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Move with caution: The Government’s response to the ‘Solving disputes in the county courts’ consultation

The Government has today published its response to the consultation paper ‘Solving disputes in the county courts: creating a simpler, quicker and more proportionate system’ that was published on 29 March 2011. 

A total of 319 responses were received from legal professionals, mediators, insurers, members of the public and more. The consultation period closed on 30 June 2011 and the Government’s response summarises these responses. 

The consultation paper was aimed at improving our civil justice system which, despite its strengths, has not been working as well as it should have.

Kenneth Clarke MP states, in the introduction to this report:

“Our aim is to deliver a system that prevents the unnecessary escalation of disputes before cases reach the courtroom; where courts offer quicker and more efficient services where they are needed; where judgments can be enforced fairly; and where costs are borne in a fair way.” 

The proposals: 

Preventing cost escalation 

  • Extending the financial limit of the RTA PI scheme, and introducing similar schemes for other personal injury claims.

It is important to note however, that whilst the Government plans to increase the financial limit (to £25,000) this is going to be done with caution, and only after a full evaluation of the current scheme, to be followed by publication of final impact assessment of the proposed increase.

Extending the scheme to EL/PL and low value clinical negligence claims is also going to be carefully considered, and will not be introduced until further consultation/evaluation has taken place.

  • Developing mandatory pre-action directions for money claims under £100,000.

The Government decided to halt plans to develop mandatory pre-action directions at this stage. Instead, it is going to consider the effectiveness of the existing pre-action protocols and simplify them to ensure a more streamlined and cost effective process.

  • Implementing a system of fixed recoverable costs, similar to that proposed by Jackson LJ in his report. 

The Government intends to extend fixed recoverable costs to include higher value claims and a broader range of personal injury claims.  This will be preceded by detailed discussions with stakeholders.

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  • Increasing the small claims track limit to £10,000.

A further increase, to £15,000, is indicated to follow, after a full evaluation of the initial increase (to £10,000) has taken place.

Please note that there will be no change to the current limit for PI claims.

The Government proposes to change CPR r. 26.7(3), to allow the judiciary to refer business-to-business disputes and other suitable cases with a dispute value over £10,000 to the small claims track without requiring the parties’ consent.  Furthermore, the judiciary will have the option of referring more complex cases with a value of less than £10,000 to the fast track, if appropriate.

The fast track limit is not going to increase at this stage.

Alternative Dispute Resolution 

  • All small claims to be automatically referred to mediation.

However, as further analysis and development is required, at this stage, only cases with a value of up to £5,000 will be automatically referred to mediation, with a view to increase the referral limit to £10,000 in the future once the scheme has become established.

The Government proposes to assess the effectiveness of mediation delivered by telephone, face-to-face, web and hard copy formats at various stages of the pre and post issue process, and work closely with the Law Society – all in the name of education and encouragement to mediate.

It is proposed that parties in low value small claims should be given the opportunity to choose whether their small claim is determined on paper – if the judge agrees that is appropriate in the circumstances.

The use of telephone hearings in small claims cases is not taken forward until more reliable technological options are available to courts.

Debt Recovery 

  • The procedures for the obtaining of third Party Debt Orders and Charging Orders will be streamlined. 

Structural Reforms 

  • A single county court, operating as a single national entity for England and Wales, will be established. 

For more information, please contact: adi.frankovitch@horwichfarrelly.co.uk

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