The Civil Justice Council (CJC) has argued against the idea that the government’s proposed small business commissioner (SBC) should set up a new mediation service.
“We see some difficulty and not very much advantage in the SBC actually providing its own mediation service, as opposed to simply signposting existing provision,” the CJC said.
“How would this be superior to that already available? Would it not lack the necessary neutrality where the dispute was small business against large business and the SBC was perceived as the champion of the small business?”
Responding to a consultation by the Department for Business, Innovation and Skills (BIS), the CJC said there was already “substantial provision” for mediation, the most obvious being the small claims mediation service, private mediation and sector-based conciliation services.
The CJC said it had “some concern” about the proposed power of the SBS to issue certificates where mediation had failed, where a party had “unreasonably failed to participate” and which could be considered at a later stage by the courts in awarding costs.
The CJC went on: “That process would be absolutely unprecedented in civil justice in this country, where courts have never sought to intervene in this way. Allegations of lack of good faith are frequently made in mediations and are highly subjective.
“Absent a very small number of extreme cases (such as cases of simple non‐attendance on the given day), this is bound to be a contentious area and the CJC does not believe that mediators will welcome this potential intrusion into the confidentiality of the mediation day or the satellite arena it provides for the parties’ grievances, which risk bringing the commissioner and its role into disrepute.”
The CJC said it was keen to draw the attention of BIS to its report on online dispute resolution for low value civil claims.
“The overlap with those proposals is striking, and both sets of recommendations share an emphasis on an initial online advice resource and on mediation to resolve disputes.”
The CJC agreed that the SBC should provide general information and advice to small business on a confidential basis, where they were involved in disputes with larger companies.
However, it warned that this year’s court fee rises were likely to have a “disproportionate effect on small businesses”.
In its response to the consultation, the Law Society argued that parties should retain their rights to independent legal advice and also warned against plans to highlight when a party has failed to participate in mediation.
Kathleen O’Reilly, a member of the Law Society’s company law committee, said: “Praising and shaming parties’ positions in disputes may risk disclosure of commercial confidentialities as well as interfere with the right to exercise freedom of choice and enforcement of contractual rights.”