SMALL CLAIMS COURTS (Hansard, 3 February 1971)

§ Mr. Michael Meacher (Oldham, West)

I beg to move, That leave be given to bring in a Bill to make provision for Small Claims Courts to try certain civil claims; and for related purposes. The Bill is designed to set up Small Claims Courts, which will provide justice for claims up to £100, as special divisions in the county courts.

The starting point for this Bill is the patent inadequacy of the present county court arrangements for the handling of such claims. This arises for several reasons. The first and most important is that the county courts as at present constituted are scarcely used at all by individuals. A Consumer Council survey, involving a 2 per cent. random sample of all ordinary summonses and default summonses recorded during 1967 in six courts, involving a total of 1,238 entries, found that a mere 9 per cent. of cases only were initiated by individuals, whereas 89 per cent. of cases were initiated by businesses; and even some of the very small proportion initiated by individuals were probably small businesses suing in the proprietor's name.

The clear function of the county courts therefore at present is debt collection on behalf of mail-order houses, hire purchase companies and other firms who sell consumer goods or services on credit. It may be argued that the total of company initiated claims is inflated by the business need to verify bad debts in the eyes of the Inland Revenue for the purpose of reducing taxation liabilities, but this does not detract from the extreme lop-sidedness of the current function of the county court and its lack of use by individuals. Indeed, the survey did not find a single consumer case, that is a case of a person suing because goods were faulty.

Secondly, it has been found that a person who consults a solicitor about a consumer problem is likely to be told that his claim, however sound, is not worth pursuing. The costs of skilled legal assistance are so high that it is not worth risking taking action which one might lose. Other contributory reasons for the comparative lack of solicitors' support 1685 include the reluctance of many solicitors to represent the client themselves in court and their preference to brief counsel, as well as the feeling that court procedure at present is unwieldy for handling such matters.

The costs of pursuing even a relatively modest claim can be prohibitive under the existing rules. For a day's hearing counsel's fee might be as much as £35; the solicitor's bill might perhaps be £50. At £6 per hour that is only eight hours' work. This means that something like £85 has already been spent, without counting postage, court fees, witnesses' expenses and so on. If the person loses he has to pay a similar amount for the other side. In effect, an individual may be risking a total of £200 to £300 to win £100. Therefore, it is hardly surprising that most individuals, unless they are persons of some substance, do not regard such a risk as worthwhile.

It may of course be argued, though acknowledging the defects of the present system, that the proper response should be a modification of county court rules. It has been suggested that a simple form might be completed by the plaintiff beforehand setting out the nature of his grievance and he might then be advised about the way to present his case. Although this would be helpful in guiding the claimant through the initial stages of procedure, it is not likely that it would sustain him for long against an experienced solicitor peppering him with demands for discovery of documents, further and better particulars, and so on.

It is also asserted that county court registrars and judges as a matter of practice go out of their way to assist and protect individual litigants who come before them. Although this may generally be true—and indeed it is—it does not on available evidence outweigh in the minds of individual claimants the rather formal, awe-inspiring, cumbersome and expensive image of the county courts with all their complicated procedural rules, as witness the paucity of those who enter claims. Furthermore, the judge at a trial cannot, however helpful he tries to be, produce evidence which the claimant did not bring along, nor can he throw overboard the rules of evidence to allow an unskilled claimant to tell his own story in hearsay evidence because he had 1686 omitted to bring along the relevant witness.

If the revision of the procedural rules is unlikely to be more than merely palliative, how might a small claims court be expected to meet the requirement of the situation and how would it work? It is proposed that the registrar of each county court should be charged with running an informal court for small claims, as a branch of the county court, designed for individuals who have their claims adjudicated without legal representation. The court would have jurisdiction for claims up to £100 in contract and tort, the latter including, for example, personal injury, negligence and damage to property.

The aim would be that it should function as a genuine people's court. For this reason companies, partnerships, associations and assignees of debt would not be allowed to sue to prevent the court becoming appropriated by firms for the purposes of debt collection. Since the object of the court would be, in the words of the Franks Committee on Administrative Tribunals, cheapness, accessibility, freedom from technicality, expedition and expert knowledge of their particular subject scope for appeals would deliberately be limited to cases where the judge certified that an important point of law was involved.

It is also proposed that representation by practising lawyers should be excluded in the small claims court. This is not said lightly in view of the hallowed English tradition of the advocacy principle. But the point is that in practice, because of the expense, most individuals would not have lawyers even if permitted to do so. Once lawyers began to appear in the small claims court, people would feel that they could not proceed without a lawyer, as is the situation at present in the county court. Once again we should face the position that small claims would not get proper attention and would be deterred from coming before a court. The introduction of lawyers would undermine the whole aim and purpose of the small claims court.

The parties will, of course, be unequal in skill and experience, though less unequal than if one side had a lawyer and the other did not. It follows that, to compensate for this inequality, the court 1687 must have certain investigatory functions so that enough facts are known for a just decision to be made. A certain precedent is provided by the tribunal system where the chairman questions the parties to elicit their cases and action is taken to ensure that essential evidence is produced, irrespective of the capabilities of the individuals involved. So here it is intended that the criterion shall be, the way in which a reasonable man with a knowledge of the law, if asked to decide a dispute, would proceed. On this basis, the registrar would let the parties tell their stories, asking questions where he required further information and searching out other evidence, in a manner at his discretion, until he felt able to apply his judgment reliably in assessing the parties' stories.

The cost of investigation would normally be met out of public money, except where the registrar directed that one of the parties should pay. This would discourage frivolous use of the court by enabling the registrar to ensure that any party who had behaved irresponsibly should pay the cost.

Basically, this is the system the application of which has been so powerfully demonstrated recently by four consumer cases detailed in a Daily Telegraph Supplement. It is also the system which has just received the considered approval of Justice, the British section of the International Commission of Jurists, which 1688 yesterday issued a statement regretting that the proposal had not yet been allotted the Government support which it merited, and noting that its inquiry into civil procedure, chaired by Lord Devlin, had made a preliminary finding that … there is a substantial denial of justice to the ordinary member of the public in this field. I hope very much that the House will recognise this proposal as a uniquely effective solution to the dual problem of the prohibitive expensiveness of pursuing many individual claims at present and the deterrent image of the county courts as at present constituted to many potential claimants, and on these grounds will permit the Bill to proceed to its next stage.