Ministry of Justice to introduce mandated referral to mediation for civil claims up to £10,000, starting with specified money claims

The Government is to introduce a requirement for automatic referral to mediation for all small claims in the County Court – generally those valued under £10,000 – issued under the standard Part 7 procedure of the Civil Procedure Rules.

The Ministry of Justice (MOJ) said the move would include housing conditions and personal injury claims allocated to the small claims track.

However, the policy will not apply to claims issued under non-standard procedures, such as possessions claims, which are issued under Part 55 procedure.

In its formal response to a consultation carried out in 2022, the MoJ said the Government was persuaded by the view of many respondents to the consultation that all standard Part 7 cases were suitable for mediation. “We will therefore not provide for any case type exceptions within Part 7 claims from the requirement to mediate.”

The Civil Procedure Rules will be amended to enable implementation of the policy.

“We will start with integrating mediation for all specified claims (disputes about a specific amount of money) within this Parliament, working towards integrating mediation across all standard small claims’ proceedings,” the MoJ’s response said.

It added that it would also not be providing for exemptions on an individual basis. “As respondents pointed out, allowing for individual exemptions would complicate the court process unnecessarily, requiring additional time and costs to assess whether a party’s application for exemption is valid. Moreover, the Government believes there would be a significant risk that enabling individual exemptions would create a culture of avoidance; this would undermine our overarching objective to standardise participation in mediation.”

The Government response said parties would be expected to engage in mediation in good faith.

“Many respondents to the consultation advocated an approach that allowed mediators to assess whether parties had engaged adequately in the mediation process. This was seen as a way to mitigate the possibility that parties fail to genuinely engage with mediation as a tool to facilitate resolution,” the MoJ said.

“However, others felt that this approach would breach the confidentiality of the mediation, and potentially damage parties’ confidence in the process.”

The MoJ said that on balance, the Government was of the view that, at this time, the only requirement would be to attend the scheduled mediation appointment, although it may review this decision following evaluation of the policy.

The Ministry said that if a party does not attend their scheduled mediation appointment, a judge would be able to apply a suitable sanction at their discretion.

“This may be a strike-out, which means the judge can automatically rule in the other party’s favour. Or it may be a cost sanction, which means the judge can order the non-compliant party to pay for part or all of the other party’s legal or court costs (even if the judgment overall is in favour of the non-compliant party).”

The response said that, as various respondents had pointed out, without meaningful sanctions, integrated mediation was unlikely to be effective.

“As mediation will be part of the standard court process, sanctions should be in line with other failures to comply with court rules,” it added.

“Judges will be able to take mitigating circumstances into account when deciding whether to apply sanctions for non-attendance.”

Announcing the reforms earlier this week, the MoJ said the changes would see more than 180,000 parties referred automatically to a free hour-long telephone session with a professional mediator provided by HM Courts and Tribunals Service (HMCTS) before their case can be progressed to a hearing.

It added that it has been estimated that greater use of mediation could positively impact up to 92,000 cases per year, and free up to 5,000 sitting days a year, “providing a substantial boost to court capacity and helping the government to reduce waiting time for the most complex cases”.

The Ministry said changes represented the first step “in the government’s journey towards simplifying processes for civil cases, a commitment that will see a reduction in lengthy, stressful, and often unnecessary, county court cases”.

Justice Minister Lord Bellamy KC 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.”

To support these changes coming into effect, HMCTS will be expanding the Small Claims Mediation Service (SCMS) by recruiting and training additional mediators and updating necessary technology.

The SCMS has been providing voluntary mediation since 2007, “settling over half of claims referred to it each year within weeks of starting the case”, the MoJ said.

James South, Chief Executive of CEDR, said: “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 said the reforms were part of wider government action to make broader changes in the culture around dispute resolution in England and Wales.

In March of this year, it announced plans to mandate mediation for separating families “to protect children from witnessing disputes in the family courts, with an ambition to help 2,000 separating families”. The scheme has now distributed almost 20,000 mediation vouchers – ten times the original goal.