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Compulsory mediation and OCMC expansion from 28 July 2025

18 August 2025

The Justice Committee Report on the work of the County Court was released last week, with the expected widespread criticism of the current system, including the HMCTS Reform project which has not led to the expected gain in the digital space. 

At around the same time we received the news that from 28 July 2025, all RTA claims under £10,000 (excluding personal injury) must undergo compulsory mediation, applying only to future cases. A link to the updated Practice Direction 51R can be found here.

The Justice Committee report can be found here.

A brief history

The HMCTS Reform Project launched in 2016 with a £1 billion programme across 44 projects, covering civil, family, and criminal law. For the civil arena, the ambition was to create a cradle to grave digital service to include damages claims, which did not materialise. Whilst the pandemic will have played a part, the National Audit Office concludes a significant factor was 'a lack of understanding around the complexity of its initial ambitions'. Still, hopes were high and on the conclusion of Reform, the MOJ expected 86% of County Court claims would be on a digital system. 

In February 2025 HMCTS contacted the Justice Select Committee advising of the final delivery phase and setting out achievements including 14 processes that were now digital, with 2 million cases submitted online. Final phase adjustments would prioritise end-to-end digital journeys for simple cases up to £25K for unrepresented claimants, and unlimited value for those represented. Bulk claims and enforcement were descoped as were multi-party claims involving Litigants in Person (although the DCP currently has a limit of three parties for represented, something not mentioned). 

What does the Justice Committee Report say about the state of the County Court?

Key comments from the Master of the Rolls, Sir Geoffrey Vos, reported only 23% of civil claims would be digitalised through Reform, with only 24 of 44 projects completed, and with an overall spend of over £1billion. He went on to describe the inefficiencies: -

''Many cases have data stored or processed in two or more of four irreconcilable mediums: (a) paper, (b) the legacy computer system called Caseman, (c) local court computer systems, and (d) the new digital systems created by Reform''.

Transferring cases offline led to months of delay as files were printed and transferred between courts. The OCMC is also heavily criticised, described by a group advising on small claims as a 'terrible abomination'. 

We are reassured to see our own feedback has been considered, as DWF responded to both calls for evidence. The Committee comments, 'the civil projects that were delivered under the Reform programme were not sufficiently tested with practitioners in mind'. We have been advocating for our involvement in this process for a considerable period. It is suggested future undertakings involve consultation and co-design with users, a sensible step forward. 

The Committee concludes the MOJ should review all descoped work and prioritise digitalisation, which may explain why expanded OCMC mandation has been so rapid. 

Finally, a single case management system must be introduced, although we are still a long way from that reality.

The report moves on to mediation, which the committee fully supports expanding. It does however cite support from the Registry Trust, where the Trust are commenting on successful pre issue mediation in both Sweden and Germany. The changes being brought in are in fact post-issue and entirely different. 

Compulsory mediation – from 28 July

Compulsory mediation is already mandatory in the OCMC for non-RTA non-PI claims less than £10K. From 28 July 2025 this is extended to all RTA claims including motor damage and credit hire but not personal injury. 

Why is this happening? 

In short, due to court backlogs and the pressure the Master of the Rolls is under to bring them down to a reasonable level. The pilot indicated 70% of claims settled under the mandatory mediation. It is hoped extending mediation to RTA claims will reduce the need for a small claims hearing. 

How and when is this happening? 

The Statutory Instrument has been signed off and the changes go ahead from 28 July 2025, with all new claims in the system captured. This will be initially a one-year pilot with a consultation at the conclusion.

What is the process? 

Proceedings are issued on the OCMC and a date set for the Defence. If the Defence is filed, the Claimant will then be asked if they want to proceed with the claim. If they say yes, the matter is at that point referred to mediation. An appointment date will be sent out to the parties and presuming both can make it, the appointment will proceed.

The appointment will generally be 10 minutes within a 2-hour window between 8am and 5pm. The mediator calls the parties or a representative, in turn, calling back the initial party to communicate the result of the mediation. Both parties need to agree to a settlement for an agreement to be binding. If one or both parties does not, the matter will proceed as usual to a small claims hearing. 

What extra steps are needed for insurers? 

