1. Mediation and small claims are two ways to resolve money disputes under £10,000.
Mediation, offered through the Small Claims Mediation Service, is free and usually takes about an hour, but it only works if both sides are willing to cooperate, and any agreement still needs to be formalised to be enforceable.
2. Small claims court, on the other hand, is a formal process involving filing fees (£35–£455) and a hearing, and cases can take around 50 weeks on average to reach trial, but it is the route that leads to a binding, enforceable judgment if the defendant does not pay voluntarily.
3. Mediation can be useful when both sides are willing to talk and explore settlement, but it does not replace the need for a court where you want a binding judgment, clear enforcement options or a reluctant defendant. Agreements reached in mediation aren’t automatically enforceable; they only become legally binding once turned into a consent order or settlement agreement approved by the court.
Introduction
Disagreements over payments, property or services are a fact of life. When a dispute arises, most people instinctively think of going to court, and with good reason: the small claims process leads to a clear, enforceable decision. Mediation is also available as a way to explore settlement before a hearing, but it depends on cooperation and does not automatically produce a binding outcome. This article compares small claims vs mediation to help you choose the right option for your situation.
Every year, thousands of people and small businesses in England and Wales face the same dilemma: do I simply prepare my case for court, or also try mediation along the way? In 2022, more than 85,000 money claims were issued, and over 20,000 parties opted for mediation. The court process is formal and can take time, with filing and hearing fees and a median wait of around 40.6 weeks for a small claim to go to trial in 2025. Mediation may aim to resolve disputes within weeks, but many claimants are rightly cautious about whether a voluntary discussion, without a judgment, will have teeth if the other side does not follow through.
Mediation offers a confidential, cooperative way to try to settle disputes, and it is free through the Small Claims Mediation Service, with a reported settlement rate of around 55–61%. However, nearly half of the cases do not settle at mediation, and only the court can issue a judgment that is automatically enforceable. Court, therefore, remains central to resolving small claims, especially where a defendant refuses to negotiate or where you want certainty about the outcome, and platforms such as CaseCraft.AI are designed specifically to help you navigate that process effectively.
In the sections below, you’ll learn what mediation and small claims court involve, how long each process takes, the costs, success rates and enforceability. Real examples and statistics help you understand the pros and cons.
What is the Small Claims Mediation Service?
The Small Claims Mediation Service (SCMS) is part of the HM Courts & Tribunals Service. It provides a free, confidential mediation appointment to parties involved in defended money disputes under £10,000. Mediation is a confidential process where an independent mediator helps disputing parties explore a voluntary agreement. Sessions are usually held by telephone or video call, last around an hour and are offered free of charge for claims under £10,000. If an agreement is reached, the terms still need to be written down and, where enforceability is important, turned into a consent order or settlement agreement approved by the court.
How It Works
When a defendant files a defence to a money claim, both sides receive a Directions Questionnaire (N180 form) from the court. The form asks whether you want your case referred to the Small Claims Mediation Service. If both parties tick “yes”, the court arranges a one‑hour mediation appointment by phone, usually within 28 days. Mediation appointments take place Monday to Friday between 8 am and 5 pm.
Advantages
- Free and fast: The SCMS offers free one-hour telephone mediation for eligible claims, and in 2024, the Ministry of Justice doubled the number of mediators with the aim of scheduling sessions within 28 days. However, even a fast appointment does not guarantee a settlement, and unresolved cases still proceed through the usual court timetable.
- Confidential: Everything said in mediation is private. Mediators do not see your court documents and cannot give legal advice, which means mediation is a space for negotiation rather than a forum where legal rights are determined or clarified.
- High settlement rate: Official evaluations indicate that in 2019, 61% of small claims mediations resulted in a settlement and 55% in 2021, but this also means that a substantial proportion of cases do not settle at mediation and must still be resolved by the court.
- Relationship-friendly: Because mediation encourages dialogue, it can sometimes help parties explore flexible solutions and maintain relationships, but this has to be balanced against the need for a clear, enforceable outcome where significant sums or repeated non-payment are involved.
Limitations
- Voluntary agreements: Mediated agreements are not automatically enforceable. A verbal or written agreement (memorandum of understanding) is not binding until it is formalised into a consent order or settlement agreement.
- Relies on cooperation: Mediation only works when both sides are willing to communicate. If the defendant refuses to engage, the case proceeds to court.
CaseCraft.AI’s role
CaseCraft.AI makes it easy to prepare a strong small claim and, where offered, to approach mediation from a position of strength. Its auto-generated legal forms and step-by-step AI guidance help you compile evidence, track deadlines and produce court-ready documents, so that your case is properly structured whether you settle at mediation or proceed to a hearing.
