COSTS OF PROCEEDINGS COMMENCED IN HIGH COURT WHICH COULD HAVE BEEN COMMENCED IN COUNTY COURT

HC Deb 20 October 1969 vol 788 cc774-99

Amendment made: No. 2, in page 2, line 33, leave out '£150' and insert '£100'.—[The Solicitor-General.]

Mr. Percival

I beg to move Amendment No. 3, in page 2, line 33, at end insert: (d) after paragraph (b) of that subsection there shall be inserted the following paragraph:— (c) in this subsection "costs of the action" means the costs incurred up to and including the obtaining of judgment and does not mean or include the costs of executing judgment and a plaintiff who executes in the High Court the judgment which he has obtained shall be entitled to the costs of such execution on the appropriate High Court Scale'. I wish to strip this Amendment of its technicalities in the same way as I think I was able to strip the last one of its technicalities, although I see no way of achieving that.

The point we are considering is this. Section 47, or the operative part of it, refers throughout to the costs of the action and says that in certain circumstances a party shall not have the costs of the action on any scale higher than the county court scale.

During our discussion of the Bill, the question arose whether the costs of execution are the same as the costs of the action. I suspect that the Solicitor-General will tell us that there is no doubt about it and that those who have been worrying need not have worried. Our purpose in moving the Amendment is to make as sure as one can that those who have been worried about it are not worried hereafter.

I believe that the Amendment does no more than recite the law as it stands at the moment, and certainly its purpose is so to do. I say that because I have had the benefit of seeing a letter written by the permanent secretary to the Lord Chancellor to the president of the Under-Sheriffs' Association, following a discussion at which this point was considered by those gentlemen, in which the permanent secretary said, I understand, that the position in law was as set out in the Amendment, namely, that costs of the action do not include costs of execution.

Thus, albeit that the party may, because of Section 47(1), not be entitled to any of the costs of the action because he proceeded in the High Court in a case in which the amount was less than £100, even so he will be entitled to the costs of execution on the High Court scale, because the costs of execution are not costs of the action.

I understand that to be the proposition of law as set out in the letter to which I have referred. I see the learned Solicitor-General looking in a certain direction, and I think that that is exactly what the letter says. I am not sure whether the hon. and learned Gentleman agrees or disagrees, or whether he wishes to intervene.

The Solicitor-General

I am anxious that the hon. and learned Gentleman should not attach too much significance to innocent movements of my head to ascertain who is present and who is not.

Mr. Percival

I was endeavouring to ascertain whether the hon. and learned Gentleman was indicating agreement with me, for, if he had, I should have been able to cut the matter short. However, having interrupted my train of thought in that way, I must endeavour now to return to it.

I believe, as I say, that our Amendment states the law as it is, in accordance with the law as stated by the permanent secretary to the Lord Chancellor in the letter to which I referred. It may be asked: if that be so, why bother further? The reason we ought to bother in this case is that, even if that is the law, there are a good many people who do not know that it is. The point has been raised by solicitors in various parts of the country. It has been raised by the under-sheriffs through their association, who, after all, are fairly knowledgable in these matters. If everyone knew the point, one would imagine that the first people to be well aware of it would be the under-sheriffs and their association.

I have been looking at the Final Report of the Evershed Committee. Again, the matter is far from clear, it looks as though that Committee may not have appreciated that costs of execution are not costs of the action.

4.15 p.m.

Finally, I turned to the case relied on by the permanent secretary, the case of Armitage v. Jessop, in which, apparently, the Chief Justice said specifically that the costs of execution are not costs of the action. That was a case in 1866. I have no doubt that it is still the law, and I am sure that the permanent secretary was right when he said that he apprehended that there could be no doubt that that decision would be followed in construing Section 47(1). But there are not many people who know about that case at present.

I did what I suppose any practising lawyer would do when in doubt on a question like this. I looked up Section 47 to see whether Armitage v. Jessop was noted at that point in the county court practice. In my edition, which I believe to be the latest, it is not referred to. I looked, therefore, at the next practice book, the White Book, and I did not find it referred to there.

I then wrote to the Solicitor-General, who, with his customary courtesy, replied—I summarise it in this way—that it was his view that the law was sufficiently well established in the terms set out in the Amendment as to render the Amendment unnecessary. As I understood his letter, he did not quarrel with my proposition that the Amendment was merely declaratory of the law, but, on the contrary, he said that the law was so well established that it was unnecessary to declare it.

That was a source of some comfort to me, but I remain concerned that people should know what the law is. It is no good the law being clear unless people know it. I hope that our short debate on the matter will have a good result in this sense. If, as I suspect will happen, the Solicitor-General confirms what I have said, as he did in his letter, that the law is well established, that statement will carry weight with solicitors practising in these matters, with under-sheriffs and, perhaps, even with registrars. Although one cannot quote what is said in the House, there is reason to believe that it sometimes becomes known to people in the courts.

For all those reasons, I hope that the hon. and learned Gentleman will be able to make a clear statement on the matter, removing for the future any doubt on the point among practitioners.

The Solicitor-General

I am grateful to the hon. and learned Member for Southport (Mr. Percival) for the care which he has, to my knowledge, applied to this question. I am always cautious—I am sure that he will understand and, perhaps, share the same disposition—before expressing my understanding of the law in terms which are merely confirmatory of something which an hon. or hon. and learned Member has said. I propose, therefore, to deal with the point rather in my own way, although I am grateful to the hon. and learned Gentleman for his consideration of the question.

I am anxious also, about the nightmarish possibility which opens before us if the course is too widely adopted, as he recommended it, of spelling out in a statute the effect of an authority which is not widely known. That process calls for somewhat cautious application.

The object of the Amendment appears to be to ensure that the limitations imposed by Section 47(1) of the County Courts Act, 1959 that the costs of a plaintiff who brings in the High Court an action which he could have brought in the county court shall apply only to the costs incurred up to judgment and not to the costs of executing the judgment.