As this is a post-issue mediation, little in practical terms. It would be wise to amend any documentation that is sent out regarding the court process to include the mediation step, so that policyholders are aware of the steps that need to be taken and provide instructions. There will be greater scrutiny on compliance with pre-action protocols. Any steps of the protocols that require disclosure of documents prior to issue, plus a consideration period or stocktake letter, will need closer attention. 

What about costs? 

The Small Claims track is a non-cost bearing environment, so it follows that the costs of the mediation appointment are not recoverable. There is however the caveat of unreasonable conduct, which specifically includes failure to attend mediation:

''When considering how to exercise its discretion to order or decline to order costs falling within paragraph (2) (including when considering under paragraph (2)(g) whether a party has behaved unreasonably), the court may also take into account any failure by a party to attend mediation provided by the Mediation Service under rule 26.6.“ Practice Direction 51ZE.

It is also possible that, where there has been a case that could and should have settled pre-issue (with document disclosure), the costs of mediation could be awarded against the defaulting party. 

Impact on practice areas  

Credit hire  

Gavin Perry, Partner, DWF, as part of the FOIL SIG on Credit Hire has been involved in the creation of a Credit Hire PAP. However, this is not in force yet with no indication when or if it will happen. 

Whilst litigation should be a last resort, and therefore relevant documents disclosed pre proceedings, this is not usually our experience. CHO's and their solicitors routinely allege impecuniosity but declare "impecuniosity documents aren’t relevant until litigation". That is clearly wrong, but if that mentality persists, then mediation will be meaningless assuming the documents still have not been disclosed. 

Usually, prior to proceedings an offer will be made based on BHR rates for an appropriate period, the Claimant will allege impecuniosity, not evidence it, and then issue. At a mandatory mediation, it is likely that we will maintain our position, the claimant’s representatives will maintain the claimant is impecunious, and the mediation will most likely fail From the mediations we have had so far outside the credit hire arena, there are no sanctions applied for failure to properly engage, and in the absence of that it seems little more than a tick box exercise – particularly in a non-costs bearing environment where you would need to show unreasonable conduct for costs to become relevant, and then go further for Tescher to be invoked re NPCO. 

If the Mediator could make recommendations to be considered by the Judge at a final hearing that would be useful – but they may have no experience of the matter they are mediating on and almost feels like the Court equivalent of "banging the parties heads together". 

We have always advocated costs marker letters prior to litigation – these remain appropriate and should now reference failure of any mediation if appropriate. Given the court delays, the main benefit seems to be that the CHO will be kept from their monies for longer. Whether that brings them to the table, or drives better behaviours, remains to be seen. 

Motor damage

Emma Louise Smith, Director, has given her view on the changes:  

From our perspective, little should change with the mandatory mediation extension to RTA cases under 10K. The much-hyped success rate of 70% settlement in mediation cases in the pilot so far is somewhat of a misnomer; with RTA excluded mediators were dealing with domestic disputes and often not represented parties. These cases are inevitably more likely to settle. Most RTA cases have representation on both sides, with the parties already having gone through a pre-action process to narrow issues between them. What mediation will bring to further this process is unknown, but the settlement rate is unlikely to be anywhere near that of the pilot so far.

For insurers, save for some additions to internal processes and documentation provided to policyholders, there will be little noticeable change. Lifecycles may be slightly longer and there may be greater scrutiny on pre-action processes and disclosure. There will be more impact for panel firms as we deal with the inevitable initial flood of appointments and factoring them into workflows. There will also be a need to maintain data on the success (or otherwise) of the pilot so we can hold HMCTS to account on how often cases are resolved through mediation. We continue to be of the view that mediation for most RTA cases is unnecessary will likely have an impact on lifecycles which we will be monitoring. 

Once the mediation sessions start to land, we will then be able to have a better understanding of the process and report further. 

Next steps 

We are monitoring cases caught by the changes. Most credit hire non-PI claims are issued in the DCP rather than the OCMC so that might be a loophole that is capitalised on by claimant solicitors, as we understand they are not keen on extending mandatory mediation. This is now a formal one-year pilot, and we will be invited to respond to a formal consultation which will have a large bearing on whether RTA remains in scope. DWF will gather insight and form strategies which we will pass on to our clients based on our experiences in the process and the data derived from it.

Thank you to Nicola Garcia for contributing to the production of this article.

Further Reading