The Civil Justice Council has very recently released a report on its review of the small claims system. In particular it focuses upon how much court resources small claims take up and the lack of support that litigants using the courts for low-value matters actually receive.

Although the civil procedure rules for claims allocated to the small claims track are modified somewhat in an attempt to make them more simple and user-friendly, the main rules themselves which they adopt are overwhelming and unduly complicated for non-lawyers.

The report helpfully identifies that nearly half of small claims issued at court are for a value not exceeding £500, which is perhaps surprisingly low.

The report (which you can read here) focuses largely upon how claims of a value less than £500 ought to be dealt with and whether there should be unique and more simplified rules relating to those lower value claims. It also considers the small claims system generally, namely those claims usually of a value not exceeding £10,000.

Key Proposals

    The key proposals include:
  • Compulsory mediation for claims of a value not exceeding £500, meaning that a claim will be put on hold unless the parties engage in the small claims mediation service.
  • Simplified rules and greater guidance given by the courts when setting out what needs to be done by the parties.
  • Disposal of low value small claims without a trial physically at court. Instead, trials may take place on the papers alone or potentially by telephone or video. The decision as to what is necessary will be that of the court.
  • Lower value small claim trials or determinations being limited to an hour of a Judge’s time.

Updated Rules For The Small Claims System

We agree that the small claims system for resolving lower value disputes and small claims generally would benefit from being simplified, as many of the individuals and businesses dealing with claims in the small claims track, do so without legal representation.

The civil procedure rules are difficult and unfriendly. Many litigants in person will be put off from bringing a claim for fear of getting things wrong or simply not knowing what to do or expect. It has always been the case that a simplified set of rules, consistent with the main civil procedure rules, should be explored and introduced for small claims.

Second Rate Justice For Court Users With Lower Value Claims?

However, the simplification of the rules is where our agreement ends.

Other recommendations are deeply troubling and we think the true sentiment of the CJC and Working Party is set out in paragraph 3.19 of the report. That is particularly telling in what the aim is, which reads “The Working Party believes that the current rules should be amended to reassert and enshrine properly the principle of proportionality. This would also allow redistribution of necessarily finite resources to higher value claims (including other small claims)” (emphasis added). We find this very troubling especially when it is phrased to suggest a redistribution of existing resources rather than just a desire to deal with claims more efficiently. Redistributing resources to higher value claims instead suggests that those users will enjoy an improved experience to the detriment of other court users.

Clearly, the Judges and politicians do not want to have to deal with, or incur the time and cost of having to resolve low value disputes, where the parties are often fighting cases without legal representation. Claims by litigants in person often are more messy and require greater work by the Judge to resolve, as everything might not be in as good an order had solicitors and barristers been involved.

Politicians would rather the limited resources and money the court system has, concentrate on the higher value claims. In short, they want to ensure that the more affluent court users, such as big businesses, get the best possible service. Whereas, those wanting to resolve lower value disputes will have to put up with cheap and cheerful dispute resolution, with a potentially restricted opportunity to to put their case to a Judge at a trial and with less opportunity to appeal a decision should a party wish to do so.

A claim between individuals over £500 might be even more proportionate and impactful to those parties, than a dispute over £50,000 between two wealthy companies.

Compulsory Mediation

The courts have previously been reluctant to force mediation upon parties. Ultimately, it ought to be a choice for the parties involved whether to mediate or not. However, matters resolving at mediation can free up a huge amount of judicial time if it means a matter does not have to go to trial. The mediators working on cases will no doubt be paid a great deal less than Judges dealing with claims at trial.

The report recommends that in claims not exceeding £500 the parties must mediate or the claim be put on hold. Presumably this would only be if the Claimant refused to mediate, as otherwise a Defendant could use this to technically stall and stop the claim dead.

Restrictions On Trials And Appeals

Whilst there are some useful recommendations of the CJC and Working Party within the report, we think the potential of claims being dealt with and resolved on the papers only, strays dangerously into removing access to justice and could prejudice the potential of a fair outcome and decision. For claims disposed of on the papers alone, those parties who can set their cases out more clearly in writing and documents may have a crucial advantage over an opponent that struggles with communicating in writing but would be able to explain and expand upon their position better orally at trial if given that opportunity.

Disposing of claims on papers alone also deprives the parties of the opportunity to cross examine witnesses. It would dumb down the process greatly and remove some of the key stages of the trial process.

The report suggests that Judges could allow evidence by telephone or video if the court considers it necessary but that it would be for the court to decide. The courts have a huge volume of work to get through so must be inclined to list matters for paper determinations as much as possible. When this decision would be made and who by is unclear. At allocation (after the claim form, defence and directions questionnaires are with the court) or after the evidence has been filed? By a Judge or by a member of the court administration?

It also proposes that if there is a trial hearing, that it should not exceed an hour. That is a terribly short period of time for a Judge to even read the statements and documents, let alone make a decision and give judgment. It also ignores that some cases will have issues more complex than others. It would be very swift justice and would undoubtedly lead to some rough justice too, at no fault of the Judges having to deal with trials within such a short time restriction.

There is also the recommendation that lower value claims, have a more restricted right to appeal. Again, an impact on access to justice.

Small Claims System CJC Report – Conclusion

Whilst the economic case and argument of proportionality is understood, should the value of a dispute really drastically impact the resolution of a dispute when compared to higher value claims? We think not and consider the restrictions would be an affront to access to justice.

A risk here is also that if restrictions are placed on claims up to £500, that it will only be a matter of time until there is an attempt to impose those upon the small claims system generally, namely all claims up to £10,000. It would be testing the water before a wider roll out.