Under Section 47(1) the plaintiff is not entitled to any costs of the action if he recovers less than £75 and he is entitled only to county court costs of the action if he recovers less than £400. Clause 4(1)(b) provides that £500 be substituted for the figure of £400 and under the Government Amendment £100 will be substituted for the figure of £75. It is to be expected, therefore, that most of the debt-collecting actions for sums between £100 and £500 will continue to be brought in the High Court.

The Under Sheriffs' Association has questioned, however, whether this will be the case if the plaintiff is not to be able to recover the costs of executing his judgment in the High Court. Section 47(4) provides, by way of an exception to subsection (1), that the plaintiff in a debt-collecting action in the High Court who recovers £40 or more shall be entitled to costs or such scale as may be prescribed by the rules of the Supreme Court. Among the costs prescribed by Appendix 3 to the Rules of the Supreme Court Order 62 for this purpose is an item of £3 9s. for the costs of issuing execution.

The under-sheriffs fear that if Section 47(4) is repealed in accordance with Clause 4(2), a plaintiff in the High Court who, under Section 47(1), is entitled only to county court costs will no longer be able to recover the costs of enforcing his judgment in the High Court but only to the corresponding county court costs.

We believe that this fear is unfounded, and this is where we come to the case of Armitage v. Jessop to which the hon. and learned Member referred. I agree with him that it is desirable that this case should be more widely known than it is. It was held in that case that although under the County Courts Acts then in force a plaintiff who recovered a debt not exceeding £20 in the High Court was not entitled to the costs of the action, he was still entitled to the costs of execution.

The Chief Justice, Erle C.J., said quite specifically that the costs of execution are not costs of the action. That is the law today. This is the expression used in Section 41(1) of the present County Courts Act and there can be little doubt that, even if subsection (4) is repealed, the costs sanctions imposed by Section 47(1) will not apply to the plaintiff's costs of enforcing his judgment in the High Court.

My noble Friend the Lord Chancellor intends to recommend to the Supreme Court Rule Committee, when the Bill is passed, that it should again prescribe fixed costs for undefended cases in which only county court costs are recoverable under Section 47(1) and that these should, where appropriate, include the usual costs of execution in the High Court. Notwithstanding the repeal of subsection (4), the Rule Committee will clearly have power to do this under the provision in Section 99(1)(e) of the Supreme Court of Judicature (Consolidation) Act, 1925 which enables them to make rules regulating any matters relating to the costs of the proceedings.

The first part of the Amendment, which provides that "costs of the action" means "the costs incurred up to" judgment and does not include the costs of execution is therefore, in our view, unnecessary. The second part, which provides that a plaintiff who executes his judgment in the High Court shall be entitled to High Court costs of execution goes too far, for while it is right that a plaintiff who is entitled to the costs of the action, albeit on the county court scale, should also be entitled to the cost of executing his judgment in the High Court, it cannot be right that a plaintiff who is not entitled to any costs of the action should, nevertheless, be able to execute his judgment in the High Court at the expense of the defendant.

In accordance with a recommendation in paragraph 393(b) of the Final Report of the Evershed Committee on Supreme Court Practice and Procedure—Cmnd. 8878—Rules of Supreme Court Order 47, Rule 4, provides that a writ of fi.fa. to enforce a judgment for less than £40 which does not entitle the plaintiff to costs shall not authorise the sheriff to levy any fees, poundage or other costs of execution. In such a case the plaintiff is expected to enforce his judgment by issuing a warrant of execution in the county court under the powers conferred by Section 139 of the County Courts Act, 1959.

The sum of £40 is the amount below which a plaintiff in a debt-collecting action in the High Court is not at present entitled to High Court costs under Section 47(4) of the Act. When the Bill is passed it will not only be necessary to retain Rules of Supreme Court Order 47, Rule 4, but also no doubt to substitute a higher figure for £40.

I must therefore ask the House to reject the Amendment. I will give consideration to what method there is of bringing the effect of Armitage v. Jessop home to those to who will be interested and concerned.

Mr. Percival

I am obliged to the Solicitor-General.

Mr. Speaker

Order. The hon. and learned Member needs the leave of the House if he wishes to speak again.

Mr. Percival

I thought that I was intervening. If not, I seek the leave of the House. I thought that the Solicitor-General was giving way, because I indicated that I was asking a question.

The Solicitor-General

I had finished.

Mr. Percival

I found it difficult to follow what the Solicitor-General said. I understood him to say that he was not proposing to do anything which would alter the law as decided in Armitage v. Jessop. On the contrary, he proposed to take such steps as might be appropriate to see that it was brought to the attention of more people. But Armitage v. Jessop decided that a person who was not entitled to any costs of bringing the action in the High Court should nevertheless have the costs of execution in the High Court.

There appears to be some inconsistency in what the hon. and learned Gentleman said. I will gladly give way to him, as I thought he was giving way to me, if he would care to clarify the point by making it clear that the Lord Chancellor does not have in mind any rules which would have the effect of reversing Armitage v. Jessop. We should then know rather better where we stand. Apparently he does not wish to intervene and we shall have to read the report. As he does not rise to intervene to put the matter clear, let me state that he has said two things which are inconsistent and that it is unsatisfactory that the House should be left in that situation.

Amendment negatived.

Amendments made: No. 4, in page 3, line 5, leave out '£150' and insert '£100'.

No. 5, in page 3, line 9, leave out '£150' and insert '£100'.—[Mr. Solicitor-General.]

Mr. Percival

I beg to move Amendment No. 6, in page 3, line 14, leave out subsection (2) and insert: (2) In subsection (4) of the said section 47 for the words 'forty pounds' there shall be substituted the words 'seventy five pounds'. The Amendments with which we have been dealing have been highly technical. It has, nevertheless, been possible to deal with them quite shortly, or, at all events, I hope that it has been apparent that we on this side of the House have had in mind the desirability of getting on with the business and not going into all the technicalities. But we regard Amendment No. 6 as the most important of the Amendments which we have on the Notice Paper and I preface my remarks by saying that it will take a little longer than the earlier Amendments.

