Following the handing down of the ground-breaking judgment by the Court of Appeal in Churchill v Merthyr Tydfil County Borough Council on 29 November 2023, which removed a long-standing thorn in the side of mediation, positive developments continue to roll out at pace in England and Wales.
Money claims worth less than £10,000 (about US$12,665), filed on paper or through traditional online systems in the courts of England and Wales, have since 22 May 2024 been subject to the Ministry of Justice’s mediation pilot scheme. That scheme requires parties to attend a free, one-hour telephone mediation arranged through the Small Claims Mediation Service before the claim can then proceed to court if no settlement is reached. This development will extend to all small money claims later this year, including those made via the Online Civil Money Claims service.
The workload of the Small Claims Mediation Service is expected to increase significantly as a result. The service has been proactive in anticipating this increased workload and already recruited an additional 39 mediators. The Ministry of Justice’s impact assessment suggests that settlement rates of between 15-55% are expected. That could free-up between 1,400-5,200 sitting days for judges, equating to between 9-32% of all sitting days in the lower (county) courts in England and Wales.
The benefit will, hopefully, be that the larger and more complicated claims can more readily be accommodated and proceed faster through the courts. Further, with the reduced number of sitting days expected, judges should have more time within which to contemplate how best to facilitate parties to use more creative solutions for larger claims that fall short of imposing resolution by trial.
That should widen the ‘sweet spot’ where specialist commercial mediators may shine more often. The head of justice at the Law Society of England and Wales, which represents solicitors, has indicated that the society opposes blanket mediation in principle. Even so, the society remains sympathetic to the concept of mandatory mediation, in principle, for small claims. That is for good reason: small claims litigants are less likely to be legally represented, and so may be more likely to need guidance on resolving their disputes amicably without the need or trepidation of a full trial.
Represented parties are, by comparison, better informed and far more likely to appreciate that legal proceedings and a trial are a last resort. Such parties will be advised of the benefits of mediation and other forms of non-court based dispute resolution before and throughout legal proceedings.
Further, on 24 May 2024, the English High Court has, for the first time, in NA v LA [2024] EWFC 113 made use of amendments to the family court rules in force since 29 April 2024. Those amendments enable the court to
adjourn proceedings and oblige the parties to attend non-court based dispute resolution, even if they do not agree, before the proceedings continue. The court made judicious use of the amended rules where, in the judge’s view, this was in the best interests of both parties.
All of these developments auger well for the increased and more efficient use of mediation in England and Wales. They also cement, as the chair of the judicial ADR liaison committee indicated last year, the view that the justice system in England and Wales is in the midst of a sea change, with an increasingly positive attitude to mediation by the judiciary, the legal profession and litigants.
With fair winds, after the General Election on 4 July 2024, the United Kingdom will be able to press ahead with implementing the necessary legislation and rules that have to be put in place to facilitate the smooth operation of the UN Convention on International Settlement Agreements Resulting from Mediation. That convention was signed last year by the UK Government and once ratified will also help to reinforce the manifold benefits of resolving disputes by mediation in England and Wales.
How could mediation help?
While a mediator sometimes does not become involved until legal proceedings are underway, that usually does not have to be the case, and early intervention can often be far more desirable.
At the point when substantial costs have already been incurred, achieving a satisfactory settlement can become difficult and the extra costs involved can become an obstacle to an amicable solution.
As some disputes can be very expensive and time consuming to resolve formally and may invite unwanted publicity, mediation may facilitate a faster, commercial and discreet resolution.
A wide range of commercial solutions, which judgments or awards cannot achieve, are possible, particularly where there is an on-going relationship, to seek a win-win result, not a bruising win-lose.
A specialist commercial mediator is not only an expert at helping parties reach a mutually acceptable agreement but will understand the commercial situation of both sides and the constraints they face.
The mediator will use their understanding of the way business is done to help the parties to come up with inventive solutions, including ones that the parties might not have considered on their own.
The benefits of seeking an earlier resolution to a dispute
Time is often a big factor in resolving a dispute satisfactorily. Addressing a problem as soon as it is apparent and having an early session with a mediator may resolve the issues promptly by fostering a collaborative approach by the parties and help to improve the relationship.
Where difficulties are allowed to worsen and communication becomes sporadic and combative, it is possible to waste a great deal of time achieving little except a worsening of relations, so it is important to be proactive.
It is also important to approach a problem with an open mind and some flexibility because resolving a dispute at an early stage involves willingness to compromise, and doing so can have many benefits to all involved.
In helping the parties to see the pros and cons of escalating the dispute, and to consider other important ramifications of perpetuating a dispute, a mediator could help the parties to appreciate the perils and to see the value of improving the situation.
Contact us
At Lux Mediation, we offer a range of different Dispute Resolution Services, designed to deal with all types and stages of disputes. We are experienced in and understand the subtleties of online mediation. Our mediators have extensive credentials and experience in areas including maritime, international, EU and general commercial and civil law.
We can step in early to advise you in respect of seeking to resolve a dispute. We work internationally and have an in-depth understanding of cultural differences, which are often of great importance in a successful mediation related to cross-border transactions.
Our mediators are experts in both mediation and commercial enterprise and we have an excellent track record of success in helping businesses to put difficulties behind them so that they can focus on their goals and other more productive activities.
If you would like to explore further whether we can help you to resolve a dispute or you have any questions about the process, please call Lux-Mediation on +44 (0)7876 232305 or email mediation@lux-mediation.com.
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