Compulsory Mediation for Small Claims of up to £10,000
The Ministry of Justice announced on 25th July 2023 that there are plans to introduce legislation into Parliament to provide that mediation will become mandatory in specified money claims of up to £10,000 in value.
The goal of this procedural change is to reduce the courts’ case backlogs by encouraging out-of-court settlements in small claims. To implement this plan, the Small Claims Mediation Service (SCMS) will be expanded by recruiting more mediators and updating relevant technology.
Once a defence is filed and the case is allocated to a court’s small claims track, claims with values under £10,000 will automatically be assigned to the mandatory mediation service. The compulsory mediation will involve a one-hour phone call with a professional mediator, who will speak to each party individually to determine any common ground between them. If a settlement is reached, the parties can agree to a legally binding settlement agreement. This will negate the need for court proceedings in the case. This service will be free, and the parties will be expected to participate in ‘good faith’. The mediator will not, however, be required to state whether the parties engaged adequately.
A case will not be able to proceed to a hearing unless mediation has taken place. There will be no exceptions to the requirement to participate in mediation. If a party fails to attend mediation, they will face costs sanctions or a strike-out imposed by the court.
If you’re facing a legal dispute involving a money claim under £10,000, it’s crucial to stay informed and prepared for the upcoming mandatory mediation. To discuss your specific case and ensure you’re well-prepared for these changes, don’t hesitate to reach out to legal experts. Contact us today at 0333 323 5292 for expert guidance and support.
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