Mr. Speaker

Order. It was, however, debated in Committee.

4.30 p.m.

Mr. Percival

Yes, Mr. Speaker, but only a small number of Members had the pleasure of hearing the matter in Committee. In the House the opportunity is shared by a much greater number. The difficulty is that if one tries to be too quick, either in terms of quantity or speed, the whole thing is unintelligible. It may well be that an extra 10 per cent. of time, if that results in a little more understanding, is time very well spent.

The Amendment seeks to leave out subsection (2) of the Bill as it stands, and that subsection leaves out Section 47(4) of the principal Act. So, by leaving out the subsection we bring back the other provision, but we do not suggest that it should be put back in precisely the same form as that in which it has been for some time, because this has a financial limit in it, and for the same reason that it has been accepted that all the financial limit should go up, so we accept that this limit, too, should go up. So instead of putting back £40 as the cutoff figure, we propose a cut-off figure of £75.

For the benefit of the House, let me endeavour to simplify the matter in this way. I am not quite sure whether the purpose of the subsection was fully understood in Committee or would necessarily be understood at first glance in the House or elsewhere. The subsection has the very clear and definite purpose of providing for fixed costs. That is its principal purpose. The purpose is not basically the alleviating of hardships, and the rest. The primary purpose is to give power to make rules providing for costs in the cases listed in the subsection. It provides for fixed costs in debt-collecting cases as distinct from cases in which there are issues between the parties, and the case has to go to court and time is taken in placing the respective merits of each side before the court.

There is a belief, and things have been said on the Treasury Benches in Committee and in the Chamber which might foster the belief, that under Section 47(4) all one is dealing with is the giving of extra benefit to the very tiny cases, but that is not so at all. The subsection deals with fixed costs in debt-collecting cases, and under Section 47(4) rules have been made which provide for costs at each different level. So let not the House think that this provision deals only with the little cases and the giving of special benefits to them.

There is a perfectly logical reason why Parliament has for a very long time now drawn this distinction between contested and uncontested cases. When one is dealing with debt-collecting cases—the kind of cases referred to in subsection (4)—ex hypothesi these will be just procedural steps: the issuing of the writ, the signing of judgment by default because the defendant has not entered a defence, or, at the very most, the signing of an order for judgment under Order 14. So one can make a good guess in advance what is involved in the case before it starts. It is therefore possible to have fixed scales of costs.

It is necessary and desirable to do that because—I do not know whether the learned Solicitor-General has any more personal knowledge of this than I have, but I am sure that professional clients will have told him, as they have told me—the fixing of the amount of costs to be paid by the other side can take a lot of time and cost money. Therefore, where it is possible, it is quite sensible to have fixed scales of costs.

The learned Solicitor-General has already referred to the intention of his noble and learned Friend to make rules under Section 99 of the Judicature Act, 1925, providing for fixed costs, in undefended cases. This point was made by the permanent under-secretary to the Under-Sheriffs' Association in the letter to which I have earlier referred and to which the Solicitor-General referred in connection with the last Amendment. I hope that if he has not already done so, the Solicitor-General will be able to give the House an assurance that rules providing for fixed costs will be made under Section 99 of the Judicature Act, 1925, if we are not successful with this Amendment. If the Government were to accept the Amendment, or if it were carried on a vote, that would be unnecessary.

There is another respect in which these undefended cases are distinguishable from the defended cases, and that is that, ex hypothesi, not one of them can take any judge time at all. By definition, the cases to which Section 47(4) apply cannot take any of If anything happens that that case has court and so takes itself would take it Section 47(4).

When, in subsection (1), we were talking about Section 47, which is the first place in the passage of the Bill where we talk about having a cut-off figure below which no costs are paid—not just county court costs as against High Court costs, but no costs at all—the reason for having that cut-off was that it was necessary to deter people from bringing in the High Court cases that should be brought in the county court because it was necessary to save some of the time of the High Court judges and move work which would otherwise take their time over to the county courts.

That is a consideration that simply does not apply when one is dealing with Section 47(4), so, on the face of it, it seems wholly illogical to have the same cut-off figure of £100 in both situations when the considerations relating to the two are totally different.

Here, I want to demonstrate what Section 47(4) does, and to illustrate the point I made earlier that we are here not simply concerned with the tiny sums, and not simply trying to give some extra benefit to those who sue for small sums in the High Court. The present position under Section 47(1) is that if a plaintiff recovers over £400, he gets High Court costs. If he recovers between £75 and £400, he can recover only county court costs. And if he recovers less than £75, he gets no costs at all. That is the situation in relation to contested actions.

I will demonstrate how uncontested actions stand, in comparison, when one considers the application of Section 47(4) as it is applied now by means of rules made under it. If a plaintiff in an uncontested action recovers £300 or more, the costs which he recovers under these fixed scales of costs are equivalent to High Court costs. That is the distinction. In a contested case he must get £400 while in an uncontested case, if he gets £300, he obtains the fixed costs which are the equivalent of High Court costs.

In a case involving between £75 and £300 he gets costs on county court Scale IV. In a contested action involving between £75 and £400, he gets county court costs. In an uncontested case involving between £40 and £75 the plaintiff recovers county court costs on Scale III, whereas in a contested case, if he gets less than £75, he obtains no costs at all.

This distinction has been drawn thus far, and drawn for very good reasons indeed. These have resulted in there being just that little bit less discouragement to plaintiffs to bring actions in the High Court when they are uncontested; and my hon. Friends suggest, as we did in Committee, that that makes good sense.

It is also to be observed from the figures I have given that a most important consideration arises; that the safeguarding of the defendant has been looked after in both instances. As for the looking after of defendants, I agree that when a plaintiff has a choice of bringing an action in two courts one must remember that, if he chooses one court where the other would have done, one must have some provisions for safeguarding the defendant from having to pay more in the other event.

But we should not carry this looking after of defendants to the extent that some people appear to believe. Indeed, one recently published report seems to suggest that all creditors are cruel ogres, out to take the last penny from the purses of debtors, and that all debtors are defenceless widows. Hon. Members will have had sufficient experience in their constituencies to know that the reverse may just as easily be true.

