The Mediation Revolution: Accessing Justice During the ‘Cost of Living’ Crisis

In an era defined by economic strain, the traditional "day in court" is rapidly being

replaced by more agile, cost-effective alternatives. For UK businesses and

individuals, civil and commercial mediation has moved from a voluntary "extra" to a

central pillar of the justice system.

A New Legal Mandate: From Voluntary to Compulsory

The legal landscape for mediation in England and Wales underwent a seismic shift in

2024 following the landmark Court of Appeal ruling in Churchill v Merthyr Tydfil

CBC [2023].

• Judicial Power to Compel: Courts now have the authority to stay

proceedings and order parties to engage in non-court dispute resolution

(NCDR), such as mediation, even if one party objects.

• Small Claims Integration: As of 22 May 2024, automatic referral to

mediation is mandatory for most civil money claims under £10,000.

• Online Civil Money Claims (OCMC): This requirement was extended to

claims issued through the Online Civil Money Claims portal in late 2024 and is

currently piloted until at least April 2027.

• Civil Procedure Rules (CPR) Updates: Effective 1 October 2024, the

"overriding objective" of the Civil Procedure Rules was amended to explicitly

require judges to promote and facilitate ADR.

Navigating the Cost of Living Crisis

The ongoing cost of living crisis has made the financial burden of litigation—often

exceeding £20,000 for a full hearing—unsustainable for many. Mediation offers a

critical "safety valve" for those struggling with rising costs:

• Drastic Cost Savings: Mediation typically costs a fraction of a trial. Private

commercial sessions may cost between £4,000 and £5,000 for complex

cases, while the court-run Small Claims Mediation Service is free of charge.

• Preserving Liquidity: Faster resolutions (often achieved in a single day)

prevent capital from being "trapped" in multi-year legal battles.

• Digital Accessibility: Over 50% of mediations now take place online via

platforms like Zoom or Microsoft Teams, eliminating travel and venue

expenses.

Sanctions for Unreasonableness

Ignoring the shift toward mediation carries heavy risks. Under the updated CPR,

parties who "unreasonably" refuse to participate in ADR or fail to engage in good

faith may face severe sanctions:

• Adverse Cost Orders: Even if you win your case at trial, the judge may order

you to pay the opponent’s legal fees if you previously refused a reasonable

invitation to mediate.

• Strike-Outs: In extreme cases of non-compliance with court-ordered

mediation, a judge can strike out a party's claim or defence entirely.

• For disputes above the £10,000 small claims threshold, parties must typically

appoint an external professional. It is recommended to use accredited

providers to ensure standards are met.