UK government proposes mandatory mediation in small claims and consults on increased regulation of the mediation industry

The Ministry of Justice (MoJ) has launched a public consultation on Increasing the use of mediation in the civil justice system.

It has also given an indication that the government intends for the UK to sign and ratify the Singapore Convention on Mediated Settlements.

The consultation issues

The consultation document seeks views on two distinct issues:

  1. A government proposal to introduce mandatory mediation for all defended Small Claims in the County Court (ie most claims valued below £10,000). Under the proposal, all parties in such actions will be required to participate in a free one hour telephone mediation (not just an information session about mediation) conducted by mediators within HMCTS –  under expansion of the Small Claims Mediation Service (which is currently voluntary).
    It appears to assume that the proposal will proceed, with the consultation focusing on possible exemptions (by case category and/or on a case-by-case basis), sanctions for non-compliance, and how the court should assess whether a party has engaged adequately with the mediation process.
  2. In anticipation of extending mandatory mediation to other County Court claims and beyond, involving use of the private mediation sector, views are sought on whether there is a need for increased regulation and oversight of the mediation industry, such as through accreditation of mediators, formalising standards of conduct and/or establishment of an industry regulator.

The proposal for mandatory mediation of Small Claims, although modest in terms of what it demands of parties, is significant as the first instance of compulsory mediation being made a permanent feature of an entire area of the English courts. Of course, such reform has been clearly foreshadowed over the past year, since the Civil Justice Council’s groundbreaking July 2021 report endorsing compulsory ADR in principle, which has been fully embraced by both the MoJ and the senior judiciary (as noted here).

The current consultation also sits alongside a parallel workstream being pursued by the Department of Business, Energy and Industrial Strategy (BEIS) regarding ADR of consumer disputes outside the court system (such as through Ombudsmen and other ADR schemes). As we recently reported, it is examining the role of compulsion in such schemes as well as introducing measures to strengthen the accreditation framework for consumer ADR providers.

The current MoJ consultation closes on 4 October 2022.

Singapore Convention

Although not the subject of the consultation, the Singapore Convention is mentioned briefly in a section referring to other government initiatives to promote mediation. It notes that these include

“.. proposing to support UK’s intention to ratify the UN Convention on International Settlement Agreements (the “Singapore Convention on Mediation”)“.

It is not clear whether this should be read as confirmation that the government has made its decision on whether to sign the Convention, and we still expect a more formal announcement in that regard following its consultation on that specific question earlier this year. However, the above reference supports the current widespread expectation that it will do so.

For a discussion of the practical impacts of the Singapore Convention for mediating parties, see our earlier posts collected here.

Jan O'Neill
Jan O'Neill
Professional Support Lawyer, London
+44 20 7466 2202

UK government announces reforms to consumer ADR services

The UK government recently published a report announcing a wide range of far-reaching changes to the UK competition and consumer protection regulatory regimes, following a consultation last year.

The key reforms are examined on our Competition Notes blog, here.  Below, we highlight a less prominent aspect of the report, regarding the role of ADR services in consumer markets.

Under the banner of “supporting consumers to enforce their rights independently”, the report addresses the following  issues.

  • Consumer awareness:  The report recognises that the landscape of consumer ADR services is decentralised, complex and difficult to understand, with multiple schemes in some sectors and none in others.  Although noting that consultation responses advocated the creation of a single entry and signposting point, the report does not announce any specific proposals in this regard. Rather, it will continue to work with relevant stakeholders “to help promote ADR and ensure ease of access”.
  • Business response times:  The report notes that in regulated markets, most regulators have typically set an informal upper limit of eight weeks for businesses to resolve complaints before consumers are entitled to take a dispute to ADR.  The consultation process indicated support for reducing the standard response time to four weeks, although some concerns were expressed that in some sectors this could prevent traders from properly investigating claims and place additional burdens on business.  The government has decided against imposing a standardised four week response time but will continue to to explore the case for reducing the current informal upper limit while ensuring appropriate safeguards for complex cases.
  • Quality and oversight of ADR services:   In the consultation, the  government  signalled its intention to improve the quality and consistency of consumer ADR services, to increase business and consumer confidence in ADR.  In a significant announcement, the report confirms that it intends to:
    • require “all businesses that offer dispute resolution services in consumer markets” to be approved under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015; and
    • strengthen the existing accreditation framework to ensure a common set of standards are applied and that providers can be held accountable.

‘Consumer ADR’ is usually understood as referring to the services provided by dispute resolution bodies set up specifically to deal with consumer/trader disputes, such as Ombudsmen and  trade association schemes.  It is currently not clear to what extent the new approval requirement could extend to individual mediators/neutrals or small independent ADR bodies which do not operate within any particular consumer sector but are available to deal with disputes that could be categorised as consumer disputes.

  • Improving business take-up of ADR in non-regulated markets:   The consultation recognised that, while in the regulated consumer sectors it is generally mandatory for traders to participate in ADR schemes, in sectors where participation is voluntary there is little engagement by business particularly amongst SMEs.  Although the report notes strong support for it in the consultation responses, the government appears to be not proceeding with a proposal that business participation in ADR should be made mandatory in the motor vehicles and home improvements sectors.  The report’s conclusion with respect to improving business take-up is limited to supporting the Ministry of Justice’s ongoing wider policy review of the role of ADR in civil disputes generally.

