Why you have to consider mediation
Mediation is a buzzword in legal circles. You might think it only applies to squabbling couples heading for a divorce, but it can be a flexible, fast and cost-effective means for businesses to resolve disputes.
Making a court claim for money owed can be known as taking someone to the “small claims court”. But you might not have to appear before a judge to prove your claim.
“Courts should be the last resort for people involved in civil or family disputes,” says the Ministry of Justice on its website.
So there’s an increasing emphasis on less confrontational ways of providing justice. If the other party agrees, mediation can settle the dispute. This is when an impartial person helps two sides work out an agreement.
A mediator can be chosen from a list of accredited providers working in your county. The fee for this service will depend on the total of the claim and any counter-claim and the expected time needed for agreement to be reached.
The Civil Mediation Council says: “Once a settlement has been reached a mediation agreement can be drawn up. Parties tend to keep to the mediation agreement because they have prepared the terms themselves.”
If you do decide to take your case to the County Court, the civil court that deals with small claims, and the defendant files an acknowledgement of service, they have 28 days to file a defence. However if they do not file the acknowledgment of service, the claimant can enter judgment in default after 14 days, as stated on the notice of issue.
If they deny owing you the money, dispute the amount or you cannot agree how the money will be repaid, you may go to a court hearing. But the court will expect you to have made efforts to resolve the dispute, or you may not get back all your costs.
At this point, and again only if both parties agree, there is another opportunity to go to mediation.
If the claim is for less than £10,000 the court’s small claims mediation service can help. Each court handling small claims cases has a mediation officer. Mediation is free once you have paid your court application fee. This fee is based on the size of the claim, plus interest, and is cheaper if you submit the application online.
The £10,000 figure doubled from £5,000 on April 1 this year in England and Wales. In 1973, when the small claims procedure was established, it was set as £75. The limit remains £3,000 in Scotland and Northern Ireland where there are other legal differences.
Within weeks the chosen mediator will call both parties to meet face-to-face, or with one party on the phone. It might be that more time is needed to arrange a settlement, but only if the mediation attempt fails will a full court hearing of the issues go ahead. Details of what went on in the mediation cannot be disclosed or used in court.
At SJ Collections we can guide you through the unfamiliar process of claiming money by following the small claims track, from preparing for mediation to the day of a court hearing. Find out more at www.debt-collections.co.uk.