Many of the hardest cases with which we must deal are those involving, for example, people who, one would have thought, would have known better than to have taken advantage of, say, a small trader, perhaps a builder, having obtained credit from him which they did not need and which he could not afford and then, by failing to meet their obligations, driving him out of business. I suspect that few hon. Members cannot have come across this or similar cases.

We must, of course, look after defendants, but we must not think that they are the only people who must be looked after. We are trying here to look after the creditor as well as the debtor, remembering that it is essential in a credit system, which is what we have in this country—many of our transactions are based on this principle—that there is a creditable system for the enforcement of judgments for collecting the amounts which creditors are owed.

4.45 p.m.

Is there or is there not any reason for abolishing the distinction as to costs which has been in use for a very long time indeed; the distinction between costs rules applicable to contested cases and those applicable to uncontested cases? When one has a situation in which the main ground for fixing the cut-off in Section 47(1) at £100 is absent when one turns one's attention to uncontested cases, then it is, on the face of it, strange to adopt the same cut-off figure for both.

There may be certain points that I have overlooked. If so, I hope that the Solicitor-General will make his views clear. I will mention some of the possible reasons why such a distinction might be necessary, and on each I will briefly indicate why my hon. Friends do not think that they are reasons for taking the contrary view to that which I am urging.

If it could be said that the High Court cannot cope with all this uncontested work or that it is in some way slowing down the High Court work or making it difficult, I could see a good reason for saying, "We should take steps to persuade—the Solicitor-General's word—or drive—the word I used in Committee—people who are collecting debts below a certain amount into the county court." As far as I know, however, there has never been any suggestion from the High Court that it cannot perfectly easily deal with this debt collecting work or that it is in any way making the work of the High Court difficult or embarrassing it in the other work that it must do.

If it could be said that the sheriffs have more judgments to cope with than they can, then I could follow the Government's argument for saying that more of these uncontested cases should be persuaded or driven into the county court. But here the position is the contrary. The danger is not of overloading the sheriffs, but of taking so much away from them that their task may be rendered difficult.

If it could be said that the county court has a more efficient system for debt collecting that is at present underemployed, then I could follow the argument for saying that we had better drive some of this work from the High Court into the county court. But thus far I have never heard anybody so argue. Some committees have said that it is as good as that of the High Court, but I shall give two good reasons, which have emerged recently, for doubting this. In any event, I have never heard anybody say that the county court has an excellent system which is at present underemployed.

Some people take the view that it is wrong to have a choice in debt collecting. I hope that I summarise the Payne Committee's Report accurately when I say that that Committee believed that there should not be a choice; that debt collecting up to £750 is a process which should be started only in the county court. This is one approach and, done that way, there would be no choice.

As for implementing arty of the recommendations of the Payne Committee, I hope that we will not fall into the error of taking isolated parts of reports of this kind and think that they are applicable on their own. The whole essence of the Payne Report seems to be the substitution of an entirely new enforcement machinery for that existing now, both in the county court and the High Court.

The new enforcement office and administration orders to be used for the enforcement of High Court and county court judgments would be an entirely different set-up from that existing now. It seems inappropriate to consider any of the other main recommendations.

Another reason that has been advanced for doing what the Government seek to do and resisting what we seek to do is that there is a necessity to protect debtors as to costs. In Committee, I had not looked at the scales of costs laid down under the Rules of Court under the authority of Section 47(4). I gladly acknowledge that it was only when the Solicitor-General drew attention to Order 65 in Committee that I appreciated that it was the relevant order.

Since then, I have looked at them and all that I can say is that if the costs paid to a solicitor for doing his debt collecting in the county courts are even less than those prescribed under Order 47(4) no wonder no one wants to go into the county courts. There could not be the slightest possibility of a suggestion that the costs prescribed under Order 65 are extravagant. They are little enough for doing the job. If the county court costs for doing the same job were even less, rather than saying that that is a reason for driving people into the county courts I should be more inclined to draw the inference that it was highly necessary that county court costs should be improved. That would be very much in line with the thinking of the Prices and Incomes Board and the Wynn Committee.

What else has been advanced in favour of not doing what we seek to do in this Amendment? The Solicitor-General gave us some quotations in Committee to which I will not refer now, but he cannot have realised at the time but may have discovered since, what the position was. He suggested that there was a conflict between the views of the Austin Jones Committee and the first interim report of the Evershed Committee, one having suggested that the county court was as good as the High Court—that was the Austin Jones Committee—and the Evershed Committee having said that it thought the High Court was a bit better than the county court.

Within a few months slightly differing views were expressed by these two reports. What the Solicitor-General had overlooked was that four years later, when the Evershed Committee had had a lot more time to consider this matter, when it had had every opportunity to take account of what was contained in the Austin Jones Report and the representations made by the Association of County Court Registrars, it still thought that the distinctions we are talking about ought to be retained. It recommended that the cut-off figure be raised, but resisted the strong representations made to it that Section 47(4) should be abolished. On the contrary, it states specifically that it ought to be retained. I am not aware of anything that has happened since or anything said by any committee since to cast doubts upon that.

That leads me, naturally, to the quotation which the Solicitor-General took from the Payne Report which he relied on as support for his proposition that Section 47(4) should go. He has probably had another look at it since and will realise that the part he quoted at Clause 43 was, unwittingly I am sure, not complete and that what the Payne Committee said was: We are therefore of the opinion that, if the commencement of actions for recovery of debts within the county court jurisdiction is still to be allowed in the High Court and our enforcement system is to be introduced, subsection (4) of section 47 should be repealed. We do not yet know whether the new enforcement system recommended by the Payne Committee will be adopted. Even if the decision of the Government is to adopt it, it has not yet been taken, or made public. If it has been taken and has yet to be made public it will be some time before it can be implemented. This is what I mean by saying that we should not take a recommendation out of the Report in isolation.

