Compulsory mediation - an opportunity for small claims triage?

Compulsory mediation - an opportunity for small claims triage?

The government’s consultation on compulsory mediation closed yesterday. The proposals are based around having mandatory mediation for all defended small claims in the county court (ie, most claims for under £10,000) and signpost towards making mediation mandatory for larger civil claims too.

What is the UK’s mediation framework?

In the UK we are spoilt to have a well-established mediation culture, certainly for larger and complex litigation cases. Mediation is known to be effective in settling the majority of cases and mediators’ reputations are often based around their success rates.

Practitioners recognise the benefits of mediation, which include saving both time and money for the parties and their advisers, as well as the time of courts and judges. Another advantage is its flexibility – you can agree something at mediation which a judge does not have the jurisdiction to order. Parties report that mediation is less stressful than litigation too.

The small claims track is designed predominantly for litigants in person. That is reflected by the fact that, generally speaking, each party bears their own costs and so can litigate without the fear of having to pay the opponent’s legal costs if they lose. This access to justice inevitably also leaves the system exposed to bad claims, without legal merit, being pursued all the way to a hearing before a judge.

A solution is needed to triage the claims effectively at an early stage to ensure the right claims are being dealt with by the right people to further the aim of ready access to justice.

The case for compulsory mediation

Could compulsory mediation help with that? Or could mediation at least reduce the number of claims reaching final hearing?

Mediation is certainly an answer to both those questions. In cases where the parties are able to comprehend the possibility of losing at a final hearing and the costs consequences of that (ie, a potential costs order against them), there is a real incentive to settle at mediation. But those incentives are not so present in the small claims track and litigants in person often do not have the legal training to be able to assess the merits of their claim or defence.

In my limited experience of a handful of claims in HM Courts & Tribunals Service’s (HMCTS) small claims mediation service, the mediation has been unsuccessful because the parties are entrenched in their (often unmeritorious) positions and the mediator does not have the tools to bring the case to a conclusion.

I was surprised to read that in the Online Civil Money Claims Service, which has set up a free mediation service, 55% of the mediations in the year to 31 January 2021 resulted in settlement, which is more encouraging than my anecdotal experience.

If just over half of cases can be settled at mediation, mediation makes sense. Will making it compulsory have the effect of reducing its efficacy, however, as parties see it as merely a box-ticking exercise rather than a genuine opportunity to resolve their differences?

According to the research behind the proposals, it looks like people are not using mediation because they don’t know it’s available – making it compulsory would get around that.

Could compulsory mediation take the mediator’s role a step further?

If the mediators are well trained and have the ability to carry out a reality check for the parties so as to achieve settlements, could they also act as triage for those cases that do not settle?

There are already so-called dispute resolution hearings taking place in some county courts, which is effectively judge-led triaging, and greater use of HMCTS-employed legal advisors triaging the smallest of cases.

Can compulsory mediation kill two birds with one stone? Where cases merit progressing to a final hearing, they progress, but where they do not, they are referred by the mediator to a triage judge to make directions with unless orders to improve the claim or defence to allow it to continue.

As for whether compulsory mediation should be extended beyond the small claims track, it already effectively exists because of the costs sanctions of unreasonably refusing to mediate and the liberal interpretation of what amounts to an unreasonable refusal.

If making it properly mandatory would mean that a few more cases each year make it to mediation and a few of those actually result in settlement, then that surely must be a good thing for everyone involved, except perhaps the lawyers who stand to gain from cases proceeding all the way to trial.

This article was first published on Legal Futures and can be accessed here.

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