2010 Small claims mediation service

This page contains an outline of this report, and a summary of the key findings. Details of how to find the full report and the research report on which it is based can be found at the bottom of the page.
 
Title
Small claims, big claims - Consumers’ perceptions of the small claims process
 
What is it about?
Based on desk research and original research with consumers, the report offers an assessment of whether the small claims process in England and Wales delivers against the objectives set for it. These are taken to be:

• to provide a way in which relatively straightforward, low-value disputes can be dealt with in an accessible and user-friendly way, quickly and at proportionate cost; and
• to empower consumers to pursue redress in a cost-efficient manner (emphasis supplied).

This review focuses on findings regarding satisfaction with Her Majesty’s Courts Service (HMCS) Small Claims Mediation Service, which offers an alternative method of resolving disputes, and has been available free of charge to parties to defended small claims in all county courts in England and Wales since 2008. There is more information about the service on this site at Small claims mediation.
 
Who did it?
The report was written and published by Consumer Focus, the statutory consumer champion for England, Wales, Scotland and (for postal consumers) Northern Ireland.
 
Original research findings presented in the report are derived from a study commissioned by Consumer Focus and conducted by IFF Research.
 
About the research
IFF Research conducted qualitative interviews with 20 individual consumers and an online survey of 1,000 individual consumers. Although not explicitly stated, it seems that those taking part would have been reporting on their experiences of disputes in a personal capacity rather than, for example, in a business capacity as sole traders.
 
A total of 503 respondents to the online survey had been through a small claims mediation (326 claimants and 177 defendants). Eight of the claimants and three of the defendants who took part in qualitative interviews had been through mediation.
 
The research was conducted between February and April 2010. Consumers were asked about their involvement in cases during the previous three years, therefore the data may relate to cases in progress from early 2007 onwards.
 
It is not clear how representative survey participants were of all consumers involved in small claims, or of those using the small claims mediation service; they were recruited via an online panel, thus it seems limiting participation to those with internet access. In addition, substantial majorities (69% of claimants and 68% of defendants) were reported to have either obtained a favourable outcome via mediation, or won their case a court hearing.
 
The survey sample was structured to include respondents who had and had not taken part in mediation, and those who did and did not achieve a settlement as a result. Therefore, the study does not offer estimates for the proportions of parties to small claims who made use of the mediation service, or of cases which settled.
 
Key findings

• Overall satisfaction with the mediation process was high – but no higher, it seems, than with small claims hearings.
• Levels of satisfaction with specific aspects of the mediation process were more varied (and with regard to convenience of arrangements, were low).
• Most respondents for whom mediation produced a settlement, reported that the outcome was fair. However, strong belief in the fairness of mediated outcomes appeared lower than for outcomes of small claims hearings.
• Mediated settlements appeared more likely to result in full payment than determinations at small claims hearings. But it is not clear whether payment was any more likely to be received without the need for enforcement action.
• On the whole, claimants appeared more likely than defendants to express satisfaction with both mediation and small claims hearings.

Overall satisfaction

• 85% of claimants and 83% of defendants whose cases were mediated said that they were satisfied with the process.
• Similarly, 88% of claimants and 77% of defendants whose cases were determined at a small claims hearing, said that they were satisfied with how the hearing was handled.
• Respondents whose cases were mediated appeared no more likely to be ‘very satisfied’ with the process (37% of claimants and 34% of defendants) than those whose cases were determined at a small claims hearing (of whom 45% of claimants and 30% of defendants were ‘very satisfied’).

Satisfaction with specific aspects of the process
When offered a choice of ratings (‘good’, ‘neutral or mixed’ or ‘poor’), the percentages rating specific aspects of the mediation process as ‘good’ were:

• skill of the mediator: 71% of claimants and 67% of defendants;
• clarity of information about how the mediation would work: 71% of claimants and 58% of defendants;
• convenience of arrangements for the mediation: 58% of claimants and 49% of defendants.

Again, these ratings appeared no more favourable than for small claims hearings. Among those who actually attended a hearing, 70% of claimants and 55% of defendants rated the clarity of information they were given as ‘good’; 63% of claimants and 49% of defendants rated the convenience of arrangements as ‘good’.
 
Fairness of outcomes

• 97% of claimants and 93% of defendants whose cases were resolved via mediation, reported that the outcome was fair.
• Similarly, 94% of claimants and 87% of defendants whose cases were determined at a small claims hearing said that the outcome was fair.
• However, respondents whose cases had been resolved via mediation appeared somewhat less likely to say that the outcome was ‘very fair’ (51% of claimants and 32% of defendants) compared with those whose cases were determined at a small claims hearing (of whom 67% of claimants and 44% of defendants said the outcome was ‘very fair’).

These findings need to be considered in the context of the fact that approximately 95% of respondents who reached a settlement via mediation reported that the outcome had been in their favour (160 out of 164 claimants and 48 out of 56 defendants). Also, that 90% of those whose cases were determined at a small claims hearing (whether or not after an unsuccessful attempt at mediation), were reported to have won their case (203 out of 215 claimants and 156 out of 186 defendants).
 
Payment
Parties who ought to have received payment as a result of a settlement reached via mediation were more likely to report receiving payment in full (87%) than those who had been successful at a small claims hearing (69%).
 
However, among all those who ought to have received payment (whether following mediation or a small claims hearing) 10% of claimants and 27% of defendants had to take enforcement action before it was obtained (whether in full or in part). The report does not provide breakdowns for percentages of parties to mediation and to small claims hearings who had to take enforcement action. Therefore, whether or not mediation was any more successful than judicial determination in generating payment without the need for enforcement action is not clear.
 
Comment
As noted already, it is not clear how representative survey participants were. However, the findings suggest that in cases where small claims mediation works for at least one party – in the sense that it produces a settlement which that party believes to be in their favour, levels of overall satisfaction may be about the same as where a small claims hearing produces a similar outcome. Therefore, one might ask: what additional benefits does small claims mediation offer to successful parties?
 
One possible answer is a better chance of receiving payment in full. Another is a more convenient way of resolving disputes. In its 2008-09 Annual Report, HMCS declared that ‘because most mediations take place by telephone ... [parties] can resolve their disputes without incurring the expense and time of attending court. This is especially helpful for the elderly, disabled or those with caring responsibilities.’ However, the low levels of satisfaction with the convenience of arrangements for mediation noted above suggest that something may be awry here, and that there is a need for more and better data about what they actually involve.
 
The Consumer Focus report includes findings and recommendations about other aspects of small claims mediation, and of the small claims process more generally, which it has not been possible to review here. However, one contention of note is that ‘businesses appear to be dominating the small claims procedure’. This did not appear to be reflected in the survey sample. Including those who did and did not use the mediation service, only 28% of claimants and 22% of defendants reported that their opponent was a large company; 59% of both said that the other party was either a sole trader or small business, or a private individual. As noted earlier, it is not clear how representative the sample was. But these figures suggest that in assessing whether the small claims process, including the mediation service, meets the needs of consumers there is a need to also bear in mind the needs of sole traders and small businesses. Many of them may be in no better position than individuals acting in a personal capacity in terms of familiarity with the process, or their ability to benefit from it.
 
December 2010
 
Key websites
 
Consumer Focus small claims report and research