Mandatory Mediation on the Move: Credit Hire Claims Enter the Frame
The onward march of mandatory mediation in civil justice took a significant step forward this week with the launch of a Ministry of Justice (MoJ) pilot scheme aimed at road traffic accident (RTA) claims—specifically, credit hire disputes.
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The New Pilot: What’s Changing?
The MoJ has introduced a one-year pilot for certain lower-value RTA claims issued via the Online Civil Money Claims (OCMC) service. While personal injury elements are excluded, the pilot covers credit hire claims for fixed sums. These often involve claims for temporary replacement vehicles while a damaged vehicle is off the road.
During the pilot:
- Eligible claims will be automatically referred to mediation through the Small Claims Mediation Service.
- A public consultation is expected during the trial, with a view to extending mandatory mediation permanently if successful.
This forms part of the government’s broader digital justice strategy, which aims to streamline money claims and reduce the burden on courts.
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Why Credit Hire?
Credit hire claims have long been seen as a drain on judicial resources, clogging up the courts with technical arguments over rates, periods of hire, and need. In a recent ruling on credit hire costs (Tescher, 2024), Lord Justice Birss noted that RTA cases take up a “significant” amount of district judges’ time, highlighting that one major claimant firm sends ten barristers to court each day on average to deal with these types of claims.
Mediation offers a practical alternative—resolving matters without a full trial, at lower cost, and with greater speed.
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The Bigger Picture: A Shift in Culture
This pilot is the latest in a series of moves signalling a major cultural shift in the civil justice system, away from adversarial litigation and towards resolution through dialogue.
Earlier MoJ reforms already introduced:
- Mandatory mediation for small claims up to ÂŁ10,000
- Proposals to expand mediation to fast track and multi-track cases
- A growing reliance on online platforms for case management and communication
The Civil Procedure Rule Committee (CPRC) is playing an active role in shaping the rules and launching consultations to refine the model.
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What Does This Mean for Practitioners and Parties?
- Automatic referral: Litigants will be directed to mediation as part of the process—non-compliance may eventually carry costs consequences.
- Increased efficiency: Parties can resolve straightforward hire rate disputes without requiring court time.
- Opportunity for proportionality: Mediation encourages practical settlements and discourages disproportionate legal costs in low-value claims.
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Conclusion
The introduction of mandatory mediation in credit hire disputes marks a pivotal moment in civil justice reform. It acknowledges what many practitioners have long known: that some disputes, while legally complex, are better resolved through dialogue than litigation.
As the MoJ continues to expand the reach of mandatory mediation, practitioners will need to embrace a more resolution-focused approach. For claimants and defendants alike, this means not only preparing cases—but preparing to talk.