Civil and Commercial Mediation Services in the UK: What Clients Need to Know?
Abdelrahman Abdeltawab
Trainee Solicitor
Disputes in England and Wales can be resolved through a spectrum of processes, each has its advantages and disadvantages . At one end sits negotiation, the informal and most flexible route where parties talk directly or through advisors to reach a deal. Mediation adds a neutral third party “facilitator” who helps the parties explore options without deciding the case; it is confidential and without prejudice, so the parties positions can be tested safely.
Early neutral evaluation and expert determination introduce an independent view on the merits or a technical issue, which can be persuasive or contractually binding depending on the terms agreed. Adjudication offers a swift, interim decision in certain sectors such as construction, maintaining cash flow while reserving the right to later litigate or arbitrate. Arbitration delivers a private, enforceable award under the Arbitration Act 1996, often chosen for cross-border or specialist disputes. Litigation remains the public, court-imposed determination with appeal routes and coercive powers.
Current civil procedure encourages parties to choose proportionate non-court dispute resolution at an early stage, and case law now supports the court’s ability to require it where appropriate. Against that backdrop, mediation has become a central tool because it preserves control, protects confidentiality and frequently resolves matters in a single day while leaving litigation and arbitration rights intact if settlement is not reached.
What’s Changed?
Mediation in the UK is not just “nice to try” anymore or a pre-requisite to stringent formal legal proceedings where parties and their lawyers can start ripping each other apart without actual understanding of the real underlying issues involves and how to best fix them.
In our opinion, since late 2023 the courts have taken a positive stance by firmly signalling that they can order parties to use non-court dispute resolution when it’s proportionate, and they now routinely impose cost consequences for poor Alternative Dispute Resolution (ADR) conduct. Add to it the government’s rollout of mandatory small-claims mediation and you will almost find yourself in a materially different litigation landscape.
The Churchill Effect: Courts Can Now Order ADR
In Churchill v Merthyr Tydfill [2023] EWCA Civ 1416, the Court of Appeal confirmed that judges may stay proceedings or order parties to engage in a non-court process (such as mediation), so long as the order is compatible with a fair trial and proportionate to a legitimate aim. The Civil Procedure Rule Committee has since consulted on explicit CPR changes to reflect that power and to signpost costs consequences for failing to participate. For litigators, that means ADR timing and reasonableness are now live case-management issues, not afterthoughts for the costs phase.
Mandatory mediation for Small Money Claims
From 22 May 2024, eligible small-claims money cases (those less than 10,000) are now baked into a free, one-hour HMCTS mediation step, with potential sanctions for no-shows without good reason. A practice Direction 51ZE pilot applies to claims issued from 22 May 2024 through 21 May 2026, and the Justice Committee has noted implementation progress across the small-claim track and we expect further integration as online systems catch up.
Costs Risks: Silence or Refusal to Mediate can Bite
Two recent decisions underline the point. In Northamber plc v Gene World Ltd [2024] EWCA Civ 428, the Court of Appeal held that staying silent in the face of a genuine mediation offer is unreasonable, and costs should reflect that. In Conway v Conway [2024] EW Misc 19 (CC), the successful defendants still lost 25% of their recoverable costs for unreasonably rejecting multiple mediation invitations. The overall message, building on PGF II v OMFS and Halsey-line authority, is simple: engage, explain, and keep a defensible paper trail.
Is Mediation Confidential and “Without Prejudice”?
Yes!!Mediation generally remains confidential and falls under the without prejudice rule, but recognised exceptions exist. For example, when determining whether the parties reached a binding deal or when clear impropriety occurs. Brown v Rice [2007] EWHC 625 (Ch) examined this point, and later commentary revisited it. The safest course assumes strong protection, but not absolute immunity. Draft your mediation agreement and any “save as to costs” communications accordingly.
Hence, legal professionals and parties involved in the mediation process should think of protection as two overlapping layers:
- Contractual confidentiality in the mediation agreement (usually binding the parties and the mediator).
- Without prejudice privilege at common law, which protects settlement communications from being used as evidence on the merits.
Mediation communications enjoy strong but not absolute protection. The safe mental model is: Confidential and Without Prejudice by default; admissible only within narrow, well-policed exceptions. Mediation agreements drafted carefully, communications labelled properly, and you will keep the veil intact and you will be ready for the few situations where the court may need to peek behind it.
Are Mediation Costs Recoverable Later?
They can be, but it turns on reasonableness, proportionality and your documents. As a matter of principle, mediation work falls within recoverable litigation costs; however, standard wording that “each party bears its own mediation costs” can block recovery unless varied in the Tomlin Order or settlement terms. If you want recoverability, say so expressly.
What the Data Says
Independent audits continue to report high settlement rates. CEDR’s published figures show roughly 60-70% settlement on the day with another 20% shortly after, and the biennial 2025 Eleventh Mediation Audit indicates a mature, resilient market with online mediation now a permanent fixture of commercial practice. For clients, that translates into predictable timeframes; for legal professionals, into measurable reduction in risk, flexibility of outcomes, and in certain circumstances protecting the commercial relationship.
Practical Takeaways
Clients should treat mediation as a strategic opportunity, not a box-tick. Go in with clear objectives, a workable settlement range, and authority to deal. If court is unavoidable, a credible mediation record improves optics on costs and case management.
Lawyers, on the other hand, it’s recommended that you front-load the ADR thinking in Pre-Action Protocol letters and early directions. When proposing or receiving mediation, respond substantively and record your reasons either way. Use “without prejudice save as to costs” where appropriate. If you want to recover mediator fees, build that into the settlement paperwork.
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