Solving disputes in the county courts: creating a simpler, quicker and more proportionate system

Transcription

1 Solving disputes in the county courts: creating a simpler, quicker and more proportionate system Questionnaire We welcome responses to the following questions set out in the consultation paper. We would be grateful if you would consider, in the first instance, responding via the on-line questionnaire at: However, if you prefer, you can return this questionnaire by to civiltj@justice.gsi.gov.uk or in hard copy to Judith Evers, Ministry of Justice, Post point 4.12, 102 Petty France, London, SW1H 9AJ. Please send your response by 12:00 noon on 30 June About you Full name Kate Lotts Job title (or capacity in which you are responding to this consultation exercise) Academic Advice sector/debt Adviser Bank/Financial Institution Business/Commercial Claims Management Company Consumer Representative Organisation Government Department/Non-Departmental Public Body Insurer Judiciary Legal Profession Local Authority Mediator/Mediation service provider Member of public Other please specify Company name/organisation (if applicable) Weightmans Weightmans is a Top 40 law firm, having one of the largest national defendant litigation solicitor practices dealing with motor, liability and other classes of claim for clients from the general insurance industry, other compensators including the NHSLA and self insured commercial and public sector organisations such as Local Authorities and Primary Care Trusts. Alongside this is a large commercial practice dealing inter alia with commercial dispute resolution and debt recovery for a wide range of corporate and public sector bodies. We have canvassed the views of many clients to assist in shaping this response. Address Postcode India Buildings Water St Liverpool L2 0GA Solving disputes in the county courts questionnaire (03.11) 1 Date 29/06/11

2 Section 2 Preventing cost escalation Question 1: Do you agree that the current RTA PI Scheme s financial limit of 10,000 should be extended? EXECUTVE SUMMARY In tracing the reform journey from Woolf through to 'Case Track Limits and the Claims Process for Personal Injury Claims' to the Jackson Response and the latest 'Solving Disputes in the County Court' consultation, a number of clear themes emerge. These include : - settling genuine claims more quickly - replacing complexity, bureaucracy and inefficiency with a simple, straightforward and streamlined system - expecting parties to take more ownership of dispute resolution, with courts a long stop solution - more proportionate (ie lower) claimant legal costs - the need for claimant lawyers and defendants ( insurers and others) to adapt their business and operating models to accommodate and deliver these reforms. - the need to educate parties on the changing landscape and processes The Jackson Response and the latest 'Solving Disputes in the County Court' consultation need to be viewed and implemented as an interlinked package of changes. Whilst the overall direction is correct, progressive and supportive of the themes above, there needs to be a transparent route map for implementing the intended Jackson reforms and any additional changes flowing from the latest consultation. The interrelationships and dependencies need to be fully understood so that actions are sequenced appropriately, to achieve early and effective delivery. The MoJ need to share their master plan with all stakeholders. The Woolf Reforms demonstrate the consequences of incomplete and/or fragmented implementation. There is also much to consider and learn in terms of use of sanctions to manage adverse behaviours by any party. A report by Datamonitor forecasts that personal injury claims' costs will rise from 8.4bn in 2010 to 9.7bn in The potentially beneficial changes flowing from the Government's response to the Jackson Report have been factored in, slowing the rate of increase, but there is clearly still much to be done to tackle the levels of claimants' legal costs which are a significant inflationary driver of claims costs overall. Deloittes have also just reported that underwriting losses in the motor insurance industry exceeded more than 2bn last year. They found that insurers lost 20p for every pound of premium earned and posted a net combined ration of 120% compared to 119% in Qu. 1 Anecdotally, the RTA PI Scheme seems to be meeting its key objectives of delivering compensation to genuine claimants more quickly, with reduced legal costs. Data to confirm this is required. Extending the financial reach of the scheme will open up these benefits to more claimants. Any change which helps control personal injury claim costs, positively impacting the taxpayer or premium costs for insuring consumers and businesses should be supported. Some stakeholders are concerned about extending the RTA PI Scheme beyond 10,000 at this stage - using the analagy of releasing a new drug before the long term effects are known. Question 2: If your answer to Question 1 is yes, should the limit be extended to: (i) 25,000 (ii) 50,000 or (iii) some other figure (please state with reasons)? Solving disputes in the county courts questionnaire (03.11) 2

