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solving disputes in County Courts - Browne Jacobsons response

4 July 2011
Browne Jacobsons response

Browne Jacobson has submitted its response to the Government consultation Solving disputes in the County Courts. The consultation aims to "tackle the perceived compensation culture, restore proportionality in costs for court users… and propose cheaper, quicker alternative dispute resolution where appropriate". The consultation deals with many of the procedural issues proposed by Lord Justice Jackson in his final report. The proposals include:

  • extension of the existing road traffic accident (RTA) personal injury claims scheme
  • increases to the small claims and fast track limits
  • fixed fast track costs
  • mandatory pre-action directions
  • mandatory mediation
  • new restrictions on enforcement, and a streamlined process
  • creation of a unified County Court system.

Procedure and costs

We support extension of the existing RTA Personal Injury (PI) claim scheme to include higher value claims. The scheme has proved effective as a means of promptly resolving a substantial proportion of the claims passing through it and at a more proportionate cost than would otherwise be the case. However, we are concerned that any extension should be carried out in consultation with Portal Co to ensure that the online portal which underpins the process is in a position to handle the increased volume of claims. We favour an increase to £25,000 in the first instance which would not require substantive changes to the process. However, we do accept that it may be appropriate to review stage 2 and stage 3 type B and C costs as there is more likely to be increased volumes of quantum evidence. We suggest that Prof Fenns costs analysis, prepared for Lord Justice Jacksons review, may be an appropriate starting point.

We also consider that, with minimal modification, the process can be made to accommodate employers liability (EL) claims. These have many similarities to motor claims, in terms of the existence of mandatory insurance, the recently introduced Employers Liability Tracing Office (ELTO), and mandatory reporting, which means that in many cases decisions on liability can be taken promptly. We suggest that this be implemented initially for claims worth up to £10,000 with the possibility to extend the value range at a later date. Again, implementation should be in consultation with Portal Co and other stakeholders.

We do not, as a matter of principle, oppose further extension, for example to higher value claims or public liability (PL) claims. Our proposals are intended to achieve extension of the portal to those areas in which the cost: benefit ratio is most favourable in the first instance, with the option of extension to other areas at a later date.

For claims not falling within the portal scheme, the Government proposes reform to the conventional small claims and fast tracks. In particular, it is suggested that the small claims track limit for non PI or housing disrepair claims should be extended. We support an increase to £5,000 for housing claims and £10,000 for other non-PI claims. The Government does not consult on extension of the threshold for PI claims, but in any event the RTA scheme (if extended) will capture a large number of those claims.

Extension of the fast track limit is also proposed. The limit currently stands at £25,000. We support an increase to £35,000. Beyond that level there is frequently a need for bespoke directions and a one day trial is less likely to be adequate.

The Government also consults on implementation of fixed fast track trial costs as proposed by Jackson. Fixed costs are an effective means of providing both certainty and proportionality, and are an approach we favour. Fixed costs will necessarily vary according to the type of claim involved and to maximise costs: benefits we suggest that the focus at the outset should be to implement these in areas affecting large numbers of claims, such as RTA, EL and PL claims.

We do not support mandatory pre-action directions. The courts should exercise tighter control over pre-action behaviour under the existing protocols, via costs sanctions. In particular a failure of a party to engage in alternative dispute resolution (ADR) may, in many cases, justify sanctions. However, mandatory directions will tend to shift the focus from dispute resolution to complying with procedure, which will not encourage settlement.

Mediation is a key feature of the consultation, with proposals for compulsory mediation on the small claims track and mediation information sessions for all claims up to £100,000. No mention is made as to how these will be paid for. While we support ADR, we consider the Government has fallen into the trap of assuming mediation is always the best option. In fact, negotiation is often faster and more cost effective.

Enforcement

Regarding enforcement, the Government proposes a streamlined system placing more responsibility on enforcement providers, while also suggesting limits on the availability of certain enforcement options as a consumer protection measure. While we do consider that the court enforcement process can be streamlined, we do not consider it appropriate to remove judicial scrutiny which provides a necessary protection to debtors. On the other hand, we do not consider it appropriate that creditors enforcement options be subject to blanket exclusions. Judges discretion in granting remedies can be relied upon to provide the consumer protection that must form part of the system.

Unified County Court

The consultation also deals with reform of the County Court structure and system, to create a unified court with increased use of electronic communications. Both are reasonable suggestions. However our experience is that the courts already have difficulty in promptly processing claims submitted online and we question whether their systems can support a substantial increase in electronic filing. If they cannot, it seems unlikely that funding will be forthcoming to address this. Similarly, where courts currently have centralised business centres, we often encounter delays. A unified County Court may exacerbate the issue.

Conclusion

The consultation includes proposals which could bring real benefits to litigants, through a streamlined claims system and greater certainty on costs. However, the proposals are wide ranging and to attempt to implement them as a single set of reforms is likely to be both a length process, and one which risks teething problems such as those experienced when the RTA PI scheme was first introduced.

We believe that the focus must now be on identifying those areas where the benefits outweigh the cost so that these can be prioritised. In our view, revised track limits, fixed fast track costs and extension of the RTA PI scheme (at this stage to sub £25,000 RTAs and sub £10,000 EL claims) should be treated as priority areas for reform.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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