Compulsory ADR – an update

Recent developments

The government has decided to go further than the CJC recommendation and has recently unveiled proposals for mediation to become compulsory for small claim cases with a value up to £10,000.  The threshold for compulsory mediation will be lower in personal injury and housing disrepair claims.

The Proposal

Under the proposals, the parties to a dispute would be automatically referred to a 1 hour telephone mediation session.  The mediation session will take place after a formal claim has been issued with the courts and before any hearing takes place.

The mediation will be conducted by a professional mediator provided by the court.

During the mediation session each party would have the opportunity of speaking to the mediator on a one to one basis.  The mediator will then explore whether there is any common ground between the parties and whether a resolution of the dispute can be agreed.  If a resolution can be found, the parties can agree over the phone for the resolution to be made legally binding through a settlement agreement.  If the parties enter into a settlement agreement this would bring the court proceedings to an end.

The court process will continue if no resolution can be agreed between the parties.

Proposed exemptions

The proposals suggest that consideration is being given to certain types of disputes being exempt from the compulsory mediation scheme and also the possibility that the parties can apply to a court for an exemption to the scheme.

We are waiting for the government to provide further details of these possible exemptions.

Comment

The government believes the proposals (if introduced) could divert an anticipated 20,000 cases from the court system, and free up an anticipated 7,000 judicial sitting days to be used for more complex cases.

For now, these are only proposals and the government consultation process will last 10 weeks. However, it does appear that it is only a matter of time before compulsory mediation is introduced.