3 We believe that extending the scheme to 25,000 would actually cover around 98% of RTA personal injury claims ( an additional 7 percentage points). At this level, we believe that claims can be accomodated within the current Pre - Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents ( the RTA Pre Action Protocol) and CPR ( see Q 5) and existing IT solutions. Above this level, there are limited claim numbers and claims may well have more complex features.there are benefits in aligning the limit for the RTA PI Scheme to any wider Fixed Fee framework as suggested by Jackson LJ ( see Q 12), offering cost and also process certainty around a clearly defined group of cases. Apart from a financial uplift, the scope of the current RTA PI Scheme should be retained. If it is felt, contrary to our view, that changes to the process are needed, triggering either paper changes to the RTA Pre Action Protocol and CPR and/or associated IT changes for either the Portal or end users, then the benefits associated with such an extension may well become more questionable. Subject to the extent of any changes needed, it may then be better to retain the limit at 10,000 and focus activity, for RTA claims, on agreeing an extension to the current Predictable Costs regime. ( see Qu. 12) Question 3: Do you consider that the fixed costs regime under the current RTA PI Scheme should remain the same if the limit was raised to 25,000, 50,000 or some other figure? If the limit for Motor was increased to 25,000, the activity required to complete Stage 1 would not vary and so the fixed costs of 400 should be retained. Similarly for Stage 3 - so no change would be necessary for Stages 1 and 3. Cases of increased value may require some additional work by the claimant lawyer and a modest uplift on the current 800 fixed cost fee may be appropriate for cases falling between 10,000-25,000 - see Q 4 The fixed costs regime for the current RTA PI Scheme should also provide the basis for any extension of the scheme horizontally into Employers and Public Liability claims, particularly for Stages 2 and 3. It should be noted that referral fees ( following the decision of the Legal Services Board on Referral Fees on 27/5/11) will still be incorporated within these figures - but for these, the true cost of doing this work would be substantially less. Banning referral fees would trigger the need for a reduction in these fees. Question 4: If your answer to Question 3 is no, should there be a different tariff of costs dependent on the value of the claim? Please explain how this should operate. Yes No Any change to Stage 2 costs to accommodate higher value claims should not serve to increase costs for the vast majority of cases < 10,000. Further any change must guard against over complicating the simple costs framework already operating and should not be linked to any factor that could have an adverse behavioural impact eg number of medical reports. One option could be to have a Stage 2 fixed fee for cases in the range 10,000-25,000 ( eg 950) alongside the current fixed fee of 800 for < 10,000 cases, or alternatively a blended rate across the total value band. Solving disputes in the county courts questionnaire (03.11) 3

4 Question 5: What modifications, if any, do you consider would be necessary for the scheme to accommodate RTA PI claims valued up to 25,000, 50,000 or some other figure? We believe that the current Pre Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents and the CPR adequately cater for any extension in the financial threshold to 25,000, including medical reports and interim payments (but it may be appropriate to increase the automatic interim threshold from 1,000 on the more expensive claims > 10,000 to say 1,500 and this should simply be a 'paper based' change. Alternatively there is already the option to ask for a higher sum and this could work for the higher value claims. ) It is already possible to obtain four initial medical reports. During the earlier work on the current RTA PI Scheme, it was established that on cases < 10,000 the average was below 2 medical reports per claim. The ability to handle more expensive motor personal injury claims is thus already designed into the RTA PI Scheme. It may be helpful to expand the injury description at 1.1 on the CNF to accommodate any higher value cases. The Scheme is designed to be simple, quick and efficient - extending the financial reach to 25,000 requires that the same principles are applied eg no medical records obtained. Any personal injury claims falling within the increased financial limit must also be transacted through the secure, electronic portal, which must have the capacity to handle the increased volume. The Pre - Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents and the CPR will need to be reviewed and/or amended in the light of the Jackon Response eg removing recoverability of success fees and ATE. There may also be the opportunity to look at any improvements needed based on the operation of the scheme to date - eg anecdotally there is delay between Stage 1 and receipt of the Stage 2, settlement pack and if this is so, an option could be to pay both Stage 1 and Stage 2 fixed fees at the end of Stage 2. Alternatively the Stage 1 fee could become payable on receipt of the Stage 2 pack Anecdotally there are also examples of multiple lawyers submitting a CNF for same claimant/accident and cases where Stage 1 activity is completed with fees paid but no further activity. There also seems to be a growing numbers of cases where the claimant lawyer is seeking not to use the RTA Pre Action Protocol and Portal on < 10,000 claims. The opportunity to more clearly define sanctions for adverse behaviours by either party should be explored. Question 6: Do you agree that a variation of the RTA PI Scheme should be introduced for employers & public liability personal injury claims? Introducing the RTA PI Scheme into Employers' and Public Liability claims will enable more genuine claimants to get compensation more quickly at lower (legal) cost. This will also help manage the overall cost of claims for the taxpayer, businesses and consumers, whether via public bodies, insurance premiums or otherwise. Such an extension should be grounded on the current RTA PI Scheme which is apparently working well, substantially mitigating any change risks. Particular categories of claim would be particularly well suited to such a variation eg EL accident, Public Liability Occupiers Liability and slips and trips. We believe any extension should be limited to accident claims, both EL and PL. Certain claims and claim types should be excluded such as disease claims, abuse, stress and harassment claims and multi defendant claims. Any exceptions though should be tightly drawn so as to optimise the number of claims entering the process via a CNF, giving the defendant the opportunity to settle the claim if so desired, or reject same if liability is not accepted. If the claim has a potential contributory negligence argument, it should be submitted via a CNF, with the defendant having the opportunity to either accept the claim or cause the claim to exit the process at Stage 1 ( as with the RTA process) Solving disputes in the county courts questionnaire (03.11) 4

