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/ 27 Jul 2023

Compulsory Mediation in 2023: Civil Claims up to £10,000

On 28 July 2022 our Dispute Resolution team reported on the new compulsory mediation scheme announced by the government. As of 25 July 2023, the scheme to automatically refer parties involved in a legal dispute with claims valued up to £10,000 to a free hour-long session with a mediator has been confirmed by the government.



Property Litigation & Dispute Resolution

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Compulsory mediation and what it means for you – an update

As reported in our previous article on compuslore mediation, parties involved in a legal dispute with claims valued up to £10,000 will be referred to a free hour-long mediation service provided by HM Courts & Tribunal Service. The announcement means that mediation for all small claim disputes will now be an essential part of the Court process.

How it will work

The compulsory mediation service will be free of charge. The scheme will first be integrated into all money claim disputes and will later apply to all ‘standard claims’ that have a value of up to £10,000.

There will only be very limited automatic exceptions to the scheme, one such example being claims concerning re-possession of property.

An individual or business will start their claim against another individual or business by issuing court proceedings in the county court.

If the claim is disputed by the party it has been made against, that party will file their Defence with the Court.

After the Defence is filed, the case will be allocated to the Court’s ‘small claims track’ and the parties will be informed that mediation is the next step they must participate and comply with. The mediation will be an hour-long session conducted over the telephone.

While the parties agree a settlement, this will be written up as a legally binding agreement. Where the parties fail to reach an agreement, the case will continue along the Court process leading up to a hearing before a Judge.

The Court will impose sanctions on any party who does not participate in the mediation process.

The future for ‘Small Claims’ and impact on higher value claims

Prior to this announcement, mediation was an optional but often encouraged cheaper alternative to Court proceedings as a means to resolve disputes between parties.  The new scheme has the intention of compulsorily bringing the benefits of mediation to a much wider number of business and individuals as possible. The Ministry of Justice estimates ’92,000’ cases will be impacted by the scheme.

If agreement is successfully reached during mediation, the parties are alleviated from the buildup to a final Court hearing.

Of concern to some is that no exemptions will be considered on an individual basis to any claims, regardless of the complexity involved in a dispute. The aim of this seeks to prevent parties intentionally avoiding engagement with the mediation process.  As reported in our previous article, the concerns  of some legal commentators is that small claims bearing unique complexities will not prove suitable for the process. For businesses or individuals not compliant with the requirement to mediate, the sanctions and removal of the ability to proceed to a Court hearing may result in a harsh removal of the access to justice for some.

Also confirmed in the Government’s announcement is the intention to expand compulsory mediation scheme into higher value claims. The future intention for disputes falling into the ‘fast and multi track’ – that is claims with a value between £10,000 – £25,000 and over – is for the parties to be referred to external mediators during the Court proceedings, who are not employed by HM Courts & Tribunal Service.

The positive and potential negative impacts resulting from the scheme remain to be seen and will no doubt be closely monitored by all legal practitioners. Our Dispute Resolution team and accredited mediator are on hand to advise you further on the scheme, whether your dispute falls into one of the limited automatic exemptions and for anything else.

What are the benefits of mediation?

Mediation is cheaper and quicker in comparison to court proceedings as the process is much simpler.

Ownership of the process is central; you make the decision rather than the court doing so on your behalf. It is therefore a less acrimonious process as the outcome is based to suit both parties.

Mediation can be held face to face; virtually, or by telephone making it a more flexible alternative to court proceedings.

Hanne & Co’s Mediation Information Services

In keeping with our objective to preserve our client’s costs, we also offer a Mediation Information Service where our mediator can assess your dispute at a nominal fee and invite the other party to mediate with you where appropriate.

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