The Ministry of Justice is to introduce compulsory mediation for small claims valued up to £10,000, starting with specified money claims.
These cover 80% of small claims, with personal injury and unspecified money claims added to the scheme at a later date.
It marks a radical expansion on the Civil Justice Council’s recommendation in 2022 for compulsory mediation for claims worth up to £500; last year’s MoJ consultation also outlined an ambition to extend it to all county court claims.
Outlining its decision almost a year to the day since the consultation was issued, the MoJ estimated that around 92,000 cases annually would be referred automatically to an hour-long telephone session with a mediator provided by HM Courts and Tribunals Service (HMCTS) before their case could progress to a hearing.
There will be no additional cost for this beyond the court fee and it could free up to 5,000 sitting days a year, the MoJ said.
HMCTS said it would be recruiting and training more mediators for the Small Claims Mediation Service and updating necessary technology.
Research earlier this year by the Centre for Effective Dispute Resolution (CEDR) found there was capacity and willingness in the market to meet the demand.
Justice minister Lord Bellamy said: “A vast number of cases that go through the civil courts each year could be settled far more swiftly and with less stress through mediation. By integrating mediation for small civil claims, we will create valuable court capacity, freeing up time for judges and reducing pressures on the courts.”
James South, chief executive of CEDR, added: “The success and satisfaction rates of the current small claims mediation service has shown how mediation can bring those benefits to parties involved in small claims.
“It is for this reason, CEDR has always been very supportive of automatic referral of civil disputes valued up to £10,000 to mediation, as this will provide more disputants with access to the benefits that we know mediation can bring them.”
The MoJ also claimed support from the Federation of Small Businesses, with national chair Martin McTague saying the move would “help speed up access to justice and avoid expensive litigation for small civil claims”.
He went on: “We would also like to see the small claims limit raised, so more parties can benefit from cheaper dispute resolution.”
Law Society president Lubna Shuja said: “It is encouraging to see the government is pressing forward with ways to decrease the court backlog and ensure disputes are solved quickly and at minimal cost…
“However, there may be certain types of small claims where mediation is not suitable. We are concerned that by not allowing exemptions to this new process, the government may be increasing unnecessary bureaucracy and cost, ultimately hindering the ability of some parties to access justice. This must be closely monitored.”
The new process also needed to address potential imbalances of power between the parties, Ms Shuja added.