Mandatory Mediation on the Small Claims Track: PD 51ZE and What to Expect

If your defended county court claim is allocated to the small claims track (claims up to £10,000), mediation is not optional. Under Practice Direction 51ZE, defended fixed-sum small claims are automatically referred to the HMCTS Small Claims Mediation Service. Failing to attend without good cause can lead to your defence being struck out or cost penalties — even if you would have won at trial.

How the Mandatory Referral Works

Once a defence is filed and both parties return their Directions Questionnaires (Form N180), the court automatically refers the case to the Small Claims Mediation Service (SCMS). You do not need to apply or pay anything — the service is free.

HMCTS contacts both parties to schedule a mediation session. The session is a one-hour confidential telephone call with a trained mediator who shuttles between the parties. You do not speak directly to the other side unless both agree.

The mediator's role is to help you reach a settlement, not to judge the case. Nothing said in mediation can be used as evidence at a hearing if the mediation fails.

What Happens in the Session

The mediator calls each party separately to understand their position, then works between you to explore whether a settlement is possible. Typical mediation outcomes include:

• Full settlement: You agree a final figure and the case closes. The mediator records the agreement, which becomes binding.
• Partial settlement: You agree on some issues (e.g., the amount owed) and narrow the remaining dispute for the hearing.
• No settlement: Both sides maintain their positions. The case proceeds to a hearing as if mediation never happened.

Mediation settles a substantial proportion of small claims — the SCMS reports settlement rates above 60% for cases that proceed to a full session. Even where it does not settle the case, it often clarifies the real issues and saves time at the hearing.

Do You Have to Attend?

Yes. Under PD 51ZE, attendance is compulsory for defended fixed-sum small claims. If you refuse or fail to attend without good cause, the judge can:

• Strike out your statement of case (your defence or claim disappears)
• Impose cost penalties under CPR 27.14(2)(g) for unreasonable conduct

These sanctions apply regardless of whether you would have won at trial. "I didn't think mediation would work" is not good cause for non-attendance.

Good cause for non-attendance includes serious illness, a genuine emergency, or circumstances beyond your control. Notify the mediation service as early as possible if you cannot attend — rescheduling is usually possible.

Preparing for Mediation

Mediation is most effective when you arrive prepared:

• Know your bottom line. What is the minimum settlement you would accept? What would you offer to close the case today?
• Gather your key evidence. You will not formally present evidence, but being able to reference specific invoices, photos, or correspondence strengthens your negotiating position.
• Be realistic about the hearing. Mediation saves both sides the stress, time, and uncertainty of a hearing. A settlement at 80% of what you might win at trial, delivered now and without risk, is often the better outcome.

If Mediation Fails

The case proceeds to a hearing. The judge will not know what was discussed in mediation — it is confidential. Your defence and the claimant's case are decided purely on the formal evidence and statements filed with the court.

The England & Wales Money Claim Response Guide includes a mediation preparation sheet and covers the full path from initial response through mediation to the hearing.

See more England and Wales guides →