Margaret Doyle explores questions to be asked about the latest proposals for mediation to be mandatory in small claims in England and Wales.
‘…mediation is in the crucible of politics, economics, professional interests and ideological debate. In this context it is no surprise that it takes on many shapes, forms and value orientations.’
This quote, from Mediation: Principles, Process, Practice written more than 20 years ago by Laurence Boulle and Miryana Nesic, captures neatly the crucible in which current debates are taking place about the role of mediation in the justice system in England and Wales. For more than 25 years a range of opt-ins, opt-outs, mediation information sessions, and other forms of compulsion have been tested. It was the Civil Justice Council’s report last year exploring the legality of compulsory mediation that appears to have given the green light to new proposals from the Ministry of Justice. And before that, the Department for Education proposed in its SEND Review Green Paper earlier this year that mediation should be mandatory in statutory appeals of special educational needs and disabilities (SEND).
What is being proposed
The current Ministry of Justice (MoJ) consultation on Increasing the use of mediation in the civil justice system has three main proposals:
– to require parties in defended small claims to participate in free court-based mediation
– to float the idea of rolling out mandatory mediation in larger claims
– to explore options for government oversight of regulation of the mediation profession
The consultation closes on 4 October.
This post focuses on the headline proposal: for mandatory mediation in England and Wales for small claims (generally those valued under £10,000), which the MoJ states make up 61% of claims within the county court. These are, the consultation paper explains, cases ‘where an individual or a business believes their rights have been infringed. Types of civil case include: businesses trying to recover money they are owed; individuals seeking compensation for injuries; or individuals or businesses claiming for poorly provided goods or services. The vast majority of civil cases take place in the County Courts, where judgments usually call for the payment or return of money or property.‘ (p7)
A court-based small claims mediation service (SCMS) is already available free to parties in small claims on a voluntary basis. However, the MoJ notes that currently, in only 21% of small claims do both parties agree to attend a mediation session with the SCMS.
To address this low uptake, the proposal, if implemented, would require parties in defended claims to attempt mediation. The process would be that once a claim is lodged and a defence filed, the case would be paused and referred to mediation by the court-based mediation service. If a party requests an exemption from the requirement to mediate, this request ‘could be’ assessed by a judge. (The paper notes that ‘Where the Government itself is party to a civil small claim dispute, the case will be exempt from the requirement to mediate.’ This is contrary to previous commitments to ADR). If a judge determines the case is exempt, it proceeds through the court process. If a judge declines to exempt the case, it is paused for 28 days and referred to mediation.
The proposed model of mediation
The consultation paper explains the mediation process:
‘A telephone appointment with the court mediator is arranged and both parties are advised how to prepare for this process. On the day of the appointment, the mediator speaks to each party separately and helps to facilitate a negotiation to see if they can agree a settlement that they are both happy with. If a party is non-compliant with the requirement to mediate, the case will be re-stayed, with sanctions applied for continued non-compliance.
‘Where the claimant and defendant do agree a settlement, this is written up as a formal contract that is legally binding and registered with the court as an enforceable order. This means that if one of the parties fails to act as agreed, the claimant can take enforcement action. Where the claimant and defendant do not reach an agreement, the case is returned to court and litigation resumes.’
One of the examples of successful mandatory mediation for civil claims that is most cited by the MoJ (and by many respondents to its call for evidence) is the Ontario Mandatory Mediation Program in Canada, which requires civil claims (with exceptions) to be mediated before proceeding to court hearing. The model used in this mandatory scheme is private-sector mediators on court roster working on a fixed-fee basis. Position statements are expected from parties in advance, and preparatory work by the mediator is costed into the fixed fee. Mediations are in person and generally for three hours or less (‘Under the Mandatory Mediation Program, parties do not have to continue a session for more than three hours and the mediator can end the session earlier. If the mediation is not concluded within three hours, with the consent of all parties, the mediator may also continue the session’).
This is a very different model to that proposed by the MoJ for small claims in county court. What is proposed by the MoJ is mandating the existing SCMS model of a free one-hour ‘appointment’ with the mediator, which involves a shuttle mediation (ie with the parties separated) conducted via telephone.
