Mandatory Mediation for Small Claims: What Changed and What It Means for You

On 22 May 2024, a significant change came into effect for small claims in England and Wales. Under updated Civil Procedure Rules, most defended small claims disputes valued at less than £10,000 are now automatically referred to mediation through the Small Claims Mediation Service (SCMS).

This means that before your case proceeds to a hearing, both you and the other side will be offered a free, one-hour mediation session conducted by a trained HMCTS mediator over the telephone.

This is the biggest change to the small claims process in years — and if you have a case going through the courts right now, it almost certainly affects you.

The mandatory mediation requirement applies to:

• Most defended small claims worth less than £10,000
• Claims filed through Money Claims Online (MCOL) and paper claims
• Cases where the defendant has filed a defence

Some categories are currently excluded:

• Claims involving personal injury
• Housing disrepair claims
• Cases where a party is a child or protected party
• Cases where there are related proceedings in another track

As of July 2025, HMCTS also launched a separate pilot for road traffic accident claims issued through the Online Civil Money Claims (OCMC) service — extending mandatory mediation further.

Here's what happens in practice:

1. Automatic referral: Once a defence is filed, the court automatically refers your case to the Small Claims Mediation Service. You don't need to opt in.
2. Contact within 28 days: A mediator will contact both parties to arrange a convenient time for the session.
3. One-hour telephone call: The mediation takes place over the phone. The mediator speaks to each party separately and together, trying to find common ground.
4. No obligation to settle: You must attend the mediation, but you are not required to reach an agreement. If mediation fails, your case proceeds to a hearing as normal.
5. It's free: The service is provided by HMCTS at no cost to either party.

The SCMS currently achieves a settlement rate of around 50% — meaning half of all cases referred to mediation are resolved without a hearing.

This is where it gets serious. While you cannot be forced to settle, unreasonable refusal to engage with mediation can have consequences:

• The court may take your refusal into account when deciding costs
• A judge may view refusal to mediate as unreasonable conduct
• In extreme cases, it could affect how the judge views your overall approach to the dispute

The key word is unreasonable. There are legitimate reasons to decline mediation — for example, if you've already made a reasonable settlement offer that was rejected, or if the other side has been dishonest. But simply refusing because you want your "day in court" is unlikely to be viewed favourably.

Our advice: Always engage with the mediation process. Even if you don't expect it to work, it demonstrates reasonableness to the court — and you might be surprised. Half of all cases settle at this stage.

Mediation is less formal than a court hearing, but preparation still matters. Here's what to do:

Before the Session

• Know your case inside out — review all documents, evidence, and correspondence
• Know your bottom line — decide the minimum amount you would accept in settlement
• Have your evidence organised — the mediator may ask you to explain key points
• Consider the other side's position — what are their strongest arguments? What might they offer?
• Be available — make sure you're somewhere quiet with good phone signal for the full hour

During the Session

• Be calm and factual — emotional arguments are less effective than evidence-based ones
• Listen to the mediator — they're experienced at finding common ground
• Be flexible — a settlement that's slightly less than you wanted is often better than the stress, cost, and uncertainty of a hearing
• Don't reveal your bottom line immediately — start with your ideal outcome and negotiate from there

If Mediation Succeeds

If you reach an agreement, the mediator will draw up a binding settlement agreement. Both parties sign it, and the case is closed. The agreement is legally enforceable — if the other side doesn't pay, you can enforce it through the court.

If Mediation Fails

Your case simply proceeds to a hearing as if mediation hadn't happened. Nothing you say in mediation can be used against you in court — it's all confidential. So there's genuinely nothing to lose.

Mandatory mediation adds a step to the process, but it doesn't necessarily make things slower:

Stage	Typical Timeline
Defence filed	Day 0
Mediation referral	Within 28 days
Mediation session	Within 4–6 weeks
If settled → case closed	Same day as mediation
If not settled → hearing listed	3–6 months from filing

If mediation works, you could have your money months earlier than waiting for a hearing. Even if it doesn't, the time spent in mediation doesn't significantly delay the hearing date.

Whether your case goes to mediation or a hearing, preparation is everything. CourtPilot helps you:

• Organise your evidence — AI analyses your documents and categorises them automatically
• Understand your position — get an honest assessment of your strengths and weaknesses
• Know your numbers — settlement calculator shows you realistic scenarios and ranges
• Prepare your arguments — AI identifies the key points a mediator or judge will focus on
• Generate court-ready documents — if mediation fails, your court bundle is already prepared

Going into mediation well-prepared doesn't just improve your chances of settling — it also shows the other side you're serious, which often leads to better offers.