The Ministry of Justice has launched a consultation on making mediation compulsory for small claims of up to £10,000.
Under the proposed scheme people would be referred automatically to a free hour-long telephone session with a professional mediator provided by HM Courts and Tribunals Service (HMCTS) before their case can be progressed to a hearing.
During the session the parties involved will speak separately to the mediator to see if there is a common ground between them. If a solution is brokered, both parties will agree over the phone for it to be made legally binding through a settlement agreement, the MoJ said.
The MoJ said it was expected that up to 20,000 extra cases every year could be settled away from court under these proposals.
The £10,000 limit would not include personal injury or housing disrepair claims which have a lower threshold.
Justice Minister Lord Bellamy QC said: “Millions of businesses and individuals go through the civil courts every year and many of them simply do not need to.
“Mediation is often a quicker and cheaper way of resolving disputes and under our proposals this will be free of charge for claims up to £10,000.
“This could also help free up vital capacity in the civil courts to deal with more complex cases quicker.”
The consultation follows a government call for evidence which examined how dispute resolution services, such as mediation, could be used more widely to resolve disagreements away from court.
The MoJ said the call for evidence found that mediation “often offered faster, cheaper and more flexible solutions, but more needs to be done to encourage its use”.
The Ministry pointed out that automatic or mandatory mediation had been in use in three Canadian cities in Ontario for more than 20 years, and a recent survey of Ontario Bar Association members showed that 90% of respondents favoured expanding it further.
The consultation will last for 10 weeks until 4 October 2022. The MoJ said a response will be published in due course.