It is true that we can find words in the Payne Report saying that Section 47(4) should go, but when one looks at it it is part of a sentence which has two "ifs" in it. Those "ifs" represent two conditions. The first is satisfied because we are proposing to keep the two alternative methods of debt collecting specified. The second of those "ifs", if "our enforcement system is to be introduced" is something of which we have no knowledge. We do not know whether it will come about and if so when.

Whatever evidence may have been before those committees we now have a good deal of information, which ought to be of the greatest assistance in deciding the question in this Amendment. This is a Bill in which many practising lawyers have taken a considerable practical interest. They have not sat back and, after it has all been passed, written saying, "Why did you do so and so?"—a sequence of events with which we are all familiar.

In this case individuals practising in the law, the Law Society and the Under-Sheriffs' Association, singly and collectively, have put their views before the Committee, the House and the Government while there was still time to pay regard to them. It is no exaggeration to say that they all expressed the view that the High Court process of execution may, if not always, be more efficient and suitable. Certainly, in a very large number of cases it is more suitable, effective, expeditious and only slightly more expensive, if at all, than the county court.

If that was not enough we also have the experience with a great Government Department. The House and the public know that the Department of Health and Social Security, unhappily, has to collect a great number of debts. It has to collect sums due on stamps which people have not put on cards; it has to collect overpayment, and so on. A great many of these debts are for modest sums. That Department has changed its practice of debt collecting and recently adopted the practice of starting all debt collection actions for sums of £40 or more in the High Court rather than the county court. I am told that there has been a dramatic improvement not only in the total amount recovered, but in the amount of costs recovered. I asked the Solicitor-General if he could give me the figures, but he was not able to do so. I could give them to him if he wanted them, but perhaps he now has them.

5.0 p.m.

The Solicitor-General must know that in this instance where we have debt collecting on a substantial scale and a body concerned with debt collecting on a substantial scale which has tried both—the county courts and then changed to the High Court which it has found much more expeditious and satisfactory—we should consider very carefully before depriving people other than Government Departments of those benefits.

The Crown stands in a very privileged position in relation to the costs penalty Section 47. The citizen may be subjected to costs penalties under Section 47, but it does not apply to the Crown. Therefore, the significance of what has happened to this Department is twofold. First, it provides the evidence, if we need further evidence, that what the practitioners have been telling us is right and that the High Court provides a more effective system for debt collecting. Secondly, it would be wrong to enable the Crown to go on enjoying that more favourable method of debt collecting and penalise the rest of the citizens.

For those reasons, plus others mentioned in Committee which I may have left out inadvertently or to keep within the bounds of order, I hope that even at this eleventh hour the Government will accept that what is in issue is a modest distinction in the consequences as to costs between two types of action raising different considerations concerning court time and costs. Since there is a distinction, the law should recognise it. Cannot we do the same? Anybody else would in practice in terms of business. Usually, when there are two situations different conditions prevail in them. This distinction has been recognised for a long time without detriment to anybody and so we are told by the practitioners, much to the advantage of many. I hope that even at this eleventh hour the Government will be prepared to maintain this distinction at least until we know what is to happen about the wider recommendations of the Payne Committee and that they will accept the Amendment.

The Solicitor-General

The effect of this Amendment would be to omit the repeal of subsection (4) of Section 47 of the County Courts Act, 1959, and to substitute £75 for the figure of £40 specified in that subsection. A similar Amendment was defeated in Committee after an equally divided vote among the members. The Chairman gave his casting vote in favour of the original form of the Clause.

The costs sanctions in subsection (1) of Section 47 are subject to a number of qualifications. Among them is the provision in subsection (4) that in what is commonly called a debt-collecting action the plaintiff shall be entitled, unless otherwise ordered, to costs on such scale as may be prescribed by the Rules of the Supreme Court.

It might be helpful to the House if I were to state what is comprised in the expression "debt-collecting action" which one hears from time to time in this connection. It is, I understand, an action for a debt or liquidated demand for a sum of £40 or more where the defendant pays not less than £40 within eight days after service of the writ or the plaintiff within 28 days obtains judgment for £40 or more in default of appearance or defence or under Order 14.

The fixed costs prescribed by Appendix 3 to the Rules of the Supreme Court Order 62 for this purpose are divided into three bands: the first, applying where the amount recovered is between £40 and £75, prescribes sums equivalent to costs on county court scale 3; the second, applying where the amount recovered is between £75 and £300, prescribes sums equivalent to costs on county scale 4; and the third, applying where the amount recovered is £300 or more, prescribes sums equivalent to High Court costs.

Originally, Section 116 of the County Courts Act, 1888, enabled the plaintiff in an action founded on contract to recover costs on the High Court scale where he obtained judgment under the Rules of the Supreme Court Order 14 for £20 or more. By Section 20 of the Administration of Justice Act, 1925, this provision was extended to the other cases mentioned in Section 47(4) of the County Courts Act, 1959. The figure of £20 remains the same until the County Court Act, 1955, substituted the present figure of £40.

It is of interest and of some importance to Members considering this matter to see it in that historical setting. The object of the last change which I mentioned was to give effect to the recommendations of the Evershed Committee on Supreme Court Practice and Procedure. In its first interim report, Cmnd. 7764, it thought and recorded in paragraph 33 that. Section 47(4) should be retained because the procedure in the High Court is much used and in practice provides a more expeditious remedy, both in obtaining judgment and enforcing such judgment by execution, than the procedure in the county court". It recommended only that £40 should be substituted for £20 and that further consideration should be given to reducing the fixed costs prescribed for claims above £40. It is true that it was a few months earlier than this recommendation of the Evershed Committee, in fact in April, 1959, that the Austin Jones Committee on County Court Procedure had reached the almost opposite conclusion in its final Report, Cmnd. 7668.

It said, in paragraph 105: Where the High Court and county court possess concurrent jurisdiction there would seem to be no justification for permiting the plaintiff to involve the defendant in liability for High Court costs unless the remedy by the county court is substantially less efficient than that provided by the High Court. In our opinion this cannot be shown". The Payne Committee on the Enforcement of Judgment Debts agreed with the Austin Jones Committee.