What is the Small Claims Court Process?
Small claims court is a formal legal process used to resolve money disputes under £10,000. Here’s how it works:
Filing a Claim
You start by writing a letter before action (also called a pre‑action letter). According to the Practice Direction on Pre‑Action Conduct, the letter must summarise the facts of the dispute, what you want, how you calculated the amount, copies of key documents and a reasonable deadline (usually 28 days) for the other side to respond. The letter should also state that you are willing to mediate. Sending this letter is required; failure to do so can lead to cost penalties.
If the dispute remains unresolved, you can file a claim online through CaseCraft.AI’s platform. The platform generates court‑ready forms, organises your evidence and guides you through the process. There is no requirement to hire a solicitor; most users represent themselves.
Response from the Defendant
After you file, the defendant has 14–33 days to respond, depending on the service method. They can admit the claim and pay, file a defence, or ignore it. If they admit liability and pay, the matter ends. If they defend, the case is allocated to the small claims track.
Directions Questionnaire
Both parties receive the N180 directions questionnaire. They must indicate whether they agree that the claim should be allocated to the small claims track and whether they wish to try mediation. If both parties agree, the Small Claims Mediation Service arranges a mediation appointment. If either side refuses, the case proceeds to a hearing. Failure to attend mediation can result in cost sanctions.
Hearing and Judgment
If mediation fails or is refused, the case moves to a hearing. Hearings are less formal than higher court proceedings but still involve presenting evidence and witnesses. The judge listens to both sides, asks questions and issues a judgment. The median time from issue to trial was 40.6 weeks in mid‑2025, though some cases took over 50 weeks. Hearing fees (paid only if the case goes to court) start from £27, depending on claim size.
Enforceability
A court judgment is automatically enforceable. If the defendant fails to pay, you can apply for enforcement methods such as bailiffs, attachment of earnings or charging orders. CaseCraft.AI’s enforcement guide offers digital tools to help you choose the right enforcement method.
Comparing Mediation and Small Claims
To decide between mediation vs court in the UK, consider cost, time, outcome, formality, enforceability and other factors. The table below summarises the key differences:
| Factor | Mediation (SCMS) | Small Claims Court |
| Cost | Free through the Small Claims Mediation Service. Private mediation costs £75–£125 + VAT per party for disputes up to £5,000. | Issue fee (£35–£455) and hearing fee (£27–£346). May incur enforcement costs if the defendant doesn’t pay. |
| Time | Mediation sessions last about one hour and are usually scheduled within around 28 days of referral, so the process may be concluded in a few weeks if agreement is reached; if not, the claim continues to follow the normal court timetable. | Median time from issue to trial is about 50 weeks. Delays vary by region. |
| Outcome | Voluntary agreement – parties decide the terms. An agreement is not binding unless formalised into a consent order. | A binding judgment decided by a judge. The losing party must comply. |
| Formality | Informal and confidential. No one gives evidence. Mediators shuttle between parties. | Formal hearing with evidence and witness testimony. Public record. |
| Enforceability | Only enforceable if the agreement is turned into a consent order or settlement agreement. | Automatically enforceable by law. The court can issue warrants of execution. |
| Relationship impact | Cooperative and relationship-focused. It can sometimes preserve business or personal ties, although the need for a clear outcome may outweigh relationship concerns in some disputes. | Often adversarial. May damage relationships. |
| Success rate | 55–61% of SCMS mediations settle, meaning a significant minority still proceed to a hearing. Commercial mediations report higher settlement rates, but small claims users should be prepared for the possibility that mediation will not resolve their case. | Depends on the strength of the evidence. Many cases settle before trial; those that proceed end with a court decision. |
When Mediation May Be Better
Mediation can be helpful in certain situations where a quick, amicable resolution is realistic. Consider mediation when:
- Both parties are open to discussion. Mediation requires cooperation from both sides; if the other party genuinely engages, settlement may be possible, but if they are half-hearted or obstructive, you will still need the court to decide.
- The amount is modest. For some low-value disputes (e.g., under £5,000), court fees may feel significant compared to the claim size, so a free mediation can be worth trying, provided you accept that there is no guarantee of settlement and you may still need to pursue the claim through the court.
- Relationships matter. Neighbours, landlords and customers may prefer to explore settlement before a hearing to preserve ongoing relationships, although where behaviour is repeated or trust has broken down, a clear court judgment may ultimately be more effective.
