Mediation is a form of alternative dispute resolution in which a neutral third party (i.e., the mediator) assists parties to a dispute to narrow and / or resolve the issues at hand. The mediator will not make any decisions for the parties or impose a settlement but will privately discuss the issues with the parties and work towards a negotiated settlement.
In July, the Ministry of Justice (“MoJ”) published a consultation paper announcing its plans to impose mandatory mediation for all proceedings allocated to the small claims track of the County Court . The consultation paper also sought stakeholders’ views on the right approach to supporting and strengthening the external civil mediation sector.
The consultation published by the MoJ closed on 4 October 2022 and feedback for the same is expected shortly, however in the meantime, we explain the proposals below.
What were the proposals?
1. The automatic referral of defended small claims to mediation
The MoJ proposed that all defended small claims are stayed automatically for 28 days and referred to the Small Claims Mediation Service, for a free appointment with a court-trained mediator on a compulsory basis. Parties to small claims are already automatically referred to the Small Claims Mediation Service, which offers a free one-hour telephone mediation, but this can only be used where all parties agree – under the proposed new process, parties cannot choose to opt out simply because they wish to.
In addition to reducing the time and cost of litigation, the MoJ expects the benefits of the proposal to include providing an additional 272,000 parties with free mediation and freeing up judicial time by diverting avoidable cases away from the Court system.
2. Strengthening the civil mediation sector by extending the requirement to mediate to all County Court users.
The MoJ has also outlined its ambition to extend the requirement to mediate to all users of County Courts. To this effect, it has sought views on whether there is a need for increased regulation and oversight of the mediation industry or introducing measures such as mandatory accreditation within the civil mediation sector.
Advantages of the new proposal for mandatory mediation
As explained briefly on our page here, mediation can be a much faster and cost effective option than going to Court. Mediation can also be a useful tool for encouraging settlement as it provides a private forum in which the parties can gain a better understanding of each other’s positions, thereby making a settlement more likely. Additionally, it enables frank discussions to take place between the parties and offers to be made and revised without the fear of them being used by the other party at a later stage in Court.
The new proposal for mandatory mediation could also encourage parties to engage more meaningfully in the discussions during a mediation. Therefore, even if the mediation itself does not result in a successful agreement, the parties may be more inclined to reaching an agreement in the days following a mediation.
Furthermore, the new proposal could go some way towards changing people’s perspectives about the resolution of legal disputes. It may encourage the use of and bring to light the benefits of further alternative dispute resolution methods. For example, Courts will typically decide cases on a “win or lose” basis, however an advantage of mediation is that it can provide for more creative and “out of the box” solutions such as revisions to a contract or alternative forms of compensation.
Disadvantages of the new proposal for mandatory mediation
On the other hand, there may be some dispute types for which mediation is unsuitable, perhaps because of the nature of the case itself or due to the circumstances, and in these cases, there is the possibility that mandatory mediation could simply become a “box ticking” exercise for the parties. This may reduce the effectiveness a mediation could otherwise have and as such, it may be sensible for the MoJ to propose the option for parties to opt out of mediation, rather than imposing compulsory mediation.
Summary
It is yet to be seen whether the new proposals will be welcomed or considered as a step too far. Mediation would no doubt go some way in diverting avoidable cases away from the Court system, but any implementation of mandatory mediation may require more oversight of the civil mediation industry to ensure a fair and constructive process is achieved that does not undermine the effectiveness of mediation as a highly regarded alternative dispute resolution method.
Herrington Carmichael LLP has a specialist team of Dispute Resolution lawyers with many years’ experience in dealing with disputes. If you would like to know more, please contact stephen.baker@hc.law or call 01276 854 922.
This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter.