 

Jan O'Neill
Jan O'Neill
Professional Support Lawyer, London
+44 20 7466 2202

 

 

Herbert Smith Freehills to host event on improving standards in mediation advocacy

On Thursday 6 December at 6pm, Herbert Smith Freehills’ London office will host an event organised by the Standing Conference of Mediation Advocates (SCMA), a cross-professional association  established to deliver professional excellence in mediation advocacy.  Nicholas Green QC, Edwin Glasgow QC, HH Judge Bartle QC, Michael Leathes (International Mediation Institute (IMI)), Alexander Oddy (Herbert Smith Freehills LLP) and Katie Bradford (Linklaters LLP) will tackle the subject of improving standards in mediation advocacy, through the possibility of accreditation, training and recognition.  The event will inform the SCMA’s response to the consultation paper of the IMI’s task force on mediation advocacy.

This event should be of interest to anyone involved in commercial mediation, and particularly those representing clients at mediations. To register, please email the SCMA’s convener, Andrew Goodman of 1 Chancery Lane, London WC2A 1LF  at agoodman@1chancerylane.com.

 

Massachusetts Supreme Judicial Court rules on whether mediation requires mediators to be lawyers

In re Bott, 2012 WL 1970456, Docket No. SJC-10935 (5 June 2012) the Massachusetts Supreme Judicial Court held that mediation as a general matter does not constitute the practice of law and therefore practising mediators need not be lawyers. However, the court ruled that it will still regulate disbarred, suspended, and disciplined ex-lawyers who want to act as neutrals.  Continue reading

German mediation law comes into force

The German mediation bill has long been a source of debate and disagreement between the German Parliament’s two chambers. Indeed, disagreement over the terms of the bill was referred to mediation deploying provisions under the German Constitution providing for resolution by mediation of disputes between the two chambers.  As a result of a successful mediation,  the bill was signed by the President of the Federal Republic on 21 July,  published in the Federal Gazette, and came into law on 26 July 2012. Continue reading

Mediation Ordinance enacted in Hong Kong giving effect to earlier Mediation Bill

On 22 June 2012, the Mediation Ordinance (the Ordinance) was enacted in Hong Kong.  It will come into force when the Secretary for Justice publishes a notice. The Ordinance creates a basic statutory framework for mediation in Hong Kong and will apply retrospectively to any mediation conducted in Hong Kong or to mediation agreements which provide that the Mediation Ordinance or Hong Kong law applies, other than specific conciliations or mediations which arise under other legislation identified in Schedule 1 of the Ordinance.

The Ordinance covers the definition of mediation and the scope of confidentiality of mediation communications.

Also in the pipeline this year is the establishment of the Hong Kong Mediation Accreditation Association Limited (HKMAAL) which should become the sole accreditation body for mediators and the default appointing body where parties cannot agree on the appointment of a mediator.

Heather Gething becomes latest Herbert Smith accredited mediator

Heather Gething, head of the firm’s tax disputes practice, has recently become a CEDR accredited mediator. This brings the total number of accredited mediators in our London office to 13, demonstrating our experience in and commitment to ADR:

  • Simon Clarke
  • Julian Copeman
  • John Farr
  • Ian Gatt QC
  • Heather Gething
  • Robert Hunter
  • Adam Johnson
  • Gary Milner-Moore
  • Alexander Oddy
  • Charles Plant
  • David Phillips
  • Murray Rosen QC
  • Rupert Shiers

Herbert Smith gains two new CEDR-accredited mediators

Gary Milner-Moore and Rupert Shiers, both partners in the Dispute Resolution division, have just become CEDR-accredited mediators.

Rupert, who is a partner in the firm’s tax disputes practice, undertook the CEDR training in a course specially arranged by CEDR and HMRC for tax disputes experts. Rupert is part of a joint public/private sector HMRC working group that meets regularly to discuss progress and developments in ADR in the context of tax disputes.

Herbert Smith gains another accredited mediator

In January 2011, David Phillips, a senior associate at Herbert Smith, became a CEDR accredited mediator. David has advised clients on a number of mediations, notably in the energy sector, usually in respect of international disputes and often involving multiple parties.

International Mediation Institute – new mediator certification procedures

The International Mediation Institute (IMI) was launched in 2007 in the Hague as an international public policy initiative to provide international mediator standards and training. Its stated goal is to generate enhanced confidence in mediators by way of recognised mediator standards in an otherwise unregulated profession. Qualifying mediators are registered with IMI and IMI certified mediators are openly searchable via the IMI website.

IMI recently concluded its Experience Qualification Path to IMI certification. This was aimed at experienced mediators whereby certification could be achieved without undergoing a separate process. From 1 October 2009 new applicants can be IMI certified by a mediation provider, trainer or professional organisation implementing a programme approved by IMI’s Independent Standards Commission (ISC).