Spiralling court fees and changing practices are increasingly favouring mediation as a means of settling commercial disputes. Andrew Hornsby of Hegarty Solicitors gives us the lowdown
No-one likes going to court to settle disputes and with rising court fees this means of reaching a resolution is now even less popular! Court fees to issue proceedings for the recovery of money on claims worth £10,000 or more increased from April 2015 as much as six-fold! Fee bands were replaced by a flat fee comprising 5% of the total value of the claim. This means that the fee for a dispute worth £90,000 has surged from £910 in 2014 to £4,500, while the court fees for a £200,000 claim leapt from £1,720 to £10,000! This surge in fees is matched by the associated risk of failing to recover those costs should the litigation prove unsuccessful, the increasing prospect of an increase in the small claims limit purportedly to £25,000 and the potential introduction of online courts.
Thankfully there’s an alternative to court action. Mediation offers a cheaper alternative to the courts, allowing both parties to reach a settlement before litigation becomes necessary. The earlier the mediation process can begin, the more cost effective it is likely to be thanks to the savings on mounting legal costs. Mediation needn’t be a scary process. Ordinarily a mediator is appointed by a solicitor. The mediator must be free of any conflicts of interests so as to allow a completely neutral standpoint. Evidence is usually presented in the form of a mediation bundle, the name given to all the documents relating to the dispute and on which the mediation will be based. The mediator will then talk to both parties in the dispute, serving as a sounding board between the two and brokering a realistic solution. Once a solution is reached a settlement agreement is drawn up and signed by both parties. This legally binding document sets out the terms of the agreement and can be used as evidence in the event that one party attempts to renege on what’s been agreed.
First things first
Courts are increasingly expecting parties to at least attempt to settle through a mediator before litigation proceeds. In many cases the court will look at whether or not the party issuing the claim has been offered mediation. If mediation has been offered the party bringing the court action find that the court costs they have borne will be discounted or completely removed from the defendant’s costs if the court interprets their refusal of mediation as being unreasonable. In some circumstances court may even rule that the claimant the defendant’s costs! Mediation isn’t a cheaper alternative therefore; it is increasingly becoming a necessity if criticism unexpected costs are to be avoided. Mediation is not obligatory and either party can walk away from the process whenever they please. But in order to attempt settlement it is worth seeing the mediation process through to the finish. In most cases both parties will find it a more cost-effective, potentially manageable and certainly less stressful alternative to going to court.
If you would like to find out more about mediation then get in touch with Hegarty Solicitors, who can talk you through the process without obligation and at no cost. Andrew can be contacted at the Peterborough branch by calling 01733 295635 or via email