Court reform: compulsory mediation for small claims up to £10,000

The Ministry of Justice has published plans for significant reforms to the civil justice system, including compulsory mediation for small claims of up to £10,000, such as disputes over goods and services.

Why is compulsory mediation being proposed? 

Civil justice in England and Wales is mainly dealt with in the county courts. It covers an extensive range of cases – for example, businesses trying to recover a debt, damaged goods, or individuals or companies claiming for a breach of contract. 

Every year millions of businesses and individuals go through the civil courts with small claims, with considerable time and cost implications.

Mediation services are generally viewed as a quicker and cheaper way of resolving such disputes and reducing the burden on the court system. 

However, evidence suggests that voluntary uptake has remained limited, particularly for small claims under £10,000, which represent 61% of claims in county courts.

The government says that measures to make mediation mandatory will divert up to 20,000 cases each year from the court system, freeing up overstretched judicial resources for more complex cases.

How would a mandatory mediation system work?

Under the mediation plans, people would be 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 court hearing.

During the mediation process, the parties involved will speak separately to the mediator to see if they can find common ground. If a solution is brokered, both parties will agree over the phone for it to be legally binding through a formal settlement agreement.

The full proposals are set out in a Ministry of Justice consultation paper: Increasing the use of mediation in the civil justice system.

The proposals are in the consultation phase which will last ten weeks. The £10,000 limit would not include personal injury or housing disrepair claims with a lower threshold.

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