Civil Procedure Rules: Changes to mediation in smalls claims track could mean sanctions if you don’t comply
Following the MOJ’s confirmation that mediation will be made compulsory for all Part 7 civil claims in the small claims track (up to £10,000), the Government has published that it intends to integrate mediation as a mandatory procedural step.
The procedure will be introduced into the Civil Procedure Rules, initially for all claims for a specific amount of money (including housing and personal injury claims) with a view to applying this across all standard small claims proceedings.
Compulsory mediation will not be applied to claims issued under the non-standard procedures such as possession claims.
What is mediation?
Mediation is a process in which parties attempt to settle disputes using an independent mediator to facilitate discussions between the parties. Mediation is suitable to resolve most civil disputes and is usually much quicker and cheaper than preparing for a court hearing.
What is the current position?
At present, parties to small claims proceedings can opt to engage in a free hour-long mediation provided by the Small Claims Mediation Service once all parties have set out their claim/defence. The mediators are trained neutral mediators from HMCTS.
What will the mandatory process entail?
It is proposed that mediation appointments will be offered to parties on completion of the Directions Questionnaire, after they have set out their claim and defence.
If a party does not take up the opportunity to mediate, they will face sanctions believed to be in keeping with similar sanctions for failure to comply with court rules such as an order to pay the other party’s legal costs or strike out of a party’s claim or defence.
It is hoped that this will encourage the parties to engage in the mediation process although it will be impossible to force parties to reach a settlement.
The Government believes that the rewards from the compulsory mediation change will take away the costly burden of litigation and optimise judicial time.
Future plans for compulsory mediation
The Government says, in response to the MOJ’s consultation paper that they “remain committed to integrating mediation in the court journey for higher value civil claims” which will include claims in fast-track (£10,000 - £25,000) and the multi-track (over £25,000). In these higher value cases, parties will be referred to external mediators rather than those employed by HMCTS. The Government is keen to maintain the “standards for mediators in court-referred cases therefore need to be robust and clear to promote trust’.
It remains to be seen how effective compulsory mediation will be. Afterall, it is a key requirement for a mediation to work that both parties must be a willing participant and prepared to reach a compromise.
If a party is forced into mediation, there is a risk that they will only engage in order to fulfil a “box ticking exercise” and avoid sanctions without any intention of compromising the claim. This in turn may lead to the further use of already overstretched court resource with a low success rate.
