Small Claims Mediation or County Court - What's the Quickest Way?

Q.

I am in severe financial difficulty with no job and my mortgage company heading towards repossession. I have made a claim through the county court against a bank in respect of unfair charges.

I have informed the bank of the FSA guidelines encouraging them to settle cases where the claimant is in financial difficulty. This advice is also mentioned on your web site.

The bank have lodged a defence and I have asked for an allocation questionaire to be completed to determine if the case should be dealt with by the small claims mediation sevice? Could you advise me what is quickest and more suitable?

A.

The small claims court is supposed to be a quick and simple way to recover money, and from lodging proceedings to final outcome should only be about three months. This may sound like a long time, but in litigation it’s actually very quick. If you’ve been offered the mediation service this is likely to be quicker. Bear in mind that you have to agree to mediation and so does the bank. If one of you does not agree to go to mediation, the claim will continue as normal.

What is Mediation For?

Mediation is intended to allow both parties to a contested case to reach a settlement. Therefore, it is vital that you approach the meeting with a degree of flexibility. The bank will obviously be trying to get you to accept as little as possible by way of settlement, and if you are in financial difficulties you may take the view that some money now is better than none, or that you can’t wait for the case to be heard.

Be Assertive But Flexible

A mediation appointment is made that is convenient for both parties, and is usually conducted by telephone. Although there are undoubtedly successful outcomes to small claims mediation, bear in mind the fact that settlement is undoubtedly cheaper for the bank. Be prepared to be flexible, but remember that it will cost them money in legal fees to send a barrister or solicitor along to defend the claim. Newly qualified barristers usually get paid about £400 for defending these hearings, so it’s not exactly cheap. Then there are the administrative costs in preparing the claim for hearing – that will take up their staff’s time, and incur extra costs like photocopying etc.

If You Don't Settle the Claim

If your mediation appointment does not result in a settlement, the case will be listed for small claims hearing. The district judge will not know what happened during the mediation appointment as it’s confidential. However, you will have to pay the court fee for the hearing – the level of which will depend on the value of your claim. Details can be found on the HMCourts Service website (www.hmcourts-service.gov/uk)

What I’m essentially saying is that mediation can be quicker than waiting for your hearing to be listed, but you may accept less money by way of settlement than the amount you’ve claimed.