It takes two to tango

So compulsory mediation may not end delays in the civil courts

Claimants seeking to recover debts of up to £10,000 will have to try mediation before their cases can be heard in the small claims courts of England and Wales, the Ministry of Justice announced in a press release this morning.

“Over 180,000 parties will be referred automatically to a free hour-long telephone session with a professional mediator provided by HM Courts and Tribunals Service before their case can be progressed to a hearing,” the government said.

Ministers believe that settling claims in this way could save up to 5,000 sitting days a year, allowing judges to concentrate on more demanding cases.

Mediators are not judges. In the small claims court, they are not likely to be lawyers either. They act as intermediaries, shuttling from one party to the other in an attempt to find a compromise that both sides are willing to accept. A small claims mediation service has offered voluntary mediation through the county courts since 2007, settling over half the claims referred to it each year within weeks of starting the case.

How effective is it? On Law in Action in June 2020, I interviewed a mediator who has worked in the court service for 30 years and a court user whose dispute he had successfully resolved. You can listen to the item here, starting at 13.53 and ending at 20.27. Although Jason Haines, the mediator, is careful not to break any confidences, the cases he successfully resolves seem to be ones where claimants agree that defendants can pay a little less or take a little longer.

Comment

Don’t be misled by the claim that mediation will be “free”. Bringing a claim worth between £5,001 and £10,000 will cost you £455 in court fees before you start. For this, you might reasonably expect to have had your claim decided by a judge.

Mediation can be an effective way of settling disputes. Making it mandatory was recommended last year by the Civil Justice Council — though only for claims worth up to £500. The government has chosen to multiply this figure by 20.

With an estimated 92,000 cases a year each needing at least an hour of a mediator’s time, the courts and tribunals service will clearly need to recruit and train many more mediators than it has at present. Wisely, the government is making no promises on when any of this will happen.

For compulsory mediation to work, there has to be an effective sanction against a party that is unwilling to consider making any compromises. And it’s no answer for the government to say that this will lead to “a reduction in lengthy… county court cases”: delay is exactly what every defendant wants.

So the Civil Justice Council recommended different sanctions. If a claimant refuses to mediate, the claim would be put on hold and then struck out. If the defendant refuses to comply, there could be costs penalties.

But these sanctions are clearly controversial. Why should a banker who lent a customer £10,000 be forced to choose between accepting less and having the claim dismissed? Why should a defendant being sued by a dodgy wheel-clamping company have to waste an hour on the phone when it’s clear that the claim has no substance?

Little wonder that issues such as these are simply not addressed in the government’s press release.

Update 1300: within the past hour, the government has published a consultation response answering some of the questions raised in this piece and by my readers. It’s not clear why this was not published at the same time as the press release.

There is still no indication of when the reforms might take effect. Instead, the Ministry of Justice has said it “will announce the implementation details and timings in the coming months”.

On sanctions for non-compliance, the government says:

Settlement at mediation will remain voluntary, and all parties who need a hearing before a judge to resolve their dispute will be able to have one…

Parties will be expected to engage in mediation in good faith. Many respondents to the consultation advocated an approach that allowed mediators to assess whether parties had engaged adequately in the mediation process. This was seen as a way to mitigate the possibility that parties fail to genuinely engage with mediation as a tool to facilitate resolution. However, others felt that this approach would breach the confidentiality of the mediation, and potentially damage parties’ confidence in the process.

On balance, the government is of the view that, at this time, the only requirement will be to attend the scheduled mediation appointment, although we may review this decision following evaluation of the policy.

If a party does not attend their scheduled mediation appointment, a judge will be able to apply a suitable sanction at their discretion. This may be a strike-out, which means the judge can automatically rule in the other party’s favour. Or it may be a cost sanction, which means the judge can order the non-compliant party to pay for part or all of the other party’s legal or court costs (even if the judgment overall is in favour of the non-compliant party).

As various respondents pointed out, without meaningful sanctions integrated mediation is unlikely to be effective. As mediation will be part of the standard court process, sanctions should be in line with other failures to comply with court rules. Judges will be able to take mitigating circumstances into account when deciding whether to apply sanctions for non-attendance.