quicker, which is a big bonus all around!

The other big benefit for many businesses is that the mediation mandated by the court will be free. There are concerns however, that with mediation being compulsory, some parties may just attend the mediation to ensure that the case continues but be unwilling to negotiate or compromise.

Of course, not every case will be suitable for mediation. Some will be incredibly complex and require a lot of knowledge and support to untangle, while others will feature Defendants and Claimants so entrenched in their positions that only a hearing before a judge will be required to decide who should be successful in the claim. However, even these cases still need to attend mediation and prove the effort has been made, or face sanctions from the court.

At Debtcol, we often support our clients in taking claims through the small claims court. We provide support with gathering evidence and documentation needed to support your case, as well as advice and support while you are going through each step – including mediation. We’ve seen mediation be incredibly successful for many businesses, so we have a lot of confidence in the addition of mandatory mediation as a step in the small claims process. If you have any thoughts, or would like some advice on how to move forward with your own claim, just get in touch with the team today to book your free consultation.