Under current government proposals mediation will be compulsory in all claims allocated to the small claims track. However, it is also considering whether to extend that requirement to all claims in the County Court. You can consider the proposal and have your say via the Consultation Paper.
The Proposals
The proposals seek to tackle low levels of uptake of mediation and drive a culture shift in attitudes to litigation. The paper makes it clear that there will be no requirement to settle. Furthermore, as the current small claims mediation service (SCMS) is court sponsored and therefore costs neutral to the parties, it will not be an “onerous” obligation.
In reality, costs of mediation will be passed on to all court users through court fees. It will only be costs neutral if it succeeds in reducing the number of cases going to trial.
The Role of Mediation in Settlement
Statistics show that mediation has a high success rate (up to 86%). But we should be wary of the assumption that mandatory referral to mediation will reduce the number of cases going to court by a similar amount. About 96% of civil cases in England settled outside court. However, 1.2 million claims were issued in the Civil Courts in 2020 but in the same year there were only 16,500 mediations (1.38%). This means that at least 94.62% of all of all claims settle other than by mediation.
It is questionable what benefit mandatory mediation will bring to the vast majority of cases which would have settled anyway. Particularly if court fees increase to fund it. And in those cases where agreement is not possible mandatory mediation will simply be a box ticking exercise.
The Report gives the mandatory mediation scheme in Ontario, Canada as an example of how mandatory mediation can be successful. But a 2001 report showed that mandatory mediation resulted in “full settlement of 40% of cases earlier in the process”. Overall, around 98% of cases settle before trial in Ontario.
Summary
Mediation is a useful tool for parties who want to settle. Indeed, it can force parties to review the weaknesses of their case and make settlement more likely. However, making it mandatory it is unlikely to make a significant difference to the number of cases proceeding to trial and any benefits will probably be outweighed by the costs.
You can have your say by visiting the Consultation, which closes on 4 October 2022.
Should you have any questions, you can contact the team at civilandcommercialcosts@clarionsolicitors.com.