5 Question 7: If your answer to Question 6 is yes, should the limit for that scheme be set at: (i) 10,000 (ii) 25,000 (iv) 50,000 (v) some other figure (please state with reasons)? We believe that the limit for both Employers' and Public Liability (EL and PL) claims should initially be 10,000. This would catch around 82/83% of EL and PL accident claims, enabling benefits to be delivered to many claimants, whilst allowing any new process to bed in, as with Motor. Some clients though wished to see a higher start point, up to 25,000. We believe that the Pre - Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents and CPR already accomodates the handling of more expensive motor personal injury claims within the process. So with a similar Pre Action Protocol and CPR, EL and PL limits could be extended after a review period, as with Motor. Some clients, ( insurers, local authorities and larger corporates) though do want to see any extension for EL and PL claims to start at 25,000, aligned to any Motor extension. Question 8: What modifications, if any, do you consider would be necessary for the scheme to accommodate employers and public liability claims? A Any EL/PL claims falling with the RTA PI Scheme extension should be transacted through the secure, electronic Portal, ( apart from claims from English NHS bodies) which must have the capacity and the capability to handle increased volumes from Day 1. Employers' Liability : The introduction of ELTO will facilitate the identity of the insurer for accident claims. A effective CNF will be key (as with Motor) and we attach a draft for consideration which inter alia asks the claimant to identify any documentation that he/she believes exists such as an accident book entry. All insurers should be registered on the Portal, identifying any handling organisation as appropriate. Based on the CNF, the insurer should decide whether the accident can be identified to enable the CNF/liability investigaton to be progressed. If the accident cannot be identified, the claim would fall out of the process and the claimant may need to make a Pre Action Disclosure request. An effective CNF will support front end fraud detection activities, as with the Motor CNF. Stages 2 and 3 would mirror current RTA PI Scheme processes and should attract the same cost regime. Some modest additional work may be needed to complete the CNF so an uplift to Stage 1 costs would seem appropriate - perhaps 500 rather than 400. We would suggest a period of 30 working days for defendants to investigate liability, with an additional 5 working days if the CNF is received more than 6 calendar months from accident date. The timelines for Stage 2 ( including any Stage 3 pack) found in the RTA PI Scheme should be retained. It should be noted that referral fees ( following the decision of the Legal Services Board on Referral Fees on 27/5/11) will still be incorporated within these figures - but for these, the true cost of doing this work would be substantially less. Banning referral fees would trigger the need for a reduction in these fees. Public Liability : PL is not covered by compulsory insurance so the claimant and his lawyer can today face challenges in identifying the defendant and any insurer. Extension of the RTA PI Scheme would not change this. It might be worth looking at whether PL cover should be compulsory. All PL insurers along with self insured corporates should be pre - registered on the Portal (with perhaps the option to also register at the point of claimant lawyer approach). As with other classes, the quality of the CNF is key to enable the incident to be readily identified, to allow the defendant to investigate the claim and make a Stage 1 decision and to support fraud detection. A draft CNF is attached for consideration. Stages 2 and 3 would mirror current RTA PI Scheme processes and should attract the same cost regime. Some additional work may be needed to complete the CNF so an uplift to Stage 1 costs would seem appropriate - perhaps 600 rather than 400. We would suggest a period of 40 working days for defendants Solving disputes in the county courts questionnaire (03.11) 5

