The Civil Justice Council has published a report, The Resolution of Small Claims, in which it said compulsory use of the Small Claims Mediation Service (SCMS) for claims worth less than £500, excluding personal injury and housing disrepair, would be free and therefore costs-neutral for the parties.
It’s a bit disappointing that the only movement towards compulsion in mediation appears to be in the realms of small claims and even smaller small claims. If the CJC wanted to change the culture it would recommend compulsory ADR in higher value claims where there would be a costs saving. There are seldom any costs recovered in small claims. Essentially the message is that very small claims just need sorting out summarily without going to court because they are a bit of a waste of time! Moreover, what about suggesting parties use ADR before starting a claim in the first place, perhaps using the ADR providers under the ADR Regulations?
It is hoped that the MOJ will be more progressive when responding to the call for evidence on compulsory mediation. So far the recommendations have emphasised low cost mediation in low value cases. Mediation works across the board!
It should not be viewed as “too burdensome or disproportionate in terms of costs and time”, and, because it was a telephone service, “should ordinarily cause no difficulties for vulnerable parties”.
After a defence is filed, attendance at a mediation appointment or some other form of ADR would be compulsory.
If the claimant refused ADR, the claim should be stayed to allow compliance and “thereafter struck out after a set period of time”.
If the defendant refused, there could be costs sanctions, with a “rebuttable presumption that the refusal was unreasonable for the purposes of CPR 27.14(2)(g)”.
The CJC also recommended a specific pre-action protocol for claims of less than £500, highlighting the need for pre-issue ADR, with parties confirming by ticking a box that they had read it.
The CJC said data provided to its small claims working group showed that around 50% of small claims issued between March 2018 and April 2021 were for sums of £500 or less.
For claims of £500 or more, the SCMS would remain available on an opt-out basis. Referring to its interim small claims report published last summer, the CJC said private mediation schemes should be an option and encouraged.
The CJC said Her Majesty’s Courts and Tribunal Service (HMCTS) should continue to investigate other methods of ADR than the SCMS for bulk claims.
Meanwhile, HMCTS should undertake a review of third-party mediation pilots with the aim of making this form of ADR available for all small claims.
We run the Manchester Mediation Pilot. The difficulty has been lack of judicial engagement as the judges have to make referral orders.
The CJC recommendations are not revolutionary as mediation has been opt out for claims under £500 for some time. Moreover, it is generally disproportionate to use third party mediation in very low value cases. We know because we are an ADR provider under the ADR Regulations.