Ministry of Justice Consultation Paper: Solving Disputes in the County Courts

The County Courts deal with disputes between parties relating to everything from unpaid debt, to consumer problems, personal injury claims and housing disagreements. As a result, the County Court sees an extremely high volume of claims come through its doors every year, some perhaps unnecessarily. A Consultation Paper, ‘Solving Disputes in the County Courts’ was commissioned in March 2011, to look into the problem of growing claims which incur take up valuable court time and result in needlessly high costs for the parties involved . The investigation of the Ministry of Justice found that 87,000 cases in the civil system settle before trial but after court allocation, suggesting that alternative means of dispute resolution could have been used by the parties, at a much lower cost.

The Consultation Paperproposes to expand dispute resolution, requiring parties with a claim beneath the small claims threshold to make an attempt at settlement through mediation and for claims above the threshold to attend mediation information centres, before they can look to the courts.Prior to this Paper, Lord Woolf’s Access to Justice Reports of 1995 and 1996 already heavily supported the use of alternative dispute resolution (ADR) in civil claims, urgingparties to consider ADR during case-management conferences and pre-trial reviews, and encouraging the courtsto take this into account when considering costs. Lord Woolf’s proposals were incorporated into the Civil Procedure Rules and it is now a pre-requisite that parties with a civil claim toconsider ADR before issuing a claim at court. A failure to do so can result in heavy cost sanctions for example, in the case of Dunnet v Railtrack (2002), the judiciary refused to award a successful party with costs because it had unreasonably refused to attempt mediation. The later case of Halsey v Milton Keynes NHS Trust (2004) confirmed that parties should routinely consider mediation before litigation to avoid cost sanctions.

This new Consultation Paper proposes to take the role of ADR in the civil claims system a step further by making it a compulsory step for small claims. It will not be sufficient for the parties to consider ADR, they must actually engage in it before they can proceed to court. The Paper also proposes to increase the threshold of small claims from £5,000 to somewhere between £15,000-£25,000 (except in housing and personal injury claims), catching a greater number of claims in the net that must have mandatory mediation before issuing a claim at court. In the County court, the proposals would make it mandatory for parties to attend mediation information centres before proceeding to litigation. The aim of these proposals is to decrease the volume of claims going through the courts, reduce the length of the claims process and minimise party costs. But are these objectives likely to be achieved?

There is a lot to be said for mediation. The process allows parties to reach a practical, flexible settlement that considers each party’s realistic needs. Control of the process stays with the parties, rather than having a decision imposed upon them both by a court. Furthermore, the process is extremely cost-effective when successful. An in-depth look at a mediation scheme rolled out in Central London County Courtled to the publication of two reports by Hazel Genn in 1998 and 2007. Gennfound that mediated cases settled significantly sooner than non-mediated cases at a lower cost. It also discovered that parties tended to stick to the agreed action after settlement, even though a mediation settlement is not binding on the parties. Mediation is also widely accepted as an effective settlement process in the arena of commercial disputes, helping parties to reach a practical solution that meets their commercial needs and allows parties to continue business relationship. It would seem that, providing two parties are open and willing to reach an agreement, ADR is a cheaper and more satisfying alternative to the court system. However, when parties are unwillingly forced into mediation, is the same result likely?

Hazel Genn’s studies also found that fewer agreements were reached between parties during mediation, when they were forcibly entered into the process in order to avoid costs sanctions. This would cast some doubt on the likely success of the Consultation Paper’s proposals; parties are more likely to end up turning to the courts at any rate if they do not willingly enter into the mediation process. Although mediation is significantly less expensive than the court system, failed mediation is actually going to inflate parties’ costs instead of cutting them. Failed mediation is also going to slow the claims process down rather than speeding it up, especially after an extensive effort has been made to reach an agreement. It is therefore possible to conclude that forcing parties into mediation may seek to go against the objectives of the Consultation Paper’s proposals, making the claims process longer, more expensive, and failing to significantly reduce the number of claims coming through the court doors.

If you would like to read the Consultation Paper discussed in this article, please click on the following link

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