Small Claims Mediation Service

Most defended small claims are now automatically referred to a free, one-hour mediation call before they reach a hearing. Here is what actually happens on that call, and what it costs you if you skip it.

Is mediation really compulsory for small claims?

Since 22 May 2024, most money claims allocated to the small claims track are automatically referred to the Small Claims Mediation Service once directions questionnaires have been filed by both sides. The referral itself is automatic — you do not need to request it — though the pilot scheme excludes road traffic accident and personal injury claims. The pilot has been extended and is currently running until 6 April 2027.

Does it cost anything to use the Small Claims Mediation Service?

No. The appointment is free of charge to both parties and is included as part of the standard small claims process — there is no separate mediation fee on top of the court fee you already paid to issue or defend the claim.

What happens if we don't reach an agreement?

Nothing is lost. If mediation does not resolve the dispute, the claim simply continues towards a small claims hearing in front of a judge, exactly as it would have done anyway. Nothing said during the mediation call can be used as evidence at that hearing.

Can I refuse to take part in mediation?

You can decline the appointment, but doing so without good reason carries risk. Courts have shown a willingness to penalise unreasonable refusal to engage with mediation in costs — an exception to the general rule that costs are not recoverable in the small claims track — and in some circumstances a claim or defence can be struck out for non-engagement.

Is anything I say in mediation confidential?

Yes. The mediation call is conducted on a without prejudice and confidential basis. The mediator will not report the detail of what either side said to the judge who may later hear the case, only whether or not a settlement was reached.

Can I bring someone to help me on the mediation call?

Yes, you can have a McKenzie friend, family member or adviser with you while you take the call, provided they are simply supporting you rather than acting as an advocate. The mediator will still expect to hear directly from you as the party to the claim.

Small Claims Mediation Service

Small Claims · Glossary

Small Claims Mediation Service

Last reviewed: July 2026

Small Claims Mediation Service

is a free service run by HM Courts & Tribunals Service that offers parties in a defended small claim a one-hour telephone appointment with a trained court mediator, aiming to settle the dispute without the need for a hearing.

Where this comes from

Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416

— Court of Appeal confirmed courts can order or stay proceedings for parties to engage in alternative dispute resolution.

Practice Direction 51ZE

— Small Claims Track Automatic Referral to Mediation Pilot Scheme, live since 22 May 2024 and currently extended to 6 April 2027.

— the overriding objective now expressly includes promoting or using alternative dispute resolution.

What actually happens on the call

Once both sides have filed their directions questionnaires in a defended small claim, the claim is automatically referred to the Small Claims Mediation Service — you do not need to apply or opt in. The scheme applies to money claims allocated to the small claims track, but excludes road traffic accident and personal injury claims. A trained, court-employed mediator, entirely separate from the judge who might later hear the case, contacts each side and holds a one-hour telephone appointment, usually speaking to each party separately to explore what a fair settlement might look like.

The appointment is free, confidential and without prejudice: nothing either side says can later be used as evidence at a hearing, and the mediator does not report back to the judge on the substance of the discussion — only on whether the case settled. If an agreement is reached, it is usually recorded in a consent order and the claim ends there. If not, the claim proceeds to a small claims hearing exactly as it would have done regardless.

Is it really compulsory, and what if you refuse?

The referral itself is automatic, which is why the scheme is often described as compulsory mediation. You are not, in the strictest sense, forced to settle — the mediator cannot impose an outcome, and you remain free to reject any proposal and proceed to a hearing. What has changed since the Court of Appeal's decision in

is that courts now have clear authority to penalise a party who unreasonably refuses to engage with the process at all. In the small claims track, where costs are not normally recoverable even by the winning side, unreasonable non-engagement with mediation is one of the few situations where a costs order, or in serious cases a strike out, can still follow.

How it works in practice

A tenant issues a small claim for £800 against a former landlord who withheld the full tenancy deposit, citing cleaning costs the tenant disputes. The landlord defends the claim, and once directions questionnaires are filed, both sides are automatically referred to the Small Claims Mediation Service.

On the call, the mediator explores each side's position separately. The tenant accepts that some cleaning was reasonably needed but disputes the full amount claimed; the landlord, faced with limited supporting invoices, agrees to a reduced figure to avoid the time and uncertainty of a hearing.

Deposit originally withheld

Agreed cleaning deduction

Settlement paid to tenant

The agreement is recorded in a consent order and the claim is discontinued. The tenant recovers most of the disputed deposit within days rather than waiting months for a hearing date.

Common misconceptions

• “Mediation means I have to accept whatever is offered.”
• You are never obliged to accept a figure you consider unfair. If no agreement is reached, the claim simply continues to a hearing.
• “Agreeing to mediate looks like I have a weak case.”
• Referral is automatic for almost every defended small claim — it says nothing about the strength of either side's position.
• “Whatever I say in mediation can be used against me later.”
• The call is confidential and without prejudice. The judge who may later hear the case will not be told what either party said during it.
• “There's no downside to ignoring the mediation appointment.”
• Refusing to engage without good reason is one of the narrow situations where a costs penalty, or even strike out, can apply in the small claims track.

What the mediator can and can't do

The mediator's role is to help both sides find common ground, not to decide who is right. They will not tell you whether your claim is likely to succeed at a hearing, and they cannot give either party legal advice on the merits of the case. What they can do is test each side's position, point out practical considerations — the time, stress and uncertainty of a hearing, for instance — and float figures or terms that might bridge the gap between what is being claimed and what is being offered.

This matters because some parties go into the call expecting the mediator to act like a judge and give an early view on who would win. That is not the service being offered. If you want an assessment of the strength of your case before the call, that preparation needs to happen beforehand — organising your evidence, working out your realistic bottom line, and being clear on what outcome you would actually accept.

It is also worth knowing that the mediator usually speaks to each side separately, often by shuttling between two calls rather than putting both parties on the line together. This is deliberate: it tends to reduce confrontation and allows people to speak more freely about what they would actually settle for than they might in a joint conversation with the other side listening.

Frequently asked questions

Sources & further reading

• Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416
• — full judgment (BAILII)
• Practice Direction 51ZE
• — mediation pilot scheme (justice.gov.uk)
• Small Claims Mediation Service guidance
• Civil Procedure Rules, Part 1
• — overriding objective (justice.gov.uk)

Heading into a small claims mediation call?

Start My Claim helps you organise your evidence and know your bottom line before you pick up the phone.

Last reviewed: July 2026.

References checked against Practice Direction 51ZE as extended and in force on 6 July 2026.

This page is explanatory only and is not legal advice. Start My Claim is self-service software, not a law firm — its tools help you build and run your own case.