Small Claims Mediation – A brief overview & useful tips.

Mediation is a form of Alternative Dispute Resolution (ADR) in which a neutral third party communicates between the parties to assist in their negotiations for settlement. It is a confidential procedure that provides the parties an opportunity to present offers and attempt to reach a settlement, without influencing the court process if the matter does eventually settle at a final hearing (also referred to as ‘without prejudice’). 

The main role of the mediator is to assist parties by communicating each side’s position to the other. They must be independent and impartial and as such, will not provide any advice to the parties. 

If proceedings have already been issued, mediation commonly occurs after the filing of the Directions Questionnaire, if both parties have stated they are willing to mediate. If the value of the claim is low, the mediation process is perfect for parties without a solicitor however it may be wise to instruct a solicitor on any high value disputes or if legal representation is preferred. 

Should you instruct a solicitor to attend they will require: detailed instructions on what offers they are able to make, when further instructions should be sought (usually after hearing the other sides position) and authorisation to agree a settlement. It should be noted that if a final settlement is agreed, they will need the authority to agree the value because it is binding on the parties. 

The HM Courts & Tribunals Service will provide a time slot for your mediation appointment and it is likely to run for one hour (this will be longer on claims above £10,000.00). As the aim of mediation is to reach a settlement, it is important the parties only attend if they can answer ‘yes’ to the following three statements: 

  • “I am willing to negotiate on the amount of the claim and will consider a compromise”;
  • “I have enough information about the claim to enter into negotiations and do not require any further evidence from the other party before starting mediation”; and 
  • “I’m available for the entire time slot on the date of my appointment” 

If you cannot answer yes to all three statements, mediation may not be suitable for you or your case. 

Following the outbreak of COVID-19 the mediation service has adjusted and appointments can now take place virtually – mostly via telephone. This change has given the service the opportunity to continue its work of assisting parties to reach a settlement without the need to proceed to a final hearing. A mediator now calls the participants and communicates with each party separately once the other has presented their position. They do still act as a go-between for the parties and present each parties position to the other in an un-biased manner. 

If the value of the claim is under £10,000.00, parties can access the mediation service offered by the court system for free. If proceedings are issued, a fee is paid for this and should you receive a Defence but mediation is an option – there is no separate charge for the mediation. 

The aim of mediation is for the parties to reach an agreement and should a settlement be agreed, this will be binding on the parties. In case of a successful mediation, the parties will be obliged to file an order with the court to confirm the same. This will usually be in the form of a Consent Order or Tomlin Order. 

Mediation generally has a high success rate however we have included some ‘advantages and disadvantages’ below: 

Mediation is a quicker and less expensive option to reach a settlement. If the result of a mediation is that the parties reach an agreement, this avoids the legal costs of proceeding through to a final hearing. Even if a final settlement is not reached, mediation often helps the parties narrow the issues. Mediation does not typically allow for disclosure of documents. It can be agreed between the parties that documents are disclosed prior to the mediation, but this is not common practice therefore it can block a mediation if additional information and/or documents are required. 
Mediation enables the parties to be in control of the dispute. Should a case proceed to a final hearing, the final decision will be for the Judge to make. An advantage of mediation is therefore that the parties themselves can make the final decision and have the opportunity to reach an agreement they are happy with. If a party believes they have a very strong case, this can be the cause behind a refusal to mediate. As the point of a mediation is for the parties to reach a settlement and possibly reach a compromise, a party with a strong case may not wish to mediate if they believe they will achieve a 100% settlement (or successfully defend a case) at a final hearing. 
Mediation is a voluntary process. The courts encourage parties to reach an agreement without proceeding to a final hearing and if one party refuses, they may be penalised by a Judge if settlement was possible without attending court.  If the mediation does not result in a settlement, it will have caused a delay in the general court process and if the service is not free (on claims above £10,000.00) it will be an additional expense. 
Anything discussed at a mediation is confidential and ‘without prejudice’. This means it cannot be referred to at a final hearing and it allows the parties freedom to consider other avenues of settlement, without it being detrimental to the case. Should your case be above £10,000.00, the cost of a mediation may be between £5,000.00 – £15,000.00. It is therefore important to consider the economic position when considering whether to mediate or not. 

If you do not respond or reject the take part in mediation without good reason, you will usually have to explain why to the Court and if the other side is successful, it is likely the court will order sanctions in the form of costs. 

The mediation service is an excellent opportunity for the parties to reach an early settlement, without the need (or the cost) of proceeding to a final hearing. It should be given serious consideration as attendance can be very useful if you are willing to reach a compromise. Parties should not automatically attend mediation for fear of cost consequences at a final hearing, but the three statements above play a key role in your consideration of mediation. 

Mediation doesn’t work for every case… consider your options and attend if a compromise is possible. 

If you are in the process of attending a mediation but require some guidance, or your case is reaching the point where mediation is likely, we can help by advising you of your options and attend on your behalf should this be your preference. Please call 01283 526200, alternatively you can send us a message and we will get in touch at a time that suits you. 

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