6 to investigate liability, with an additional 5 working days if the CNF is received more than 6 calendar months from accident date. The timelines for Stage 2 ( including any Stage 3 pack) found in the RTA PI Scheme should be retained. It should be noted that referral fees ( following the decision of the Legal Services Board on Referral Fees on 27/5/11) will still be incorporated within these figures - but for these, the true cost of doing this work would be substantially less. Banning referral fees would trigger the need for a reduction in these fees. For both EL and PL, Stage 1 costs should be payable together with Stage 2 costs at the end of Stage 2, to help mitigate the risk of 'frivolous' claims and avoid some of the behavioural issues seen within the RT PI Scheme Whilst the principles of simplicity, efficiency and speed which underpin the RTA PI Scheme should be retained for any EL and PL extension there are some changes that could be considered : - the ability to include additional information with the CNF eg sketch plans and photographs for PL tripping accidents - including the claimant's medical records with the CNF, to offer contemporaneous evidence as to the accident and to facilitate Stage 1 activity - as an alternative, the defendant could signal as part of the Stage 1 reply whether medical records required either as part of the medical examination and/or the Stage 2 pack - another alternative could be to amend the Medical Reporting template to give the medical expert the option to call for medical records as needed Once the process is agreed, this needs to be accurately translated into any new Pre Action Protocol with any associated CPR changes, ensuring that the combination of any new Pre Action Protocol and the CPR do reflect the agreed process. The current RTA Portal may be capable of being easily adapted to cover further classes of claim - but the IT requirements should follow the agreed documetation of the process within any new Pre Action Protocol and CPR. This will all avoid the issues encountered in earlier RTA activity. As a general principle, leveraging the earlier work done for RTA claims as far as possible should facilitate earlier delivery timelines. Any extension of the RTA PI Scheme into EL and PL will require both claimant lawyers and insurers/compensators to make changes to their processes, people and systems and it is important that there is openness, transparency and realism in the timelines and that the detail is shared as soon as possible to support stakeholder education, change activity and implementation planning. Question 9: Do you agree that a variation of the RTA PI scheme should be introduced for lower value clinical negligence claims? The evidence is that the motor portal is working effectively, increasing speed of resolution and saving costs. These are both themes that injured patients and their representative bodies, claimant and defendant lawyers (to varying extents) and the NHSLA have sought to achieve for some time. The NHSLA piloted a low value scheme Resolve in 2002, which was described by one claimant practitioner as "quicker, cheaper and less emotionally fraught than the traditional methods". The intention has remained to formalise such a scheme through "Making Amends" and Redress and most recently in Lord Young's report "Common Sense Common Safety". The scheme is in line with the NHS Litigation Authority's stautory framework to " minimse the overall costs of clinical negligence..to the NHS and thus maximise the resources availalble for patient care by settling justifed actions efficiently " and it is clearly sensible for the scheme to be consistent with that in other areas of personal injury. Solving disputes in the county courts questionnaire (03.11) 6

7 Question 10: If your answer to Question 9 is yes, should the limit for the new scheme be set at: (i) 10,000 (ii) 25,000 (iii) 50,000 or (iv) some other figure (please state with reasons)? This limit would capture a relatively high proportion of claims. These are cases where the issues of say causation may be no less difficult or involved than those of higher value but where the costs are highly likely to be disproportionate (in line with the Jackson findings) to the damages recovered and where there are modest if any claims for special damages particularly care. Cases above that limit, with implementation of the Jackson reforms, should be conducted outside the portal at proportionate cost with a view to extending the limit if a pilot at this level is shown to be successful and likely to continue to be so at higher levels of damages. Question 11: What modifications, if any, do you consider would be necessary for the scheme to accommodate clinical negligence claims? The principal difference from motor or EL/PL claims is that liability in clinical negligence cases is essentially based on peer review under the Bolam/Bolitho test so that expert evidence is required to reach a decision. In addition, where the claimant - almost inevtibaly by virtue of his contact with a healthcare professional - already suffers from some illness or injury, which may or may not have been cured or progressed with all proper care, causation expert evidence in another specialty may be required. A simple example would be a failure to, or delay in diagnosis of a fracture in A&E which would require expert evidence on breach of duty from an A&E/ emergency medicine consultant whilst causation and condition and prognosis evidence as to how this has affected the outcome, will be required from an orthopaedic consultant. The medical records from the treating healthcare provider and perhaps from another - such as the claimant's GP where the defendant is an NHS trust - will be required. With reducing resources especially in administrative functions within the NHS there will be issues to address as to the time limits within which the relevant information can realistically be available. There may be other relevant documents such as protocols and guidelines - in the example above this might include the guidelines for peforming or reporting x-rays at the relevant hospital. Question 12: Do you agree that a system of fixed recoverable costs should be implemented, similar to that proposed by Lord Justice Jackson in his Review of Civil Litigation Costs: Final Report for all Fast Track personal injury claims that are not covered by any extension of the RTA PI process? Extending the Fixed Fee Regime for cases up to 25,000, both pre and post litigation, other than for cases settled within any extension to the RTA PI Scheme, increases cost certainty for all parties and has the potential to deliver the over-riding reform objectives of more proportionate legal costs. The framework contained in Appendix 5 of the Jackson LJ Final Report offers a potential starting point - but the framework effectively codifies the current costs regime with its inherent disproportionality issues. As such the starting point for any fixed fee framework could be modelled on Appendix 5, but with lower legal cost points. The framework should also avoid creating adverse behavioural incentives by enabling claimant lawyers to cherry pick favourable cost points. For example, some courts apparently address allocation at an early stage, enabling a case to move swiftly up the process ladder as drafted, securing early addditional costs. Solving disputes in the county courts questionnaire (03.11) 7

