Since May 2024 all claims under £10,000 issued through Money Claim Online, Secure Data Transfer, or on paper have been automatically referred to Small Claims Mediation. This is a pilot scheme under Practice Direction 51ZE and runs until May 2026.
Instead of the parties being asked whether they would be willing to settle the dispute through mediation ahead of a trial, the parties are not given the option, and non-attendance can now amount to “unreasonable behaviour” with the potential for sanctions.
The N180 Directions Questionnaire (DQ) now states:
“As part of your case, HMCTS will provide a free, confidential Small Claims Mediation Service. For all money claims for £10,000 or less parties are required to attend a mediation appointment organised by the Small Claims Mediation Service.
If you do not attend mediation, you may be subject to penalties. These could include the Judge automatically ruling in favour of the other party(ies).
If the claim is settled at this stage the parties can avoid further court fees, costs and time involved in preparing and attending a hearing. If you are unable to reach agreement with the other party at mediation, the claim will proceed to a small claims hearing.”
There has been a noticeable uptick in my cases that have settled at mediation over the last couple of months. Whilst the new rule is not a requirement to settle at mediation, it is a requirement to attend mediation, and it seems that settlements through the service are increasing.
Based on this admittedly unscientific observation, I predict HMCTS (HM Courts and Tribunal Service) will announce the scheme as a success by May 2026, and it will continue as a mandatory requirement thereafter.
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