The scheme will start with claims for a specified money amount (which make up 80% of small claims), which will include clams by 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.
It is proposed that once a defence is filed and the case allocated to the court’s small claims track, the Court will notify the parties that mediation is the next step, and the case will then progress to HM Courts & Tribunals’ existing small claims mediation service. The parties will have a separate hour long telephone conversation with the Court service’s appointed mediator (the mediation will be free of charge to the parties), and if a settlement is agreed, a legally binding formal agreement will be registered with the court. If an agreement is not reached, the dispute will proceed, and in due course will be heard by a judge. Judges will have the power – and it is not hard to envisage them being encouraged – to impose sanctions on parties that did not comply with the requirement to mediate.

To support the scheme, the government has indicated that he small claims mediation service will be expanded. Future plans to integrate mediation in the court process for higher-value claims will see parties referred to external mediators.

Mediation has of course been a growing area in recent years, and in our experience, and certainly in Multi-Track cases, some form of ADR or mediation is now commonplace. Provided the parties properly engage in the process, and genuinely wish to reach a realistic settlement, it is an effective process which can assist all those involved in litigation in saving costs. For the proposed compulsory small claims mediation process to be effective, it will be vital that the parties have access to a properly trained mediator within a reasonable timescale. Whether or not that proves to be the case, only time will tell.

For further information, please contact a member of our dispute resolution team.