8 There should be no assumption as to year on year increases in the 'base' figures, to drive ongoing efficiencies. The link to damages will create an ongoing uplift anyway. The base costs in the RTA Predictive Costs framework have not been increased since inception, but the marked increase in referral fees payble over that period has demonstrated that ongoing efficiences can be delivered by claimant lawyers and this efficiency drive should be sustained. The inability of claimant lawyers to recover success fees from defendants should not be factored into any fixed fee framework ( or underlying hourly rates) - the claimant lawyer will have funding options to discuss with the client, with possible recovery of a success fee, up to 25%, from clients funded by an increase i PSLA. Fixed fee regimes need to be simple and easy to use with any exceptions minimised. Any pleadings type work should be included within the fixed fee - the claimant lawyer is best placed to decide how to spend the fixed fee. Their business models must adapt - historic reliance on counsel for comparatively simple pleadings should cease where lawyers hold themselves out as specialist and accredited personal injury firms. It will be important to consider how best to sequence the various change activities envisaged through the Solving Disputes consultation and the Jackson Response - removing recoverability of success fees from defendants, extending the scope of the RTA PI Scheme and associated fixed costs regime, and introducing a new Fixed Fee framework for cases outside the extended RTA PI Scheme. Extending the RTA PI Process for both Motor, and El and PL with the associated fixed cost regime can provide the starting point. Fixed fees are only part of the disproportionate legal costs issue - there also needs to be focus n the underlying hourly rates. Any new Costs Council type organisation needs to have balanced stakeholder representation. Whilst the Legal Services Board has now published their decision on referral fees, the Government response is awaited. The current level of costs paid, whether within a fixed fee regime or on an hourly rate basis already provides for the payment of such fees. If the fixed fee regime is extended as proposed, to support the policy objective of more proportionate ie lower claimant legal costs, then claimant lawyers will need to get more efficient, reduce margins and/or reduce the level of referral fee payable. If referral fees are banned, then the costs in the system supporting these fees must be removed in addition to the other cost reduction proposals. Question 13: Do you consider that a system of fixed recoverable costs could be applied to other Fast Track claims? If not, please explain why. Assuming that the fees are set at the appropriate level, then such a change would support the reform objective of more proportionate ie lower claimant legal costs. Fixed fees offer certainty to all parties - the parties should be able to precisely plot the costs, risks and benefits of settling a case at any particular point on the pre or post litigation road map. We would suggest that initial activity is focussed on extending the application of fixed fees on personal injury claims, learning from this, ahead of introducing same into non personal injury claims Solving disputes in the county courts questionnaire (03.11) 8

9 Question 14: If your answer to Question 13 is yes, to which other claims should the system apply and why? Potentially all non personal injury claims, save perhaps those where some form of remedy is sought eg specific performance Question 15: Do you agree that for all other Fast Track claims there should be a limit to the pre-trial costs that may be recovered? See response to Qu. 13 Question 16: Do you agree that mandatory pre-action directions should be developed? If not, please explain why. In principle we agree with the policy objective of putting the management and resoution of disputes in the hands of the parties to the dispute, clearly signpositing the options availale to solve the dispute with the court positioned at the end of the process. We agree that the current RTA PI Scheme can provide some useful insights However, the devil will lie in the detail - the processes around sharing of information between parties, ADR options and timelines. All this will need to be underpinned by a cost effective fixed fee regime, so as not to increase the overall legal costs bill for these claims and to avoid the risk of a deluge of frivolous applications Question 17: If your answer to Question 16 is yes, should mandatory pre-action directions apply to all claims with a value up to: (i) 100,000 or (ii) some other figure (please state with reasons)? 100,000 feels high but we recognise that Ombudsman schemes such as Financial Ombudsman currently operate at this level Given that this proposal involves the introduction of a new process stage, with the goal of rolling it out to non money claims later, it would seem appropriate to start at a lower level eg 25,000 aligned to Fast Track claims for learning purposes initially. Solving disputes in the county courts questionnaire (03.11) 9

10 Question 18: Do you agree that mandatory pre-action directions should include a compulsory settlement stage? If not, please explain why. If the goal is to put the parties to the dispute in charge of resolution of issues, then a settlement stage should be included, but at this stage at least it should not be compulsory. Parties need to have the freedom to explore alternative settlement methods ahead of any court hearing. Educating the parties will be key and if the process serves to settle more cases, a natural momentum will be created. If there was a complusory settlement stage, for non settling cases would the court need to consider whether the parties have genuinely tried to settle or just paid lip service and if so what would any sanctions look like? How would confidentiality around any mediation process work? Consideration also needs to be given as to how this could work in practice in the personal injury arena - eg much would depend on the quality of info exchanged between the parties to enable settlement and costs sanctions. Question 19: If your answer to Question 18 is yes, should a prescribed ADR process be specified? If so, what should that be? Please specify and give reasons. The parties should have the freedom to chooose from a range of options, and this would need to be supported by an easy and cheap process to provide information on options. Equally there needs to be a clear process to address cases where the parties cannot agree on an option, which in itself may create barriers to early case resolution. Any settlement agreed outside the court process must be capable of being enforced if needed Question 20: Do you consider that there should be a system of fixed recoverable costs for different stages of the dispute resolution regime? If not, please explain why. In principle yes. The fixed fee framework should encourage early dispute resolution and avoid adverse behavioural risks. The overall legal costs attaching to these claims should not increase Solving disputes in the county courts questionnaire (03.11) 10