- Time is critical. When you need a resolution quickly, mediation can sometimes be concluded in weeks rather than months, although a hearing will still be needed if no agreement is reached.
- Privacy is important. Mediation discussions are confidential, whereas court judgments are public, so some parties may prefer to attempt a confidential settlement before any public hearing.
- Flexibility is desirable. Parties can agree on creative solutions (e.g., partial refund, repairs, instalment payments) that a court might not impose, although any such agreement still needs to be formalised properly if you want to rely on it later.
Example scenarios:
- Refund disputes: A customer seeking repayment for a faulty appliance may agree with the seller during mediation to a replacement or partial refund.
- Deposit disagreements: Tenants and landlords can negotiate the return of a tenancy deposit, avoiding a confrontational court hearing.
- Minor service complaints: An unhappy client can settle with a service provider by agreeing to a discount or additional work.
When Small Claims Court May Be Better
Despite its speed and cost benefits, mediation isn’t always appropriate. You may prefer court when:
- The other party refuses to negotiate. If they ignore your pre‑action letter or decline mediation, the court may be the only option.
- You need a binding decision. Only a court judgment is automatically enforceable. If enforcement powers such as bailiffs or charging orders are essential, the court is better.
- Complex or disputed evidence. Cases involving detailed contracts, expert testimony or multiple witnesses may require judicial determination.
- Repeated non‑payment. When a party has a history of ignoring agreements, a court order provides a clear enforcement route.
- Legal precedent is important. Some litigants want a judge to decide a point of law or establish liability for future claims.
Example scenarios:
- Unpaid invoices: A business that owes several thousand pounds may need a judgment to enforce payment and send a message to the debtor.
- Property damage: Landlords seeking compensation for significant property damage may rely on the court’s authority to recover costs.
- Breach of contract: When a contractor repeatedly fails to honour agreements, a court may be necessary to secure compliance.
How the Mediation Process Works (Step‑by‑Step)
Understanding the mediation process in the UK demystifies it and encourages uptake. Below is a step‑by‑step guide:
Case accepted: After filing a claim and receiving the defendant’s defence, the court sends both parties a Directions Questionnaire (N180). You indicate whether you agree to mediation.
Appointment scheduled: When both parties consent, the Small Claims Mediation Service arranges an appointment within 28 days. Appointments are by phone and last up to an hour.
Mediator introduction: The mediator explains the ground rules. They remain impartial and do not provide legal advice or see your case documents.
Private sessions: The mediator speaks separately to each party, exploring the issues and possible resolutions. Each call is confidential; information is not shared without permission.
Exchange of offers: The mediator “shuttles” between parties, exchanging offers and counteroffers. This continues until agreement is reached or time runs out.
Agreement drafted: If a settlement is reached, the parties write down the terms. For enforceability, the agreement should be formalised into a consent order or settlement agreement.
No agreement: If mediation fails, the case proceeds to a court hearing. Discussions during mediation cannot be used in court as evidence.
Costs and Fees: Mediation vs Court
Mediation Costs
- SCMS: Free for defended money claims under £10,000.
- Private mediation: Under the Civil Mediation Council’s fixed‑fee scheme, one‑hour telephone or video mediation for disputes up to £5,000 costs £75 + VAT per party. A two‑hour session costs £125 + VAT. For claims between £5,000 and £15,000, a three‑hour session costs £320 + VAT per party.
Court Costs
- Issue fee: Paid when you file your claim. The fee ranges from £35 (claims up to £300) to £455 (claims £5,000.01–£10,000).
- Hearing fee: Payable only if the case proceeds to a hearing. Fees range from £27 to £346, depending on claim size.
- Enforcement costs: If the defendant doesn’t pay after judgment, you may pay extra to instruct bailiffs, seek an attachment of earnings or register a charge on their property.
Example Calculation
Suppose you file a £1,000 claim. The issue fee is £70 and the hearing fee (if needed) is £85. Total potential fees: £155. In mediation, the cost would be zero via the SCMS or £75 + VAT privately.
CaseCraft.AI offers success‑based pricing; you pay a small set‑up fee (£15) and a percentage only if your claim succeeds. This can make going to court more affordable, especially for low‑value claims.
How to Request Mediation in a Small Claim
File your claim: Start your money claim using CaseCraft’s platform or HMCTS online forms.
Complete the Directions Questionnaire: When you receive the N180 form, tick “Yes” to indicate you want your case referred to the Small Claims Mediation Service.
Provide contact details: List the name and contact information of the person who will attend the mediation and any dates you can’t attend.