The special provision made by Section 47(4) for the costs of debts collecting actions is, in our view, unjustifiable. We think that it affords a positive inducement to plaintiffs to bring in the High Court actions for which the county court is the natural and economical forum. I have statistics of judgments entered in the Central Office in 1968 which I regard as substantiating the assessment which I have just offered.

I want to consider, first, default judgments and, secondly, Order 14 judgments. Default judgments not exceeding £40 totalled 652; between £40 and £100, 7,576; between £100 and £200, 8,423; between £200 and £300, 3,821; between £300 and £400, 2,362; and exceeding £400, 9,183. Order 14 judgments not exceeding £40 numbered 28; between £40 and £100, 211; between £100 and £200, 399; between £200 and £300, 282; between £300 and £400, 196; and exceeding £400, 1,313.

Since these judgments constitute about 80 per cent. of all judgments entered in the Central Office, it is clear that subsection (4) of Section 14 largely removes the efficacy of subsection (1) as a sanction against bringing in the High Court actions which could be brought in the county court. It is only in cases to which subsection (4) does not apply—that it, actions in which less than £40 is recovered—that subsection (1) has any real deterrent effect.

The Payne Committee pointed out that the raising of the sum of £20 to £40 in 1955 had an immediate and spectacular result. That appears in paragraph 100 of Command 3909. Claims in the High Court for sums not exceeding £40 gradually disappeared and the number of district registries was drastically reduced.

In 1967, however, 56,678 actions leading to default and summary judgment were started in the High Court which could have been started in the county court. The inference was, therefore, I suggest, irresistible that a sanction which provides that no costs should be recovered on a judgment which does not exceed £X is immediately and dramatically effective, whereas a sanction limiting the amount or scale of cost recoverable is largely futile.

Plainly, therefore, if subsection (4) is retained with the substitution of £75 for £40, debt-collecting actions will continue to be brought in the High Court for sums of £75 and upwards. To that extent, the provision in Section 47(1) depriving a plaintiff of costs if he recovers less than £100 would be rendered nugatory.

The exact number of debt-collecting actions brought in the High Court for sums between £75 and £100 is not known, but as the figures which I have given show, in 1968 7,576 default judgments and 211 judgments under Order 14 were entered in the Central Office for sums between £40 and £100. Those between £75 and £100 must have formed a substantial proportion—possibly between one-half and two-thirds—of this number.

Apart from the number of cases involved, it is wrong, we think, in principle that a plaintiff with an undefended claim should be specially privileged in costs if he sues in the High Court. If a claim is defended, there may well be justification for proceeding in the High Court, but if the claim is undefended it would be more logical to restrict, instead of enlarge, the plaintiff's entitlement to costs.

The object of the provision in the 1888 Act was, apparently, to give the plaintiff in an action of contract a special right to High Court costs when he recovered £20 or more under a procedure—the Rules of the Supreme Court, Order 14—which was not available in the county court. It is difficult to see any justification for its subsequent extension to cases in which judgment is obtained in default of appearance or defence, because exactly the same procedure is available by way of default summons in the county court.

However that may be, the Payne Committee found that the present procedure for obtaining judgment in the county court in uncontested cases is at least as expeditious as that in the High Court and, indeed, is often quicker, as the Committee said in paragraph 107 of its Report.

5.15 p.m.

The Payne Committee also found that even the current system of enforcement of summary judgments is as expeditious in the county court as in the High Court, for the reasons given by the Austin Jones Committee. Possibly, in individual cases, solicitors may take a different view, but the Payne Committee received a substantial body of evidence and produced in Appendix 4 to its Report detailed statistics to support its conclusions. There can be little doubt that it represents the best overall assessment which has been made to date of the relative cost and efficacy of High Court and county court execution.

Since 1888 the value of money has fallen to about 16 per cent. On this basis alone, the figure of £75, which the Amendment proposes to substitute for £40 in subsection (4), is too low. It should be nearer £120. If this figure were inserted in subsection (4), there would be no point in retaining the subsection as it simply provides an exception to the general provision in subsection (1) which, as amended by the Bill, fixes £100 as the amount which a plaintiff in the High Court must recover in order to be entitled to costs.

I am, therefore, obliged to advise the House to reject the Amendment. I have tried to put the case for rejection as fairly as I can. It seems to me that there can be no practical need or logical reason for retaining subsection (4). It is with some satisfaction that I offer this crumb of comfort to the hon. and learned Member, if what I am about to say deserves that description. I am prepared to confirm to the House and to the hon. and learned Member that if Section 47(4) is repealed, which is the course I recommend, the Rule Committee will be invited to prescribe under its rule-making powers fixed costs for debt-collecting cases in the different bands mentioned in Section 47(1).

Mr. Percival

That would be from £100 upwards. I am glad that the Solicitor-General is able to give us that assurance, but I would like to make one or two comments on the points he has made, if only to place them on record for future consideration.

The hon. and learned Gentleman has referred again to the First Interim Report of the Evershed Committee. With respect, I think that it is a very bad point to take the first interim report of a committee which was issued four years before its Final Report and compare that with the Austin Jones Committee, which published its Report three months before the First Interim Report of the Evershed Committee. Surely, if there is any substance to be found in the Evershed Committee Reports, it is in that Committee's Final Report, to which the Solicitor-General's noble and learned Friend the Lord Chancellor was a party, because he was a member of that Committee.

The recommendation of that Committee, despite considerable pressure that Section 47(4) should be abolished, was that it should not be abolished but, on the contrary, that the cut-off figure in it should be increased. That is precisely what we are suggesting in the Amendment. We are suggesting that the cutoff figure should be increased but that the subsection should be retained. I suggest, therefore, with respect, that if the Evershed Committee is support for either view, it is support for what we are saying in the Amendment.