11 Question 21: Do you consider that fixed recoverable costs should be: (i) for different types of dispute or (ii) based on the monetary value of the claim? If not, how should this operate? Please specify and give reasons. If limit capped at 25,000, there should be a simple fixed fee framework irrespective of value to avoid adverse behavioural issues. Question 22: Do you agree that the behaviours detailed in the Pre-Action Protocol for Rent Arrears and the Mortgage Pre-Action Protocol could be made mandatory? If not, please explain why. Question 23: If your answer to Question 22 is yes, should there be different procedures depending on the type of case? Please explain how this should operate. Vulnerable tenants should be protected. Solving disputes in the county courts questionnaire (03.11) 11

12 Question 24: What do you consider should be done to encourage more businesses, the legal profession and other organisations in particular to increase their use of electronic channels to issue claims? We believe that pricing could be used to incentivise use of electronic channels or disincentivise other channels, subject to equality type impacts Question 25: Do you agree that the small claims financial threshold of 5,000 should be increased? If not, please explain why. The 5,000 limit has been in place since 1999 and there will have been inflation erosion. The Small Claims Court does offer a cost effective resolution option for both businesses and consumers and increasing the limt will ensure that these benefits are sustained and in particular legal costs are proportionate to the issues in dispute. To the extent that some litigants may be using a Legal Expenses policy, the legal costs may stay in the system - just not recoverable from the losing party. There may be a case for introducing a process for regular reviews of and uplifts to the financial threshold.. Question 26: If your answer to Question 25 is yes, do you agree that the threshold should be increased to: (i) 15,000 or (ii) some other figure (please state with reasons)? A 300% uplift from current threshold seems bold, given that there is considerable uncertainty as to where the balance of benefit sits between the parties in increasing the threshold. Assuming a flat 5% inflation pa since 1999 produces a figure of 8,000 as an alternative. Whilst reducing legal costs and simplifying processes for consumers and businesses must be right, the flip side is a potential increase in 'frivolous' which despite the limited court legal cost consequences, would involve the parties in incurring costs. Solving disputes in the county courts questionnaire (03.11) 12

13 Question 27: Do you agree that the small claims financial threshold for housing disrepair should remain at the current limit of 1,000? Question 28: If your answer to Question 27 is no, what should the new threshold be? Please give your reasons. Question 29: Do you agree that the fast track financial threshold of 25,000 should be increased? If not, please explain why. Aligning the Fast Track financial limit to any Fixed Costs regime ( including the fixed costs applying to any extenstion to the RTA PI Scheme) creates cost and process certainty around a large basket of Motor, EL and PL personal injury claims - beneficial to both defendants and claimant lawyers. If the Fast Track limit were to be increased there should be a corresponding increase in the financial threshold for the overall Fixed Costs regime, again highlighting the interlinked nature of the various reforms and the need for effective sequencing of activity. Question 30: If your answer to Question 29 is yes, what should the new threshold be? Please give your reasons. N/A Solving disputes in the county courts questionnaire (03.11) 13

14 Section 3 Alternative dispute resolution Question 31: Do you consider that the CMC s accreditation scheme for mediation providers is sufficient? Mediation is just one form of ADR. Parties to a dispute should have confidence that if ADR is used, then the service provider has both the capacity and capability to offer such a service - an accreditation can help with signposting and confidence overall. If mediation or other forms of ADR are going to be used on more and/or new types of cases, then current accreditation criteria should be revisited to ensure ongoing fitness for purpose. Aside from competence in mediation/other dispute resolution skills, there may be a need to consider the need for any wider technical skills for the mediator. There should be a process to audit and ensure that the quality and assurance implied in any accreditation mark is justified. Question 32: If your answer to Question 31 is no, what more should be done to regulate civil and commercial mediators? See question 31 Question 33: Do you agree with the proposal to introduce automatic referral to mediation in small claims cases? In principle mediation and other ADR tools can operate to help resolve disputes between parties, without the need for a court hearing. Compulsion and mediation do not seem to be natural bed fellows. We would prefer to see a stronger focus on (consumer) education with more signposts to encourage the parties to use different tools to resolve disputes, building on the promising experiences to date. It is unclear how mediation capacity and capability would be sourced, managed and funded - there is a risk that overall costs of dispute resolution could increase, with elongated resolution times, frustrating reform objectives. Wider experience based on evolving successful usage, rather than 'big bang' would help address some of these concerns. Alternatively, a pilot(s) could be used to inform future activity Solving disputes in the county courts questionnaire (03.11) 14

