The Ministry of Justice announced this week that legal disputes over claims up to £10,000 are to be resolved through free mediation. Whilst this may cut down the amount of civil court cases, the government has conceded that it could see solicitors lose some of their work.
In an impact assessment of increased use of mediation in the civil justice system, the government said that “lawyers may lose work representing small claims parties” given that many cases will no longer progress to a hearing. Mitigating this, they said that “we make the assumption that they will find work of equal or next-best economic value”.
This suggestion may have some credence, with the government noting that though 20,000 cases will be diverted away from court, it will free up as many as 7,000 judicial sitting days so that more complex cases can be heard. Overall, around 272,000 people should be able to access the free mediation.
However, this is not the end of it. The government have said their future ambition is “to extend the requirement to mediate to all county court users”.
As of now, 55% of cases mediated via the SCMS (Small Claims Mediation Service) result in a settlement, yet only 15-21% of parties utilise the service. The government’s evidence suggests this is due to “many court users not understanding the mediation process and its benefits”.
What is set to change?
The government’s plans will see mediation made compulsory for small claims of up to £10,000. 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 hearing.
During the session, the parties involved will speak separately to the mediator to see if there is a common ground between them. If a solution is brokered, both parties will agree over the phone for it to be made legally binding through a settlement agreement.
The proposals form part of wider efforts to promote the use of mediation and help people resolve their disputes away from the courtroom. The move follows a government call for evidence which examined how dispute resolution services, such as mediation, could be used more widely to resolve disagreements away from court. It found that mediation often offered faster, cheaper and more flexible solutions, but more needs to be done to encourage its use.
How has the sector reacted?
Justice Minister Lord Bellamy QC said:
“Millions of businesses and individuals go through the civil courts every year and many of them simply do not need to.
Mediation is often a quicker and cheaper way of resolving disputes and under our proposals this will be free of charge for claims up to £10,000.
This could also help free up vital capacity in the civil courts to deal with more complex cases quicker”.
Law Society vice president Lubna Shuja commented:
“It is encouraging to see the government looking for ways to reduce the court backlogs and ensure disputes are resolved quickly and at minimal cost.
We welcome greater access to low-cost mediation, which will be a suitable method of resolution in many cases.
However, if parties are not interested in entering into mediation in good faith it could waste time as well as money, and there is a further risk that mediation may entrench imbalances of power between parties.
The mediation service needs to be properly funded and well-resourced to facilitate these proposals. With proper funding, it could help reduce the court backlogs.
We will consider the proposals carefully to see whether they contain sufficient safeguards to ensure they contribute to justice rather than undermine it.”
Federation of Small Businesses (FSB) National Chair Martin McTague said:
“We support a more accessible, fair and affordable dispute resolution system. These proposals are a step in the right direction to help speed up access to justice, and to avoid expensive litigation for small claims.”
Automatic or mandatory mediation has been in use in three Canadian cities in Ontario for over 20 years, and a recent survey of Ontario Bar Association members showed that 90% of respondents favoured expanding it further.
Jennifer Egsgard, an executive member of the Ontario Bar Association’s Alternative Dispute Resolution Section said:
“A major early study on Ontario’s mandatory mediation programme showed that it significantly reduced the time taken to dispose of cases, decreased costs to litigants and led to a high proportion of cases being completely settled earlier in the process.
It also found that both the people and lawyers involved in these cases experienced considerable satisfaction with the process.”