I must comment on the Solicitor-General's use of the expression that the county court is the natural and economic forum. I do not know what my hon. and learned Friends who practise in the law think about this, but to me "natural forum" in this context does not mean anything. What matters when one is deciding where to bring an action is the most efficient way to do it. There is not a natural way of doing it. All ways are artificial and unnatural; they are devised by man for the benefit of man, and it is misleading to talk in terms of a natural forum. The natural forum is the one which is the better, and there are differences of opinion here as to which is the better.

I am sure that the Solicitor-General will not mind my saying that most of his reply dealt with figures. I was anxiously awaiting the end of the figures to know what inconvenience, if any, had been caused to the High Court in having to deal with that number of debt-collecting cases, but I did not detect anything in his remarks to suggest that any inconvenience had been caused. That is in accordance with all the remaining information that we have on this side of the House. It is pointless for the Solicitor-General to read out a string of figures of the number of debt-collecting cases unless there is evidence that inconvenience has been caused to the High Court, or that its work has been impeded.

The Solicitor-General then dealt with the necessity for some cost sanction. We have never suggested that there is no necessity for cost sanction. This is another example of the Solicitor-General answering a point which we have not made, and this makes debating difficult. We agree that there should be some cost sanction, and we agree that the figure to give effect to this cost sanction must from time to time be brought up to date, and for both those reasons we put the figure of £75 in place of £45. The Solicitor-General has not dealt with the main argument in support of the Amendment, which is the distinction between debt-collecting actions and other actions.

May I take up the Solicitor-General's closing remark that it is wrong in principle for there to be some specially privileged debt-collecting litigant. This is to look at the matter completely upside down. It is no special privilege to a litigant to be able to bring his claim in the High Court. The High Courts of Justice are the Queen's courts, and they have been open to Her Majesty's subjects ever since we have had them. It is no special privilege to bring a certain kind of action in the High Court.

What has happened is that, to encourage people, if I may use the Solicitor-General's word, or to drive them, to use mine, to go to the county courts instead of the High Court, it has been the practice for a considerable time to penalise people for using the High Court if they could use the county courts. It is to stand the thing on its head if, after doing that, we talk about people being specially privileged if they are allowed to have some costs in bringing their cases in the High Court.

When we employ cost sanctions to persuade people to go to the county court, we are seeking to persuade, or to drive, them not to use that which is their right and has been for a long time. Yes, we must do it where there is good cause, but the onus lies upon the Government to justify cost sanctions, and to justify anything which makes it more difficult for a person to use the High Court. With respect, it is looking at the matter entirely in the wrong way to speak, as the Solicitor-General spoke, of it being wrong to allow anybody to enjoy special privileges. The Amendment would not give anybody any special privileges. It would merely recognise a distinction of fact which has for a long time been recognised.

The Solicitor-General knows that normally I have considerable respect for his views, but I consider his answer to be

wholly unsatisfactory in that it did not answer the reasons put forward in support of the Amendment. I must, therefore, advise my hon. and right hon. Friends to support the Amendment in the Lobby.

Question put, That the Amendment be made—:—

The House divided: Ayes 121, Noes 146.

