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/ 28 Jul 2022

The new compulsory mediation scheme and what it means for you

The government has recently announced its new plans to automatically refer parties involved in a legal dispute with claims of up to £10,000 to a free hour-long telephone session with a mediator provided by HM Courts & Tribunals Service.

Associate Kate Kenneally outlines the proposed plans below including possible implications and what this means for you.

Kate Kenneally

Associate

Property Litigation & Dispute Resolution

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Rajinder Rai

Senior Associate & Accredited Mediator

Private Client

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What do they mean by compulsory mediation?

Compulsory mediation was announced this week by the government with new plans to automatically refer parties involved in a legal dispute with claims of up to £10,000 to a free hour-long telephone session with a mediator provided by HM Courts & Tribunals Service. This will occur before their case is allowed to progress to a hearing and Court in the normal way. If the parties reach an agreement during the mediation, it will be made legally binding through a settlement agreement and any proceedings will cease.

The scheme is the first step by the government to seek to free up the significant backlogs the courts have experienced post pandemic and may have the effect of reducing waiting times. The government estimates that its proposals will divert up to an extra 20,000 cases away from court and free up 7,000 judicial sitting days for more complex cases.

There are however rumblings that the government may not stop at small claim matters (claims worth £10,000 or less) with a published statement setting out ‘While our current proposals address small claims, with free mediation provided by the small claims mediation service, our future ambition is to extend the requirement to mediate to all county court users,’ the consultation document states.

What are the possible implications of the new proposal?

For those on the ground, there are serious concerns that the proposed scheme is an oversimplification of what can be exceptionally complex low value claims. There is a risk that the scheme will bar lower income litigants from bringing an action as there is now a compulsory additional layer of cost which if not followed, will negate their ability to have their voice heard in a court of law.

At present there are already enshrined duties on the parties and their representatives to consider mediation throughout the course of the case, which as any seasoned litigant knows provides the parties a plethora of opportunity to settle. Parties and their advisers are already providing the necessary mechanism to avoid cases reaching court, without the need for the imposition of compulsory mediation.

As with all new guidance only time will tell whether the governments new guidance will impact litigants and their instructed solicitors positively. As ever, Hanne are here to guide you through every change in the law, effectively, affordably and with excellence in practice.

What does this mean for you?

If you are unsure on the way forward, then contact our independently accredited mediator. Our team have a wealth of experience in both fully contested disputes leading to trial, and matters resolved at mediation.

Our mediator handles a variety of mediations ranging from civil and commercial disputes between individuals and businesses, together with those in the workplace between employer and employee.

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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