Mediation and ADR – how can they help you?
On 25th July 2023, a significant change to the litigation process was confirmed with the Ministry of Justice announcing that they will be introducing the requirement for mediation in all cases issued in the small claims track (in effect, monetary claims with a value of £10,000 or less). Failure to mediate runs the risk of sanctions (which can include costs sanctions or other restrictions) being imposed on the party who refuses.
This change has come about as an effort to clear the huge backlog of cases in the Court service and to reserve Judges’ time for more complex matters. The move certainly has its critics and proponents within the legal industry, but this article seeks to explore mediation and how it might help you.
What kind of problems are suitable for mediation?
- Divorces
- Family disputes
- Landlord and Tenant disputes
- IP disputes
- Contentious probate
- Personal injury
- Property disputes
In fact, most types of civil and commercial disputes are suitable for mediation. Our litigation department at LFBB encourages mediation for most of their cases – it is a much cheaper option than going to Court.
What is mediation?
Mediators are specialised, impartial third parties – they will listen to both sides of the case and act as a go-between, helping the parties to negotiate their way to a compromise. It’s unusual for mediation to last more than a day, but that does not mean that it cannot. Sometimes parties will stay late to get the job done or return for a further session if agreement cannot be reached in one day.
In the small claims mediation service, each side gets a 1-hour telephone call with the mediator. However, there are mediation firms that can be involved in other cases too. After making contact to ensure both sides are willing to mediate, you would have an initial meeting (sometimes referred to as a MIAM) in which the mediator would assess your and your case’s suitability for mediation. At the mediation itself, the mediator would listen to and negotiate with both parties to try to iron out a compromise. If it is appropriate , neither side would have to see the other, and nobody can be forced by a mediator into reaching a settlement.
Mediation is a much more flexible way of settling a matter than by going to Court – the parties decide what happens, rather than a Judge, and everything is confidential. Court is not ruled out by trying mediation though – even the new rules enforcing mediation for small claims recognise that mediation doesn’t work for every case.
How much does mediation cost?
If your claim is caught by the new small-claims rules mentioned above, there will be no charge.
If your claim falls between £10,000 – £50,000 there is a fixed fee scheme that some mediators have signed up to. The maximum fee shown is £445 plus VAT for a £50,000 claim taking 4 hours to mediate. Considering it would cost £2,500 just to issue a Court claim for a debt of £50,000, you can see why LFBB recommend trying mediation as early on in a case as possible. We frequently warn clients that cases could easily clock up many tens of thousands of pounds to see the case through Court to the final hearing.
What other options are there?
Aside from mediation and Court proceedings, other forms of dispute resolution include negotiation (where the parties and their representatives have a meeting to iron out an agreement), conciliation (similar to mediation but the Conciliator provides more guidance) and arbitration (where the dispute is considered and resolved by a third party arbitrator). In order of least to most formal, and most to least party autonomy, it goes –
Negotiation – Mediation – Conciliation – Arbitration – Court
Some cases will be more suited to one type of dispute resolution, and others to a different one – if you have a problem that is bothering you, but you are put off by the cost or stress of Court proceedings, please speak to our litigation team on 0114 272 9721