Dispute Resolution
From bet-the-farm- disputes- to courts of opinion
5 12月 2024
Insight
Mediation made mandatory for small claims
May saw the launch of new rules introducing mandatory mediation as a standard procedural step in most cases in the County Court's small claims track (generally, claims valued below £10,000). Although the new procedure is modest in terms of what it requires of parties (a one-hour telephone call with a court-appointed mediator), it is significant as the first instance of mediation being mandated as a blanket requirement across an entire part of the civil justice system.
The UK Government's original policy announcement (in summer 2023) indicated that it intended to extend the mandatory mediation procedure to higher value claims in the County Court, and potentially beyond. However, that was before the Court of Appeal's landmark judgment in late 2023 in Churchill v Merthyr Tydfil Borough Council (discussed below), which overturned what had for nearly 20 years been widely accepted as a general prohibition on the English civil courts compelling parties to engage in alternative disputes resolution (ADR). More recent government commentary suggests that the fact that judges can now order mediation in individual cases may have reduced the perceived need to extend the statutory mandatory procedure as originally planned. However, the government has not ruled that out and will be monitoring the operation of the small claims procedure. For more analysis, read our blog post here.
Recent government commentary suggests that the fact that judges can now order mediation in individual cases may have reduced the perceived need to extend the statutory mandatory procedure as originally planned.
Rule changes reflect the courts' power to compel ADR
From 1 October, the Civil Procedure Rules have been amended to reflect the Court of Appeal's decision last year in Churchill v Merthyr Tydfil Borough Council, mentioned above. As discussed here and here, the Churchill decision held that the English civil courts do have the power to order parties to engage in mediation or some other non-court dispute resolution process, and can stay proceedings to allow that to happen. (Of course, parties cannot be compelled to agree a settlement at the mediation – if the matter does not settle, the court proceedings will continue).
The changes to the rules are straightforward, largely just confirming that the court's case management duties and powers include not only encouraging but ordering ADR where appropriate. They also confirm that, when the court is exercising its general costs discretion, the matters it may consider include whether a party failed to comply with an order for ADR, or unreasonably failed to engage in ADR. Importantly, the changes are limited to acknowledging the court's power to order ADR. They do not address the much more nuanced issue of when and how that power should be exercised, which will be addressed by the courts on a case-by-case basis. For more information, read our blog post here.
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