Among the questions to consider is whether the proposed model should be called ‘mediation’, given that there is no opportunity for parties to engage with one another, it is time limited to one hour and there is a potential risk that mediators will be working to settlement targets from the MoJ. Perhaps ‘assisted negotiation’ would better describe the process. For more on these and other questions raised about the SCMS model, see ‘Small claims mediation – does it do what it says on the tin?’, which explores the findings of research conducted on the small claims mediation service pilots.
Sanctions for non-compliance
Proposed sanctions for non-compliance include an adverse costs order (one party is ordered to pay part or all of the other party’s litigation costs) or striking out a party’s claim or defence. Decisions on non-compliance would be taken by a judge.
A number of questions arise in relation to enforcement. How would this work, and is it intended to target only those who refuse to attend a mediation or also those who engage in mediation half-heartedly? At a roundtable meeting with the MoJ, participants discussed the difficulty of a judge determining ‘perfunctory performance’ by a party at a mediation where the judge had not been in attendance and which was confidential. Participants also noted the risks of the sanctions making the point that in the small claims process, parties bear their own costs, so a costs order would not be appropriate, and striking out a claim would be disproportionate. How would this encourage confidence in the process?
The MoJ proposes that anticipated benefits of mandating mediation are ‘helping an additional 272,000 parties to small claims each year access the opportunity to resolve their dispute consensually and avoid the time and cost of litigation’ and ‘diverting an anticipated 20,000 avoidable cases from the court system and freeing up an expected 7,000 judicial sitting days to be used for more complex cases’.
Settlement rates in the SCMS are 55.6%, which is lower than those generally reported in mediation. A presentation from HMCTS stated that in 2020-21, of the more than 35,000 cases taking up the offer to mediate and of the more than 20,000 mediations that were actually held, 11,464 settled at mediation. This suggests that nearly half of those cases going through the SCMS are either unresolved or proceed to a court hearing. It is unclear that, if parties are compelled to mediate, a higher rate of settlement will result.
Other than the mention of claims in which the government is a party, there is little detail on what claims would be exempted from the requirement to mediate. In a roundtable discussion with the MoJ, participants suggested housing disrepair and disability discrimination claims as among the case types that should be exempted.
The view on housing disrepair may have taken account of the feedback from the Housing Mediation Pilot scheme which was introduced in February 2021 and has now ended. As for disability discrimination claims, we know from evidence given by disabled litigants to the House of Lords Inquiry on the Equality Act that the SCMS model is not considered satisfactory for disability discrimination claims. Jonathan Fogerty, an experienced self-represented litigant who gave evidence to the inquiry, described his experience with using the small claims mediation service for a discrimination claim:
‘I issued court proceedings, so I then had the opportunity of going to the small-claims mediation service, but it was over the phone. I had thought, when I engaged in it the first time, that it would be a three-way telephone conversation between me, the service provider and the mediator on the phone so that these issues could be aired. It was strictly limited to one hour, and it was me on the phone talking to the mediator. The phone got put down. The mediator picked up the phone to the service provider. They had a conversation. It was not fluid, there was no exchange of ideas, and it was totally unsatisfactory.’ (p.619)
Access to advice
It is unclear how the MoJ proposes to ensure that parties have access to independent legal advice. A worrying case study is included in the consultation paper that describes a mediation involving Helen, who had a problem with a roofer who refused to return and fix a problem with his work. She had to hire someone else to carry out a repair, and she wanted the original roofer to pay for the repair. In mediation the roofer agreed to pay for the cost of the repair, and Helen agreed to waive her right to hold him liable for the roof, in effect negating any warranty she was entitled to. There is no suggestion that the mediator (who, in order to remain impartial, is not permitted to give either party legal advice) identified this as a potentially problematic settlement for Helen.
As a mediator, I am pleased that mediation is, in the words of Boulle and Nesic, ‘in the crucible of politics, economics, professional interests and ideological debate’. I know that the process is flexible and hugely helpful in may circumstances. But as a mediator I do not want to see mediation being so amenable to a range of what the authors refer to as ‘value orientations‘ that it becomes unrecognisable.
In addition to the proposal for mandatory mediation for small claims, the MoJ consultation sets out a clear ambition to roll out some form of compulsion for all civil claims, albeit one using mediators in the private sector, not court-employed mediators. This then raises questions, also set out in the consultation paper, about the government’s role in ensuring a robust system of regulation of the mediation profession. These are significant issues and important discussions that mediators should contribute to.