Written by Alternative dispute resolution – civil procedure – practical guidance
A direction from the court proposing mediation is no longer a suggestion that can quietly be filed away. Civil courts in England & Wales can now stay a claim for, or even order, a non-court dispute resolution process, and the Civil Procedure Rules have been amended to match. This guide explains what power the court is using, what refusing may cost, and how a litigant in person can take part usefully without a lawyer.
Snapshot
Two things run in parallel, and confusing them causes most of the anxiety. The small claims mediation scheme is a standing, automatic referral built into the rules for lower-value money claims. The general power confirmed in Churchill is different: it lets a judge stay or direct almost any civil case towards a non-court process. Either way, being directed to mediate is not being told to settle, and engaging properly is usually the safest and cheapest course. Blank refusal, by contrast, now carries a real costs risk.
What changed after Churchill
For almost twenty years, the governing assumption came from a 2004 Court of Appeal decision, Halsey v Milton Keynes General NHS Trust. That case said that to oblige truly unwilling parties to refer their disputes to mediation would be an unacceptable obstruction on their right of access to the court. Courts could encourage mediation, sometimes strongly, but the received wisdom was that they could not compel it.
That assumption was dismantled by Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416. A homeowner sued his local council in nuisance over encroaching Japanese knotweed; the council asked the court to pause the claim so that its internal complaints procedure could be used, and the district judge refused, holding that Halsey tied his hands. The Court of Appeal disagreed. The passages in Halsey that appeared to rule out compulsory mediation were not part of the essential reasoning of that decision, and so did not bind the courts below. The court has power to stay proceedings for, or to order the parties to engage in, a non-court-based dispute resolution process – provided the order does not impair the very essence of the right of access to the court, pursues a legitimate aim, and is proportionate to achieving it.
The rule-makers then caught up. The Civil Procedure (Amendment No. 3) Rules 2024 came into force on 1 October 2024, amending the rules expressly in response to Churchill. The overriding objective now includes promoting or using alternative dispute resolution, and active case management now includes ordering or encouraging the parties to use it. Most pointedly for a litigant in person, the court’s general management powers in CPR Part 3 now include ordering the parties to engage in alternative dispute resolution.
Key distinction. An order to engage in mediation is not an order to settle. What the court can direct is participation in a process; what the parties agree within it remains theirs to decide.
The two routes into mediation
The first route is a standing scheme rather than a judicial decision. Under Practice Direction 51ZE, a pilot running from 22 May 2024 to 6 April 2027, most County Court money claims for a specified sum that would be allocated to the small claims track are referred automatically to the Small Claims Mediation Service operated by HMCTS. Road traffic accident and personal injury claims are excluded. The appointment is free of charge, it is normally conducted by telephone, there is no pressure to settle, and if no agreement is reached the claim simply proceeds before a judge.
The second route is the general Churchill power, and it reaches much further. In any civil case, on any track, the court can stay the proceedings or order the parties to engage in a dispute resolution process – mediation, early neutral evaluation or something else – whether a party applies for it or the judge raises it independently. Whether to make such an order is a matter of discretion: the Court of Appeal deliberately refused to lay down a checklist, and said that many factors will be relevant, including the nature of the particular process proposed.
That distinction matters. An automatic small claims referral arrives as a routine step in the claim, not as a comment on anyone’s conduct. A direction made under the general power is case-specific: the judge has formed a view that this dispute, at this stage, should be attempted away from the courtroom. Responding well starts with knowing which of the two documents you are holding.
When the direction arrives
The first task is identification. Read the direction and work out which power produced it: an automatic referral to the Small Claims Mediation Service, a stay of proceedings while a process is attempted, or an order that the parties engage in a named form of dispute resolution. Note every date, and note precisely what “engaging” requires of you – attending an appointment, exchanging position statements, or contacting a named provider.
