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The Evolution of Dispute Resolution: Compulsory Mediation in UK Small Claims Cases

Updated: Apr 30

Compulsory Mediation for Small Claims in the UK

Introduction to Compulsory Mediation for Small Claims in the UK

Following a period of consultation, the Ministry of Justice confirmed on 25th July 2023 the use of mediation as a compulsory process in all small claims with a value of up to £10,000. This significant shift in the landscape of dispute resolution introduces a neutral mediator to assist disputing parties in reaching a mutually agreeable resolution. This approach is driven by the desire to streamline the resolution of minor disputes efficiently and cost-effectively, providing an alternative to the often lengthy and costly court proceedings. It is noted that, on average, small claims can take more than a year from the issuance of the claim to reach a trial, consuming valuable court time.

2. History and Evolution of Mediation in UK Small Claims

Mediation in the UK has transformed from being an informal, community-based process to a formalized part of the legal framework, particularly in small claims. The pivotal moment in this evolution was the implementation of the Civil Procedure Rules in 1999, which prioritized alternative dispute resolution (ADR) methods, including mediation, to alleviate court burdens. This government initiative, initially for specified money claims, is set to expand under Part 7 of the Civil Procedure Rules, covering a broader range of disputes.

3. Understanding Small Claims in the UK

Small claims in the UK are defined by disputes involving relatively low financial values, capped at £10,000 in England and Wales. These often include consumer disputes, rent arrears, or minor contractual disagreements. The process is designed to be accessible, allowing individuals to represent themselves and thus bypassing the need for expensive legal representation. Mediation offers a practical and efficient resolution method in this streamlined context.

4. The Role of Mediation in Small Claims

Mediation serves as a critical tool in small claims and is an essential tool for resolving disputes in a less adversarial manner than traditional court proceedings. The mediator facilitates communication between the parties, aiding them in finding a mutually satisfactory solution. This process not only saves judicial resources but also empowers individuals to take a more active role in resolving their disputes.

5. Compulsory Mediation: A Closer Look

In the UK, compulsory mediation is supported by legal frameworks and guidelines that require parties to engage in mediation before proceeding to court. This reflects a shift from adversarial to collaborative dispute resolution methods within the legal system, aiming to foster a more efficient, cost-effective, and accessible justice system. Notable aspects of the scheme include free mediation services, limited exceptions, referral to mediation after defence filing, remote mediation sessions up to an hour, and sanctions for non-participation.

Some of the notable aspects of the HMCTS Mediation scheme are;

  • The mediation is free of charge

  • There are limited exceptions

  • Cases are referred to mediation once the defence has been filed

  • the mediation is held remotely for up to an hour

  • Sanctions will be imposed for the parties not participating in the mediation process

Compulsory Mediation for Small Claims in the UK

6. Comparative Analysis: Mediation vs Litigation in Small Claims

The advantages of mediation over litigation in small claims are considerable. Mediation typically resolves disputes more quickly, often in just one session, and is more cost-effective compared to lengthy and expensive court proceedings. This efficiency makes it an attractive option for many, particularly those deterred by the complexities and costs associated with litigation.

Cost Implications

One of the most significant differences between mediation and litigation in small claims is the cost. Traditionally, litigation is a more expensive process, involving various expenses such as court fees, legal representation, and potentially, the cost of paying the other party's fees if the case is lost. In contrast, mediation is generally more cost-effective. Mediator fees are typically lower than those of lawyers, and the process usually requires fewer sessions than the numerous court appearances often necessary in litigation.

Time efficiency

Time efficiency is another crucial factor distinguishing mediation from litigation. Litigation can be a protracted process, sometimes extending over months or even years, particularly when considering preparation time, court hearings, and the possibility of appeals. Mediation, however, is designed to be much quicker. Many mediation sessions conclude in a day or less, leading to swifter resolutions. This efficiency benefits not only the disputing parties but also alleviates the burden on the judicial system.

Procedural Complexities

The procedural complexities involved in litigation versus mediation are also notable. Litigation is bound by strict rules and procedures, requiring formal submissions, evidence presentation, and adherence to legal protocols. This formal structure can be daunting for individuals without legal representation. Mediation, on the other hand, is less formal and more flexible. It allows for a conversational approach where parties can discuss their issues without stringent procedural constraints, often leading to more comfortable and satisfying resolutions.

Emotional and Relational Outcomes

The emotional and relational outcomes of mediation versus litigation differ significantly. Litigation is inherently adversarial, often resulting in a clear winner and a loser, which can strain or sever relationships between the parties. Mediation, by contrast, is collaborative. It fosters mutual understanding and communication, aiming for a resolution that benefits all parties involved. This approach is especially beneficial in disputes where the parties have ongoing relationships, such as in business or neighbourhood conflicts.

Finality and Control Over Outcomes

In litigation, the outcome is typically determined by a judge or jury, with limited control afforded to the parties involved. This can lead to dissatisfaction, particularly for the losing party. In mediation, however, the resolution is mutually agreed upon by the parties, providing a sense of control and ownership over the outcome. This control often results in higher satisfaction and better compliance with the agreed-upon resolution.

7 The Future of Compulsory Mediation in the UK

The future of mandatory mediation in the UK appears geared towards increased integration and possibly broader application. Prospects include raising the financial threshold for small claims and incorporating technological advancements such as online mediation platforms, which could further enhance accessibility and efficiency.

8. Guidance for Parties involved in Small Claims

Individuals involved in small claims are advised to thoroughly understand the mediation process, prepare all relevant documents, and approach the process with an open mind for negotiation. Selecting a mediator with appropriate expertise and experience is crucial for achieving a favourable outcome.

9. Resources and Support for Small Claims Mediation

Through various mediation and conflict resolution services, including those offered by my consultancy, Minute Mediation, we provide a range of resources and support mechanisms for small claims mediation. These include guides, tips, and consultations. As an accredited mediator, I encourage individuals to reach out for support and guidance, ensuring the mediation process is accessible to everyone, regardless of their financial situation.

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Avinder Laroya is a Senior Consultant Solicitor, Mediator and Arbitrator she is an expert in International Dispute Resolution. If you enjoyed this article you can subscribe to my newsletter below.


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