Await appointment: The court will schedule your mediation within about four weeks. Make sure you answer calls and emails promptly.
If one party refuses to mediate, the case proceeds to court. Remember that refusing mediation without good reason can lead to cost sanctions.
How to Make Mediation Agreements Legally Binding
Mediation agreements aren’t automatically enforceable. To formalise your settlement:
- Draft a written agreement: After mediation, write down the terms. This may be called a Memorandum of Understanding (MoU). However, an MoU is not legally binding.
- Seek legal advice: Consult solicitors to ensure the terms are fair. Each party should obtain independent advice.
- Prepare a consent order: A solicitor drafts a consent order, a legal document that formalises the terms of the settlement.
- Submit for court approval: File the consent order with the court. Once approved by a judge, it has the same force as a judgment.
- Enforce if necessary: If the other party breaches the consent order, you can enforce it like a court judgment.
Advantages and Disadvantages of Mediation
| Advantages of Mediation | Disadvantages of Mediation | Advantages of Small Claims Court | Disadvantages of Small Claims Court | |
| Time | Quick sessions last about an hour and are arranged within a few weeks. | May not fully resolve complex issues. | Formal judgment provides closure. | Cases often take around 50 weeks to reach trial. |
| Cost | Free via SCMS. Low private fees. | Private mediation costs money and must be shared. | Issue fees are fixed and recoverable if you win. | Filing and hearing fees can be significant. Enforcement adds extra costs. |
| Outcome | Parties control the outcome and can agree on flexible solutions. | Not binding unless formalised into a consent order. | A binding judgment is automatically enforceable. | Judgment may be all‑or‑nothing and public. |
| Relationship impact | Cooperative and preserves relationships. | Requires cooperation; may fail if power imbalances exist. | The court may deter future non‑payment. | Adversarial may damage relationships. |
| Stress level | Informal and less intimidating. | Still stressful for some participants. | Provides finality and legal clarity. | More formal and stressful; requires preparation and attendance. |
Choosing the Right Path
Selecting between small claims vs mediation depends on your goals, the size of the claim and the behaviour of the other party. Mediation can be quicker and collaborative in the right circumstances, but it relies on cooperation, and any agreement still needs a consent order or settlement agreement to become enforceable. The court provides a binding judgment and enforcement options, which are often crucial where significant sums are involved or a defendant has not paid voluntarily, even though the process involves fees, waiting times and preparation.
If you’re unsure, it usually makes sense to prepare your case as if it will go to court and then use mediation as an opportunity to settle on sensible terms if both sides are willing. That way, you are ready to proceed to a hearing if mediation does not result in agreement or the other side refuses to engage.
CaseCraft.AI is built exclusively for small claims. Its auto-generated legal forms, fast filing in minutes and step-by-step AI guidance help you file or defend your claim efficiently and maximise your chances of a successful court outcome. The platform supports you through the entire process, from drafting a pre-action protocol and preparing evidence to engaging with mediation where offered and, if necessary, enforcing judgments. Get started and put yourself in the strongest possible position to resolve your dispute with confidence.
Disclaimer: The information in this article is for general guidance only and does not constitute legal advice. Always consider seeking professional assistance if your case involves complex or high-value claims.
FAQ: Small Claims vs Mediation
What is the Small Claims Mediation Service in the UK?
The Small Claims Mediation Service (SCMS) is a free telephone mediation offered by HM Courts & Tribunals Service for defended money claims under £10,000. After the defendant files a defence, both parties receive a directions questionnaire. If they opt into mediation, the court schedules a one‑hour appointment within about 28 days. The mediator helps the parties negotiate a voluntary agreement.
Is mediation mandatory in small claims court proceedings?
Since 22 May 2024, most defended money claims under £10,000 must attend a free mediation appointment before proceeding to a hearing. Parties fill in a directions questionnaire (N180) indicating whether they agree to mediation. Refusing mediation without good reason can lead to cost sanctions, so it is sensible to prepare your case properly, take mediation seriously and be ready to proceed to a hearing if settlement is not possible.
How long does mediation take compared to court?
Mediation sessions last about one hour and are usually arranged within around four weeks of both parties opting in. In contrast, small claims cases typically wait around 50 weeks for a trial. Where agreement is reached, mediated disputes can be concluded much sooner, but if no settlement is achieved the case still continues towards a court hearing.
Is mediation legally binding?
Mediation by itself is not legally binding. Agreements reached during mediation are voluntary and only become legally enforceable if they are documented in a consent order or settlement agreement approved by the court. Without formalisation, a Memorandum of Understanding has no legal force.
