County court: small claims push
The government is to take an unexpectedly cautious approach to extending the road traffic accident (RTA) portal regime and has ditched the idea of mandatory pre-action directions, it announced today.
In its long-awaited response to the Solving disputes in the county courts consultation, the Ministry of Justice (MoJ) said that while it will increase the upper limit of the portal to cases worth up to £25,000, “consideration will be given to the timing of the extension, following a full evaluation of the existing RTA PI scheme”.
This has been a key demand of claimant groups given that the portal only went live two years ago.
Similarly, while it confirmed the plan to create a similar scheme to cover employers’ and public liability claims, “further consultation with key stakeholders will be required to agree the detail”. The MoJ said it is aware of specific concerns raised in relation to issues of causation and contributory negligence.
It will also work closely with the NHS Litigation Authority and the Department of Health to evaluate their pilot scheme for clinical negligence claims before considering the introduction of a similar scheme for low-value clinical negligence claims.
More generally the MoJ said it intends to extend the system of fixed recoverable costs, “subject to further discussions with stakeholders about details of how best to extend, to include claims up to a higher value and across a broader range of personal injury”.
The MoJ said that many of the 319 respondents felt that the existing pre-action protocols were sufficient without having to develop mandatory fixed-fee pre-action directions for money claims under £100,000, as had been proposed.
“On balance therefore, the government does not recommend the development of mandatory pre-action directions until we have considered the effectiveness of the current pre-action protocols and whether and how these could be simplified to ensure a more streamlined and cost-effective process.”
As first revealed by Legal Futures yesterday, the small claims limit will double to £10,000, with a view to moving it to £15,000 after full evaluation of the increase. There will be no change to the current limit for personal injury and housing disrepair claims.
Judges will also be allowed to refer business-to-business disputes and other suitable cases with a value over £10,000 to the small claims track wi
thout requiring the consent of the parties, while more complex cases worth less than £10,000 could be pushed up to the fast-track if appropriate.
All small claims will be automatically referred to mediation – although initially it will only be for cases worth up to £5,000 – but the MoJ stressed that this is a requirement to engage with a mediator, rather than compulsory mediation. Parties will also be able to agree that a judge can decide their case on the papers.
There will not be a mandatory mediation information session for higher-value claims, but the MoJ is to investigate how to improve awareness. It added: “The Ministry of Justice also plans to work with the Law Society to better reinforce the role of the legal profession, when discussing options with their clients, to explain whether mediation or some other ADR procedure may be more appropriate than litigation, since this is already stated in the ‘client care guidance’ of the Solicitors Code of Conduct.”
There are also to be various structural reforms, including establishing a single county court across England and Wales.
The fast-track limit will remain at £25,000, but the government will increase the financial limit below which equity claims may be commenced in the county courts from £30,000 to £350,000, while the financial limit below which non-personal injury claims may not be commenced in the High Court will be increased from £25,000 to £100,000.
Specialist claims – for variation of trusts, certain claims under the Companies Act and other specialist legislation, such as schemes of arrangement, reductions of capital, insurance transfer schemes and cross-border mergers – will be removed from the jurisdiction of the county courts and placed under the exclusive jurisdiction of the High Court.
High Court judges will be able to sit as a judge of the county court as the requirement of business demands.
There are also plans for a range of measures to improve debt recovery and enforcement, including allowing charging orders in applications where instalment orders are in place and introducing a minimum threshold of £1,000 in applications for orders for sale, but limited to Consumer Credit Act debts.
Justice Secretary Kenneth Clarke said: “Without effective civil justice, businesses couldn’t trade, individuals couldn’t enforce their rights, and government couldn’t fulfil its duties.
“But individuals and businesses tell me that the civil justice system at the moment can sometimes be intimidating and that they don’t know if using the system will be worth the time, expense and hassle of going to court.
“These changes will produce a service that helps people to resolve their disputes effectively and in the simplest and quickest way possible so they can get on with their lives and businesses.”