15 Question 34: If the small claims financial threshold is raised (see Question 25), do you consider that automatic referral to mediation should apply to all cases up to: (i) 15,000 (ii) the old threshold of 5,000 or (iii) some other figure? See question 33. Question 35: How should small claims mediation be provided? Please explain with reasons. Parties should have easy and cheap access to information on a range of ADR type services available to use to solve disputes. Similarly these services should be available in a variety of formats eg face to face, telephone Question 36: Do you consider that any cases should be exempt from the automatic referral to mediation process? See question 33 - if there is no compulsory referral, then there is no need for exemption. Question 37: If your answer to Question 36 is yes, what should those exemptions be and why? N/A Solving disputes in the county courts questionnaire (03.11) 15

16 Question 38: Do you agree that parties should be given the opportunity to choose whether their small claims hearing is conducted by telephone or determined on paper? Building on experiences to date, this flexibiilty should be sustained and promoted. There needs to be a clear process for addressing cases where the parties cannot agree on a jointly preferred option Question 39: Do you agree with the proposal to introduce compulsory mediation information sessions for cases up to a value of 100,000? If not, please explain why. Information on ADR tools, including mediation, should be readily and cheaply available to parties and their representatives, supported by a (consumer) education process., without the need for compulsion, with parties reporting to the Court as now as to whether alternative settlement routes have been explored, ahead of litigation. Extending the RTA PI Scheme would pick up many cases in thhis target area, building on the sucesses of the current RTA PI Scheme, enabling cost effective and quicker settlement of cases - a compulsory mediation information process would jar with the workings of the RTA PI Scheme and any extension thereof Question 40: If your answer to Question 39 is yes, please state what might be covered in these sessions, and how they might be delivered (for example by electronic means)? N/A Solving disputes in the county courts questionnaire (03.11) 16

17 Question 41: Do you consider that there should be exemptions from the compulsory mediation information sessions? In the absence of compulsion, there would be no need for exemptions Question 42: If your answer to Question 41 is yes, what should those exemptions be and why? N/A Question 43: Do you agree that provisions required by the EU Mediation Directive should be similarly provided for domestic cases? If not, please explain why. The ability to enforce a mediated settlement will be a key enabler to the growth of mediation Question 44: If your answer to Question 43 is yes, what provisions should be provided and why? We would support the provisions listed in paragraph 169 of the Consultation document. Solving disputes in the county courts questionnaire (03.11) 17

18 Section 4 Debt recovery and enforcement Question 45: Do you agree that the provision in the TCE Act to allow creditors to apply for charging orders routinely, even where debtors are paying by instalments and are up to date with them, should be implemented? If not, please explain why. Our data indicates that the average monthly instalment payment made by debtors in respect of unsecured debts is less than one third of their contractual liability to the creditor. Given the significant increase in the repayment period, creditors should be afforded the protection of securing their debt by applying for a Charging Order. We agree, however, that a creditor should not be permitted to apply for an Order for Possession and Sale if the debtor is up to date with instalment payments. Question 46: Do you agree that there should be a threshold below which a creditor could not enforce a charging order through an order for sale for debts that originally arose under a regulated Consumer Credit Act 1974 agreement? If not, please explain why. Question 47: If your answer to Question 46 is yes, should the threshold be: (i) 1,000 (ii) 5,000 (iii) 10,000 (iv) 15,000 (v) 25,000 or (vi) some other figure (please state with reasons)? We do not believe that an Order for Possession and Sale should be allowed where a debtor is making regular instalment payments to ability. The fact that a debt originated from a liability arising out of a CCA agreement should have no bearing on enforcement post judgment. The Act provides a debtor with numerous protections during the currency of the agreement but once a judgment has been entered, the debt should be enforceable in the same way as other types of judgment. We believe that 10,000 is a suitable threshold, provided that there is no instalment payment plan in place and also provided that there is sufficient equity in the debtor's asset to ensure that the debt is paid. Solving disputes in the county courts questionnaire (03.11) 18

19 Question 48: Do you agree that the threshold should be limited to Consumer Credit Act debts? If not, please explain why. As previously stated, we do not believe that there is any justification for differentiating between CCA debts and non-cca debts once a judgment has been obtained. Question 49: Do you agree that fixed tables for the attachment of earnings should be introduced? If not, please explain why. There is currently an unacceptable divergence of approaches between County Courts. Question 50: Do you agree that there should be a formal mechanism to enable the court to discover a debtor s current employer without having to rely on information furnished by the debtor? If not, please explain why. It is currently far too easy for debtors in employment to avoid an Attachment of Earnings Order by refusing to divulge the identity of their employer. Question 51: Do you agree that the procedure for TPDOs should be streamlined in the way proposed? If not, please explain why. Our clients seldom use TPDOs currently for the reasons set out in the Consultation Paper. Solving disputes in the county courts questionnaire (03.11) 19