Objecting is possible, but it has to be done through the court, not by ignoring the paper. Where the court has made an order of its own initiative without hearing the parties, the order must state the right to apply to have it set aside, varied or stayed, and the application must be made within any period the court specifies – or, if none is specified, no more than seven days after the order was served. That window is short, so a direction you disagree with needs attention the week it lands, not the month after.
A useful objection is about the process, not about reluctance to settle. Points that carry weight are whether the proposed process has an independent neutral, what it will cost, how long it will take, and whether anything about the dispute – an urgent injunction, a party acting in bad faith, a fundamental point of law – makes settlement unrealistic. Those are the same considerations the court weighs when deciding whether to direct a process at all, so framing an objection around them keeps the argument on the court’s own ground.
Refusing and the costs risk
The sharpest practical change for litigants in person is in costs. When the court exercises its discretion about who pays the costs of a case, it must now have regard to whether a party failed to comply with an order for alternative dispute resolution, or unreasonably failed to engage in alternative dispute resolution proposed to them. A party who wins the argument can still lose on costs if they stonewalled a genuine mediation step along the way.
Small claims are not a safe exception. Costs on the small claims track are tightly limited, but the modified rules require the court, at a final hearing of a referred claim, to consider whether any sanction is appropriate having regard to whether the parties attended mediation, and allow a failure to attend to be counted when the court decides whether a party has behaved unreasonably for costs purposes.
The protective strategy is engagement, not concession. Attending the appointment, explaining your position honestly, and giving a reasoned account of what you could and could not accept is recorded conduct in your favour. A refusal with genuinely good reasons may still be defensible; a refusal with no reasons, or silence, is the position most likely to cost money later.
Engaging well without a lawyer
Representation is not a precondition for using mediation well. In the HMCTS small claims appointment, the mediator speaks to each side separately, the service aims to offer appointments within 28 days of referral, and support is available for vulnerable parties or anyone who needs assistance during the appointment. For a privately arranged mediation under the general power, the same discipline applies even if the format differs.
Preparation is short and concrete. Write a one-page chronology of the dispute. Gather the documents that prove your best three points. Decide, before the appointment, what you could realistically accept and what you genuinely cannot – and be honest about the cost, delay and risk of a hearing if nothing is agreed. In the appointment itself, listen for what the other side actually needs, because settlements are usually built around that rather than around legal rights.
The direction of travel is unlikely to reverse. The Civil Justice Council concluded in its July 2021 report that compulsory dispute resolution is compatible with the right of access to a court, provided court process remains available, and should be encouraged. Churchill and the 2024 rule changes put that thinking into force. Mediation is now part of how civil cases are run, not an optional extra bolted onto them.
Identify the power used, the deadline and what engagement requires of you.
Chronology, key documents and a realistic settlement range before the appointment.
Take part genuinely, give reasons for your position, and keep a note of what happened.
Source anchors
These sources support the procedural framework described in this article. They establish the rules and the authority; they do not determine the outcome of any individual case.
The Court of Appeal decision confirming the power to stay proceedings for, or order, non-court dispute resolution.
The amended objective, which now includes promoting or using alternative dispute resolution.
Including the power to order the parties to engage in alternative dispute resolution and the route to challenge own-initiative orders.
The statutory instrument that amended the CPR in response to Churchill, in force from 1 October 2024.
The pilot scheme under which eligible small money claims are referred to the HMCTS mediation service.
How the free small claims mediation appointment works, and what to expect from the service.
The report concluding that compulsory dispute resolution is lawful and compatible with the right of access to a court.
The closing point
A direction to mediate is not a judgment on the strength of your case, and attending is not surrender. It is a procedural step the court is now entitled to order, and one that many disputes genuinely benefit from. The merits still matter. But the cheapest way to protect the merits is to engage with the process properly and to let any settlement decision be yours, made with your eyes open.
Mediation direction decision point
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Which route produced the direction, what it obliges you to do, and by when.
Chronology, key documents and a realistic settlement range for the appointment.
Assessment outputs
The dispute, the direction and the live procedural steps.
How to take part in the process while protecting your position.
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