Further to our write-up in July 2023, a new Practice Direction 51ZE has come into force, which will mean thousands of cases are automatically referred to the Small Claims Mediation Service ('SCMS'). The change is brought about via PD 51ZE modifying the existing CPR r.26.6 for claims which fall within the ambit of the pilot.

For money claims issued on or after 22 May 2024 which would ordinarily be allocated to the Small Claims Track and do not involve personal injury, or arise from a road traffic accident, there will be an automatic referral to the SCMS once the parties have filed their directions questionnaires.

The SCMS will provide a free, 1-hour appointment for both parties to attempt settlement without the need to proceed to a final hearing of the case. Usually that appointment is expected to take place within 28 days of the referral. The number of employed mediators within the SCMS has increased from 25 to 64 with the aim of meeting the increased demand.

The pilot does not apply to claims issued via Online Civil Money Claims.

According to the Ministry of Justice, 5,000 Judicial sitting days per year could be freed-up and made available for other Court business.

Notably, the Court's powers as regards sanctions and costs on the Small Claims Track are expanded, including with a new CPR r.27.14(2A) - this new provision permits the Court to take into account any failure by a party to attend mediation provided by the Mediation Service under rule 26.6.

At a final hearing, pursuant to CPR r.27.8(7) and r.26.6(6), the Court must also consider whether any sanction is appropriate in all the circumstances having regard to whether the parties attended mediation provided by the Mediation Service. This is a strong indication that attendance at mediation appointments is encouraged, and the Court will take a dim view of non-attendance, potentially sanctioning the non-attending party, whether via a costs Order or otherwise (the Rules stating, 'any sanction').

LPC Law offers advocates who attend Small Claims Mediation appointments. Please contact us to discuss your requirements.

The pilot is scheduled to run until 21 May 2026, with the aim of achieving 'tens of thousands' of successful out-of-court resolutions.