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In a significant development poised to reshape the civil justice landscape, compulsory mediation is set to be introduced in the small claims process for cases filed from 22 May 2024 valued under £10,000. Starting with specified money claims, the government’s intention is to roll out compulsory mediation to all small claims issued under Part 7 of the Civil Procedure Rules, and damages cases, with no exemptions.
On the wider topic of promoting alternative dispute resolution (ADR) and the role of the courts, in April 2024, the Civil Procedure Rules Committee (CPRC) also launched a consultation following Court of Appeal’s decision in Churchill v Merthyr Tydfil [2023].
Background
For some time both the government and senior judiciary have expressed their support for integrating ADR processes, such as mediation, into the civil justice system.
The small claims mediation service has been available as an option since 2007. However, last year the Ministry of Justice (MoJ) confirmed that mediation will become compulsory for cases allocated to the small claims track valued at up to £10,000, issued under Part 7 of the Civil Procedure Rules. The announcement followed a MoJ consultation on the topic which closed on 4 October 2022.
Later in the year, in a pivotal judgment in the role of the courts in directing the use of ADR, on 29 November 2023 the Court of Appeal handed down its judgment in Churchill v Merthyr Tydfil County Borough Council. The Court found that judges can lawfully stay proceedings for the parties to engage in non-court-based dispute resolution, provided the power is exercised in a way that does not impair the very essence of the claimant’s Article 6 of the Human Rights Act 1998 (right to a fair trial).
Compulsory mediation: a paradigm shift in England's small claims process
From 22 May 2024, free mandatory mediation will apply in most money disputes valued at up to £10,000 made on paper and through HMCTS online systems. The mediation requirement for cases submitted through Online Civil Money Claims (OCMC) will be introduced later this year. Until then, parties can opt out.
The government’s future plans are to integrate mediation within the resolution of higher value claims in the County Court.
While heralded as a game-changer by some, compulsory mediation has ignited a debate among legal professionals and litigants. At the heart of the debate lies the balance between autonomy and compulsion, with opponents cautioning against the imposition of mediation on unwilling participants.
At its core, compulsory mediation represents a departure from more traditional adversarial approaches to dispute resolution. Parties will be compelled to engage in mediation sessions facilitated by trained mediators. The objective is to foster constructive communication between the parties and reach mutually acceptable resolutions where possible, without the need for protracted litigation.
Proponents of compulsory mediation reason that it offers a host of benefits, including the potential to unclog the arteries of justice, alleviating the burden on overstretched court systems grappling with backlogs. By diverting cases away from court, the measure promises to expedite the resolution of disputes, freeing up judicial resources for more complex matters.
Consultation into ADR
In April 2024, the CPRC launched a consultation on using and promoting ADR methods. In summary the CPRC is seeking stakeholder views on:
- “Changes to 1.1 would add that dealing with a case justly and at proportionate cost includes, so far as practicable, using and promoting ADR methods. Reference to ADR within the overriding objective would underline that considering the use of ADR should be a key part of the court process.
- Changes to 1.4 and 3.1 would clarify the position established in Churchill v Merthyr Tydfil that judges may order as well as encourage parties to participate in ADR procedure.
- Changes to Parts 28 and 29 would add that courts must consider whether to order or encourage parties to participate in ADR for fast-track, intermediate track and multi-track claims.
- Changes to Part 44 would add that failure to comply with an order for ADR or unreasonable failure to participate in ADR proposed by another party would come under the consideration of the conduct of parties when deciding to make any order about costs.”
The consultation remains open for comments until 28 May 2024.
Comment
We strongly agree and support the CPRC’s sensible draft amendments to the CPR regarding ADR. It serves all parties to consider ADR and the unreasonable failure to do so should, in our view, attract costs implications.
Despite the debate surrounding compulsory mediation, its introduction into the small claims process heralds a new chapter in the evolution of dispute resolution. This development marks a shift in how parties approach dispute resolution, with the hope that more claims will settle at an earlier point in time. However, we question whether 39 additional mediators will be sufficient to provide an efficient small claims mediation service.
Kennedys will be running courses for our lawyers to train as mediators as part of our commitment to this direction of travel.
United Kingdom