Division No. 352.]	AYES	[5.28 p.m.
Alison, Michael (Barkston Ash)	Gower, Raymond	Percival, Ian
Atkins, Humphrey (M't'n & M'd'n)	Gresham Cooke, R.	Pink, R. Bonner
Awdry, Daniel	Gurden, Harold	Prior, J. M. L.
Beamish, Col. Sir Tufton	Harvey, Sir Arthur Vere	Pym, Francis
Bell, Ronald	Hay, John	Quennell, Miss J. M.
Bennett, Sir Frederic (Torquay)	Heath, Rt. Hn. Edward	Ramsden, Rt. Hn. James
Bennett, Dr. Reginald (Gos. & Fhm)	Hogg, Rt. Hn. Quintin	Rees-Davies, W. R.
Bessell, Peter	Holland, Philip	Ridsdale, Julian
Biffen, John	Hordern, Peter	Robson Brown, Sir William
Biggs-Davison, John	Howell, David (Guildford)	Royle, Anthony
Black, Sir Cyril	Hunt, John	Russell, Sir Ronald
Body, Richard	Hutchison, Michael Clark	Scott, Nicholas
Bossom, Sir Clive	Jopling, Michael	Scott-Hopkins, James
Boyd-Carpenter, Rt. Hn. John	Joseph, Rt. Hn. Sir Keith	Sharples, Richard
Boyle, Rt. Hn. Sir Edward	Kerby, Capt. Henry	Shaw, Michael (Sc'b'gh & Whitby)
Braine, Bernard	King, Evelyn (Dorset, S.)	Sinclair, Sir George
Bromley-Davenport, Lt.-Col. Sir Walter	Kitson, Timothy	Speed, Keith
Brown, Sir Edward (Bath)	Knight, Mrs. Jill	Stodart, Anthony
Bullus, Sir Eric	Lancaster, Col. C. G.	Tapsell, Peter
Burden, F. A.	Lane, David	Taylor, Sir Charles (Eastbourne)
Campbell, B. (Oldham, W.)	Lubbock, Eric	Taylor, Frank (Moss Side)
Campbell, Gordon (Moray & Nairn)	McAdden, Sir Stephen	Temple, John M.
Carlisle, Mark	MacArthur, Ian	Turton, Rt. Hn. R. H.
Carr, Rt. Hn. Robert	Mackenzie, Alasdair (Ross & Crom'ty)	Waddington, David
Chataway, Christopher	McNair-Wilson, Michael	Wainwright, Richard (Colne Valley)
Cooper-Key, Sir Neill	Maginnis, John E.	Walker, Peter (Worcester)
Corfield, F. V.	Marten, Neil	Walker-Smith, Rt. Hn. Sir Derek
Crouch, David	Maude, Angus	Walters, Dennis
Dalkeith, Earl of	Mawby, Ray	Ward, Dame Irene
Dance, James	Maxwell-Hyslop, R. J.	Weatherill, Bernard
Dean, Paul	Maydon, Lt.-Cmdr. S. L. C.	Wells, John (Maidstone)
Doughty, Charles	Mitchell, David (Basingstoke)	Whitelaw, Rt. Hn. William
Elliot, Capt. Walter (Carshalton)	Monro, Hector	Wiggin, A. W.
Elliott, R.W.(N'c'tle-upon-Tyne, N.)	Montgomery, Fergus	Wilson, Geoffrey (Truro)
Farr, John	More, Jasper	Wood, Rt. Hn. Richard
Fisher, Nigel	Morgan, Geraint (Denbigh)	Woodnutt, Mark
Foster, Sir John	Morrison, Charles (Devizes)	Wright, Esmond
Gilmour, Ian (Norfolk, C.)	Mott-Radclyffe, Sir Charles
Glover, Sir Douglas	Munro-Lucas-Tooth, Sir Hugh	TELLERS FOR THE AYES:
Glyn, Sir Richard	Murton, Oscar	Mr. Reginald Eyre and Mr. Anthony Grant.
Godber, Rt. Hn. J. B.	Noble, Rt. Hn. Michael
	Orr-Ewing, Sir Ian
NOES
Albu, Austen	Concannon, J. D.	Fletcher, Raymond (Ilkeston)
Allaun, Frank (Salford, E.)	Conlan, Bernard	Fletcher, Ted (Darlington)
Allen, Scholefield	Davies, Dr. Ernest (Stretford)	Freeson, Reginald
Atkins, Ronald (Preston, N.)	Diamond, Rt. Hn. John	Garrett, W. E.
Atkinson, Norman (Tottenham)	Dickens, James	Ginsburg, David
Bacon, Fit. Hn. Alice	Dobson, Ray	Gregory, Arnold
Benn, Rt. Hn. Anthony Wedgwood	Doig, Peter	Grey, Charles (Durham)
Bennett, James (G'gow, Bridgeton)	Driberg, Tom	Griffiths, David (Rother Valley)
Bidwell, Sydney	Edwards, Robert (Bilston)	Griffiths, Will (Exchange)
Blackburn, F.	Edwards, William (Merioneth)	Hamilton, William (Fife, W.)
Blenkinsop, Arthur	English, Michael	Hamling, William
Booth, Albert	Ennals, David	Harrison, Walter (Wakefield)
Boyden, James	Ensor, David	Hazell, Bert
Bray, Dr. Jeremy	Evans, Albert (Islington, S.W.)	Heffer, Eric S.
Buchan, Norman	Evans, Fred (Caerphilly)	Hobden, Dennis
Butter, Herbert (Hackney, C.)	Evans, Ioan L. (Birm'h'm, Yardley)	Horner, John
Carter-Jones, Lewis	Fernyhough, E.	Houghton, Rt. Hn. Douglas
Chapman, Donald	Finch, Harold	Howarth, Robert (Bolton, E.)
Coe, Denis	Fitch, Alan (Wigan)	Howell, Denis (Small Heath)
Coleman, Donald	Fletcher, Rt. Hn. Sir Eric(Islington, E.)	Howie, W.
Hoy, Rt. Hn. James	Manuel, Archie	Rose, Paul
Huckfield, Leslie	Mapp, Charles	Ross, Rt. Hn. William
Hughes, Rt. Hn. Cledwyn (Anglesey)	Marsh, Rt. Hn. Richard	Ryan, John
Hughes, Hector (Aberdeen, N.)	Mellish, Rt. Hn. Robert	Sheldon, Robert
Hynd, John	Mendelson, John	Shore, Rt. Hn. Peter (Stepney)
Irvine, Sir Arthur (Edge Hill)	Miller, Dr. M. S.	Short, Mrs. Renée(W'hampton, N.E.)
Janner, Sir Barnett	Molloy, William	Silkin, Rt. Hn. John (Deptford)
Jenkins, Hugh (Putney)	Moonman, Eric	Silverman, Julius
Jenkins, Rt. Hn. Roy (Stechford)	Morris, Alfred (Wythenshawe)	Slater, Joseph
Johnson, Carol (Lewisham, S.)	Morris, Charles R. (Openshaw)	Small, William
Judd, Frank	Morris, John (Aberavon)	Snow, Julian
Kelley, Richard	Moyle, Roland	Spriggs, Leslie
Kerr, Mrs. Anne (R'ter & Chatham)	Newens, Stan	Steele, Thomas (Dunbartonshire, W.)
Kerr, Russell (Feltham)	Oram, Albert E.	Taverne, Dick
Leadbitter, Ted	Orbach, Maurice	Urwin, T. W.
Lee, Rt. Hn. Frederick (Newton)	Orme, Stanley	Wainwright, Edwin (Dearne Valley)
Lestor, Miss Joan	Oswald, Thomas	Walker, Harold (Doncaster)
Lewis, Arthur (W. Ham, N.)	Owen, Will (Morpeth)	Wallace, George
Lewis, Ron (Carlisle)	Padley, Walter	White, Mrs. Eirene
Loughlin, Charles	Page, Derek (King's Lynn)	Whitlock, William
Lyon, Alexander W. (York)	Palmer, Arthur	Willey, Rt. Hn. Frederick
Mabon, Dr. J. Dickson	Pannell, Rt. Hn. Charles	Williams, Alan (Swansea, W.)
McBride, Neil	Peart, Rt. Hn. Fred	Wilson, William (Coventry, S.)
McCann, John	Perry, Ernest G. (Battersea, S.)	Woodburn, Rt. Hn. A.
MacColl, James	Perry, George H. (Nottingham, S.)	Woof, Robert
McGuire, Michael	Price, Thomas (Westhoughton)
Mackie, John	Rankin, John	TELLERS FOR THE NOES:
McMillan, Tom (Glasgow, C.)	Rees, Merlyn	Mr. James Hamilton and Mr. Joseph Harper.
MacPherson, Malcolm	Roebuck, Roy
Mallalieu, E. L. (Brigg)	Rogers, George (Kensington, N.)
Mallalieu, J. P. W.(Huddersfield, E.)

Amendment made: No. 7, in page 3, line 20, leave out '£150' and insert '£100'.—[The Solicitor-General.]