Mandatory mediation transforms small claims track procedures

The Small Claims Track is a procedural system that deals with low value monetary claims (below £10,000).  Disputed claims on the Small Claims Track are progressed more quickly and on a less formal basis, compared with high value and/or complex cases. In the vast majority of small claims disputes, only limited costs are recoverable from an opponent, regardless of the outcome. This is intended to both discourage parties from incurring substantial costs in professional fees, and also to encourage settlement. Mediation has been optional in Small Claims disputes since 2007. However, compulsory mediation was introduced for all new Small Claims Track monetary claims issued on or after 22 May 2024.

Mediation appointments are conducted over the telephone by a trained mediator and last up to one hour.  The Court’s Mediation Service is free of charge. Mediation sessions are generally organised within 28 days, which is much quicker than the wait for a court hearing date. It is also a cheaper alternative to court as there is no hearing fee to pay. On average, Small Claims are taking in excess of one year from issue of the claim to reach a final trial. This is due to much of the courts time being used for cases that could be settled without the requirement of a hearing.

Alternative dispute resolution made compulsory (ADR)

With the introduction of free mediation sessions for disputing parties from 22 May 2024, Alternative Dispute Resolution (ADR) became a required step in the Small Claims Track. Amendments to the Civil Procedure Rules came into force on 1 October 2024, confirming the

English civil courts’ power to order parties to engage in ADR.

ADR refers to ways of resolving disputes parties that don’t involve going to court.

Common forms of ADR are:

• Mediation –  where an independent third party helps the disputing parties to come to a mutually acceptable outcome.
• Arbitration – where an independent third party considers the facts and takes a decision that’s often binding on one or both parties. The current rules also have the effect of ensuring that the courts and the parties are continuingly revisiting the ADR through the life of the litigation. Furthermore, the courts will continue to exercise their powers in costs to penalise any party that has unreasonably refused to engage with ADR.

Key takeaways

These amendments to the Civil Procedure Rules show the Ministry of Justice’s continued commitment towards ADR. Forms of ADR, such as mediation, often have high success/settlement rates and tend to be much cheaper and more swifter than the parties going to a final trial.

By introducing mandatory mediation and ADR, the hope is that more disputes will be settled before reaching a trial, which in turn provides more capacity within the courts for the higher value and/or complex cases. However, ADR requires engagement and a willingness from both parties to want to settle the claim, which isn’t always viable.  How the court will exercise this new power remains to be seen.

Debt recovery dispute advice

Our award winning Debt Recovery team has over 45 years’ collective debt recovery experience. If you need debt recovery dispute advice, our team of experienced debt recovery lawyers based in Maidstone and Canterbury are able to advise. To get in touch, please fill out our contact form or alternatively you can call us on 01622 690691.

This content is correct at time of publication