Free small claims mediation, explained

HMCTS mediation has been mandatory for defended money claims up to £10,000 since 22 May 2024. The free 1-hour telephone service settles around 60-70% of cases.

What is small claims mediation?

The HMCTS Small Claims Mediation Service is a free, neutral service that helps parties in a defended small claims case reach a settlement before going to a hearing. A trained court mediator facilitates the negotiation — you never have to speak directly to the other party. The service is telephone-based and typically takes one to two hours total.

Since 22 May 2024, HMCTS automatically refers all eligible defended money claims up to £10,000 to the service after both parties have filed their Directions Questionnaires (form N180). Refusing to engage without a reasonable excuse can result in costs sanctions or, in extreme cases, the claim or defence being struck out.

HMCTS data consistently shows that around 60-70% of cases that go through the Small Claims Mediation Service reach a binding settlement. That is a dramatically better outcome ratio than the 50/50 coin-toss of a contested hearing, with no hearing day stress and weeks shaved off the timeline.

When mediation happens

After both parties file Directions Questionnaires (N180), the court allocates the claim to the small claims track and issues directions. Mediation is slotted in before the hearing date is fixed. HMCTS contacts both parties to agree a time slot for the mediation call — typically within 4-8 weeks of allocation.

If mediation does not settle the case, the hearing is then listed. Cases that fail mediation do not go back to the beginning — the court picks up from the directions already issued. There is no penalty for mediation not settling; it is genuinely without prejudice.

How the session works

The mediator telephones each party separately and goes between them — a process called "shuttle mediation". You never speak to the other side directly during the session. The mediator is a neutral civil servant trained in facilitative mediation; they do not make decisions or tell either party what they think the right outcome is.

The first call typically takes 20-30 minutes. The mediator hears your position, explores what you would accept to settle, and looks for areas of common ground. They then call the other party and do the same. This process repeats until a settlement emerges or the session ends without agreement.

The session is booked for one hour per party, but often runs longer. Clear your schedule for at least 2-3 hours. Stay near your phone and have your case notes and bank details to hand.

All discussions are without prejudice. Neither party can refer to anything said in the mediation at a subsequent hearing. The mediator keeps no record that is disclosed to the court. Speak openly.

• Write one paragraph summarising why you should win: what was agreed, what went wrong, what you lost.
• Decide your minimum acceptable settlement before the call and write it down. Do not reveal it immediately.
• Have two or three key documents to hand — contract, invoice, the key email.
• Be realistic about weak spots. If your evidence has gaps, a negotiated settlement may be a better outcome than a hearing.
• Have your bank details ready in case you reach agreement.

Settlement agreement — binding, saves hearing costs

When both parties agree terms, the mediator drafts a short settlement agreement setting out the amount, the payment date, and any other terms (for example, a signed receipt of goods, or confidentiality). Both parties confirm they agree. The agreement is legally binding as a contract.

If the defendant does not pay as agreed, you do not have to issue a new claim. You can return to the court that was managing the original case and ask for the settlement to be enforced as a court order, or issue a new claim for breach of the settlement agreement. Either way, you do not start from scratch.

A mediated settlement usually also dispenses with the court fee refund: if you settled before the hearing was held, check whether you are entitled to a partial fee refund under the HMCTS fee remission rules.

When mediation fails — back to the hearing

If the mediation session ends without agreement, HMCTS notifies the court and a hearing date is listed. Nothing from the mediation is disclosed to the judge — the mediator does not write a report, and the parties cannot use the mediation in their evidence.

The case then proceeds on the directions already issued. If you have more evidence to serve or witness statements to finalise, use the remaining time productively. Failed mediation sometimes sharpens both parties' understanding of the other's position, which can lead to an out-of-court settlement shortly before the hearing without any court involvement.

Should I engage fully?

Yes, almost always. Since 22 May 2024, HMCTS auto-refers defended small claims to mediation — refusing without a reasonable excuse can lead to costs sanctions or strike-out. Engaging seriously is also free, private, and cannot be referred to at trial if it fails.

• Free. No fee, no legal cost.
• Without prejudice — offers made in mediation cannot be used against you at a later hearing.
• Faster: settled cases close in weeks, not months.
• Less pressure than a hearing. No witnesses, no formal cross-examination.
• You control the outcome rather than leaving it to a judge with an hour to decide.

When mediation is NOT a good idea

• The defendant has flatly denied owing you anything and your case is strong.
• You want a public judgment for principle (for example a consumer rights case as a deterrent).
• The amount is so small that a partial settlement is not worth your time — you might as well take the day in court.
• The defendant is using mediation to delay (rare; the mediator will spot it).