Mediation should be first step for small claims disputes, says CJC

Small claims disputes worth less than £500 should be kept out of court with mediation the first port of call, the UK government’s Civil Justice Council (CJC) has said.

Figures from the CJC reveals that county courts currently deal with more than one million small claims cases each year, while approximately half of small claims issued between March 2018 and April 2021 were for sums equivalent to £500 or less.

The recommendation comes as figures from the CJC show that claimants across the country were forced to wait an average of 38 weeks for a hearing.

The latest findings come from the CJC’s final report on the resolution of small claims, following the publication of an interim report in June 2021

Report recommendations

In addition to pressing claimants into mediation for all claims outside of personal injury and housing disrepair, the report indicates that for any defendant who refuses to engage in mediation, this will be deemed as ‘unreasonable behaviour.’ Key recommendation include:

• A full review of the adequacy of HM Courts & Tribunals Service signposting and guidance for potential litigants, which should include new videos to guide them through the process.
• A specific pre-action protocol for small claims under £500. This should set out, in a simple and straightforward language, the relevant procedure and the need to consider alternative dispute resolution (mediation).

Improved mediation service

According to the report, the claims mediation service has undergone significant changes to ensure better performance in recent times, and an appointment is now offered in all suitable claims. It adds that potential parties to small value litigation should be ‘clearly informed’ that mediation is compulsory in defended cases. For those refusing to cooperate, some ‘effective sanction’ must be available.

What could this mean for small claims?

Mr Justice Cotter, chair of the working party, said: “As the large majority of claims issued in the civil courts involve sums less than £10,000 the approach taken to the management and resolution of small claims is of critical importance.

“We believe that the recommendations in this report could reform the litigation experience for litigants in person with modest financial claims, who are by far the largest group of court users, maintain public confidence in the civil justice system and allow limited judicial and administrative resources to be properly focused.”

The rule committee will now consider all recommendations in the report.