20 Question 52: Do you agree that TPDOs should be applicable to a wider range of bank accounts, including joint and deposit accounts? If not, please explain why. There is no logical reason why there should be a differentiation between different types of bank accounts. Question 53: Do you agree with the introduction of periodic lump sum deductions for those debtors who have regular amounts paid into their accounts? If not, please explain why. The principles are very similar to Attachment of Earnings Orders. Question 54: Do you agree that the court should be able to obtain information about the debtor that creditors may not otherwise be able to access? If not, please explain why. In our experience, the vast majority of judgment debtors do not cooperate by providing details of their financial status. Question 55: Do you agree that government departments should be able to share information to assist the recovery of unpaid civil debts? If not, please explain why. In particular, the courts should have access to DSS records so that employment information can be obtained. Solving disputes in the county courts questionnaire (03.11) 20

21 Question 56: Do you have any reservations about Information applications, Departmental Information Requests or Information Orders? If so, what are they? Question 57: Do you consider that the authority of the court judgment order should be extended to enable creditors to apply directly to a third party enforcement provider without further need to apply back to the court for enforcement processes once in possession of a judgment order? If not, please explain why. We believe that judgment creditors should be able to apply direct for earnings based deductions from an employer. Question 58: How would you envisage the process working (in terms of service of documents, additional burdens on banks, employers, monitoring of enforcement activities, etc)? We do not believe that the burden on employers will be markedly increased over and above the burden of the current Attachment of Earnings Order process. We believe that Banks will be amongst the primary beneficiaries of the proposed reforms and that therefore the increased administration will be offset by improvements in collections. Question 59: Do you agree that all Part 4 enforcement should be administered in the county court? If not, please explain why. Administration in the Magistartes Court would, we believe, lead to increased lack of cooperation on the part of debtors and confusion as to civil and criminal jurisdictions. Solving disputes in the county courts questionnaire (03.11) 21

22 Section 5 Structural reforms Question 60: Do you agree that the financial limit of 30,000 for county court equity jurisdiction is too low? If not, please explain why. Question 61: If your answer to Question 60 is yes, do you consider that the financial limit should be increased to: (i) 350,000 or (ii) some other figure (please state with reasons)? The existing limit is outdated having regard to property values. Question 62: Do you agree that the financial limit of 25,000 below which cases cannot be started in the High Court is too low? If not, please explain why. At the current level some non complex cases eg debt and contract cases, are being started in the High Court with a subsequent transfer to the County Courts, creating inefficiencies. Solving disputes in the county courts questionnaire (03.11) 22

23 Question 63: If your answer to Question 62 is yes, do you consider that the financial limit (other than personal injury claims) should be increased to: (i) 100,000 or (ii) some other figure (please state with reasons)? As a safety net, the financial limit for more complex personal injury claims will be retained at 50,000. Similarly, specialist claims such as schemes of arrangement and company structuring wouldall fall within High Court jurisdiction Question 64: Do you agree that the power to grant freezing orders should be extended to suitably qualified Circuit Judges sitting in the county courts? If not, please explain why. Question 65: Do you agree that claims for variation of trusts and 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 should come under the exclusive jurisdiction of the High Court? If not, please explain why. Question 66: If your answer to Question 65 is yes, please provide examples of other claims under the Companies Act that you consider should fall within the exclusive jurisdiction of the High Court. No other examples. Solving disputes in the county courts questionnaire (03.11) 23

24 Question 67: Do you agree that where a High Court Judge has jurisdiction to sit as a judge of the county court, the need for the specific request of the Lord Chief Justice, after consulting the Lord Chancellor, should be removed? If not, please explain why. Provided that there is actually spare capacity within the High Court Judge population, then such a change could support more efficient disposal of County Court cases Question 68: Do you agree that a general provision enabling a High Court Judge to sit as a judge of the county court as the requirement of business demands, should be introduced? If not, please explain why. See question 67 Question 69: Do you agree that a single county court should be established? If not, please explain why. This should enable better use of court and judicial resources, supporting more efficient handling and disposal of cases. Section 6 Impact assessments Question 70: Do you agree that we have correctly identified the range of impacts under the proposals set out in this consultation paper? The Impact Assessment are overall thorough, identifying risk weighted assumptions ( though a number of very strong assumptions are made) and highlighting whether any evidence is factual, anecdotal or non existent. Generally the Impact Assessments are not rich in hard data. Stakeholders are appropriately identified Solving disputes in the county courts questionnaire (03.11) 24

25 Question 71: Do you agree that we have correctly identified the extent of impacts under these proposals? See question 70 Question 72: Do you agree have any evidence of equality impacts that have not been identified within the equality impact assessments? If so, how could they be mitigated? Thank you for taking the time to let us have your views. Solving disputes in the county courts questionnaire (03.11) 25