MoJ proposes compulsory mediation for claims worth up to £10k

Telephone mediation: Mediator will speak to parties separately

Mediation will be made compulsory for all small claims worth up to £10,000, potentially settling 20,000 cases that would otherwise end up in court, the Ministry of Justice proposed today.

Personal injury and housing disrepair claims are not excluded from the plan (the MoJ’s initial announcement said, in error, that they were), which will see parties referred automatically to a free hour-long telephone session with a professional mediator provided by HM Courts and Tribunals Service before their case can progress to a hearing.

The MoJ said the parties would speak separately to the mediator. If a solution was brokered, both parties would agree over the phone for it to be made legally binding through a settlement agreement.

“It is expected that up to 20,000 extra cases every year could be settled away from court under these proposals – sparing people the time and cost of litigation,” the MoJ said.

“This would also free up vital court capacity with up to 7,000 judicial sitting days being available to help reduce waiting times for more complex cases which require a hearing. Overall around 272,000 people should be able to access the free mediation.”

MoJ figures show that, in 2021, 1.6m claims were issued, 276,000 defended, 159,000 allocated to a track and ultimately 54,000 went to trial.

Some 98,000 of allocated cases were small claims and 39,000 small claim trials last year, taking just under a year to go from issue to trial.

The MoJ proposal goes significantly further than that of the Civil Justice Council, which in February said alternative dispute resolution (ADR) should be compulsory for claims worth less than £500. For larger cases, the Small Claims Mediation Service should remain available on an opt-out basis, it recommended.

The consultation is the latest stage in government efforts to promote the use of ADR in a bid to reduce the amount of litigation.

Last year, the MoJ issued a call for evidence on dispute resolution. The responses suggested that solicitors’ “vested interests in pursuing lengthy litigation” were holding back take-up, and that more needed to be done to encourage the use of ADR.

Shortly before the call for evidence, a Civil Justice Council report found there was nothing unlawful about compulsory ADR, so long as litigation remained an option at some point.

Martin McTague, national chair of the Federation of Small Businesses, said: “We support a more accessible, fair and affordable dispute resolution system. These proposals are a step in the right direction to help speed up access to justice, and to avoid expensive litigation for small claims.”

The MoJ also cited the experience of three Canadian cities in Ontario, where automatic or mandatory mediation has been in place for over 20 years.

A recent survey of Ontario Bar Association members showed that 90% of respondents favoured expanding it further.

Jennifer Egsgard, an executive member of the association’s ADR section said: “A major early study on Ontario’s mandatory mediation programme showed that it significantly reduced the time taken to dispose of cases, decreased costs to litigants and led to a high proportion of cases being completely settled earlier in the process.

“It also found that both the people and lawyers involved in these cases experienced considerable satisfaction with the process.”

Last month, the Master of the Rolls, Sir Geoffrey Vos, said the question of whether mediation should be mandatory would become moot in the digital justice system currently being built.

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