The government has just published its response to its consultation on county court reforms. It is another piece in the jigsaw of civil litigation reform commenced by Lord Justice Jackson, although it still remains to be seen what the whole picture of reform will actually look like.
The key features of the response are as follows:
- Increasing the financial limit for allowing non-personal injury claims to be commenced in the High Court from £25,000 to £100,000.
- Increasing the small claims limit to £10,000 and possibly subsequently increasing it to £15,000.
- Extending the system of fixed recoverable costs for claims up to a higher value and across a broader range of personal injury - so the amount a winning litigant can recover from its opponent in respect of costs is fixed irrespective of the amount actually incurred.
- All small claims to be automatically referred to mediation (but in the first instance only those claims up to £5,000).
- A raft of enforcement improvements to be implemented (allowing charging orders in applications where instalment orders are in place; introducing a minimum threshold of £1,000 in applications for orders for sale for Consumer Credit Act debts; improvements to attachment of earnings and tracing orders; streamlining of procedures for obtaining Third Party Debt Orders and Charging Orders; the introduction of Information Orders and Information Requests).
- The establishment of a single county court, operating as a single national entity for England and Wales, to replace the current county court structure by removing the geographical and jurisdictional boundaries from each county court.
- Extension of the RTA PI Scheme (for personal injury claims caused in road traffic accidents) to £25,000, and to employers’ and public liability claims (and possibly low value clinical negligence claims) - this is a scheme providing for fixed recoverable costs payable by the losing party, and a fixed success fee if conditional fee agreements are involved.
- The changes will affect smaller business disputes up to £100,000. Overall they appear sensible but there is a big question mark over whether the county court administration and judiciary can function efficiently with the increased workload under this new regime, and although the fixed recoverable cost regime is to be extended, crucially, there is no explanation of how it will work.
The increase in the threshold for issuing non-personal injury claims in the high court will mean that all commercial claims up to £100,000 will now proceed in the county court. The potential problem for business users is that the county court administrative system has hitherto not been as smooth as the high court, with delays and adjournments occurring too often.
The increase will bring more cases within the county court system. The increase in the small claims track limit from £5,000 to £10,000 (and with a further increase to £15,000 likely to follow) will have the effect of bringing a lot more of the cases handled by the county court into the small claims track. This means that few parties to these claims will have solicitors acting as costs are not recoverable and so dramatically increase the burden on the judiciary and court staff of dealing with more litigants in person. The concern is that with the increased burden on court staff and systems, it will impair the county court’s ability to deliver a speedy and effective service to other users, particularly business users.
The structural changes being proposed and implemented do not eliminate these concerns; in fact problems with the Salford Civil Claims Centre and recent job cuts at the courts serve to heighten the fears.
The government has decided not to pursue its original proposal for mandatory pre-action directions for claims under £100,000, which was intended to give greater force to the current pre-action steps which litigants are expected to take before they issue proceedings. This is not surprising, as it was very difficult to see how the proposals would have worked, and it appeared to go directly counter to the Jackson recommendation to reduce the burden of pre-action protocols.
Referral of all claims to a small claims mediator falls short of requiring compulsory mediation, but it may be de facto compulsory mediation. This is a pragmatic response by the government to try to cut down on the cases referred to a judge and whilst compulsory mediation is generally not a good idea, this proposal seems to be a sensible and commercial approach to these small claims.
Of particular interest now will be to see how the new fixed recoverable cost regime will work. It is not clear whether this will extend to all claims up to £100,000 or just certain claims. It is not clear what the government is planning on this and the consultation document is surprisingly vague on what is likely to be a very important issue. No firm view on the reforms can be formed without understanding exactly what is proposed here.
The government consultation document and the response can be accessed here: http://www.justice.gov.uk/consultations/consultation-cp6-2011.htm