HC Deb 03 April 1973 vol 854 cc357-64


' .—(1) In section 92 of the County Courts Act 1959 (which enables the judge, but not the registrar, of the court to refer proceedings to arbitration with the consent of the parties) there shall be made the following amendments—

  1. (a) for subsection (1) there shall be substituted the following—
  2. (b) in subsection (2), for the word "judge" there shall be substituted the word "court".

(2) In section 93 of that Act (which enables the judge to refer proceedings or questions arising in proceedings for inquiry and report) there shall be made the following amendments—

  1. (a) in subsection (1), at the end, there shall be inserted the words "and, in such cases as may be prescribed by and subject to county court rules, the registrar may refer to a referee for inquiry and report any question arising in any proceedings."; and
  2. (b) in subsection (2), after the word "judge", there shall be inserted the words "or, as the case may be, the registrar".'.— [The Solicitor-General.]

Brought up, and read the First time.

9.58 p.m.

The Solicitor-General (Sir Michael Havers)

I beg to move, That the clause be read a Second time.

This is an important Government proposal. It fits in with the philosophy that has arisen over past years in respect of small claims courts. The main object of the new clause is to enable the Rule Committee to authorise the registrar—not only, as at present, the judge—to refer county court proceedings to arbitration and to make it clear that the arbitrator may be the judge or registrar making the reference. The new clause would also enable the registrar to refer any question arising in any proceedings to a referee for inquiry and report. This could be done by substituting for Section 92(1) of the County Courts Act 1959 a new sub-section in the terms set out in the new clause amendment.

It being Ten o'clock, further consideration of the Bill, as amended, stood adjourned.

Ordered, That the Administration of Justice Bill [Lords] may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Goodhew.]

Bill, as amended (in the Standing Committee), further considered.

The Solicitor-General

It means that by substituting the phrase "A county court" for "The judge" the registrar also will now have the power to refer proceedings to arbitration in such cases as the Rule Committee may prescribe. The result of this is that it will be open to the Rule Committee to delegate to the registrar the power to refer proceedings to arbitration either in certain cases or in certain categories of cases, as it may decide. An example of this would be those cases with a consumer element, such as cases arising out of the sale or hire of goods or the supply of services. As was pointed out in The Times in its leading article of 19th March, there are many disputes in which the amounts involved are small which do not arise from trading but would be susceptible to the kind of arbitration which was then being considered, such as a dispute, for example, over a motor car damaged in an accident where the amount involved was too low to warrant a claim from the insurance company. It may be that the appropriate figure for this type of work will be £75, which is the current limit of the registrar's jurisdiction, but this, no doubt, is a matter better left to the Rule Committee, which will be able to take into account the way in which the scheme is working before deciding whether to extend or narrow it.

It has the important advantage that it will enable provision to be made for a consumer arbitration service within the framework of the existing county court system, unlike the earlier proposals, which sought to set up a parallel system. It will be possible, for example, for rules to be made to provide that when a case comes before the registrar for what is known as a "pre-trial review" he can refer the proceedings either to himself or, if necessary, to the judge or to some other suitably qualified person who would sit as an arbitrator.

This will have the advantage—and we think it a very important advantage— that the case can then be disposed of more informally than if it were tried by the judge or registrar sitting in his ordinary court. It would be unnecessary to insist on a hearing in public or on formal pleadings, or upon the rigid application of the rules of evidence, or even the ordinary procedure adopted at the trial of an ordinary action. An award of a registrar sitting as an arbitrator, for example, could be entered as the judgment in the action and the successful party would be able to enforce it without having to bring fresh proceedings on it. It will have a great future here because in the smaller cases it will enable the court to order that these should be dealt with by arbitration without the formalities that would follow if the case remained in the registrar's or judge's court.

There is an amendment down by the hon. and learned Member for Dulwich (Mr. S. C. Silkin) in which he suggests that this power should obtain not only where the consent of both parties exists. The amendment he intends to move, and which I can tell the House now that we accept, takes away the need for the consent of the parties in this sort of case and substitutes in such cases as may be prescribed". The prescribed cases would be those prescribed in the rules. Ordinarily one might hesitate before removing the right to trial of a case by a judge or registrar but, since the whole philosophy of this amendment is to speed up and simplify the cases in this sort of category, it has been decided by the Government that this amendment is a sensible one and would be acceptable.

Mr. Deputy Speaker (Mr. E. L. Mallalieu)

Before the hon. and learned Member for Dulwich (Mr. S. C. Silkin) rises, I should say that he will be called upon in due course formally to move his amendment.

Mr. S. C. Silkin (Dulwich)

I am much obliged, Mr. Deputy Speaker. I am not quite clear what is the procedure for dealing with my amendment. No doubt it would be for the convenience of the House if I did not make a separate speech on the amendment but dealt with it in the course of the few remarks I have to make on new Clause 1.

New Clause 1 is a move in the direction of what has been called the small claims court but within the ambit of our existing county court system. So far as it goes, the Opposition welcome it. The question that is raised by the pressure in favour of a new court, by whatever name it be known, arises from the fact that many people are frightened of courts of any kind. People who are unwilling to take their disputes to the court, whether out of fear of the costs they may incur or for other reasons, are not likely to be persuaded to do so by this provision. One has to go a great deal further to get the general public acclimatised to the idea of referring small matters to a court.

I hope that in the future we shall concentrate particularly on that aspect of the matter and that, valuable as the changes in the procedure of the existing system may be, we shall not lose sight of the fact that they will not go very far unless and until the public are prepared to accept the local court in exactly the same way as they accept the local doctor, and we have not yet reached that stage.

If we are to make the best of the new proposals which appear in new Clause 1, it is essential that the court should have the power to operate these new provisions even where one party to the dispute is unwilling to do so. If the court does not have the power to operate these provisions in the absence of the consent of one of the parties, one can reasonably expect that in a great many cases the consumer will be the person who wishes to operate the procedure but the other party—whether it be a shopkeeper, a person who has sold a motor car, or someone who may have caused damage to property in the course of cleaning and repair—is extremely unlikely to wish to take full advantage of the procedure because of his greater means of making use of legal advice and assistance. If that situation is permitted, undoubtedly the purpose of the new clause will in many cases be frustrated and such good as I accept it will do will be very much lessened.

With that in mind I tabled two amendments. The second was in a form of words I understood to be acceptable to the Government, but I am very happy to accept the Government adviser's drafting rather than my own.

The effect of amendment (b) will be to enable the court, the registrar in many cases, in the sort of case where the authorities may prescribe, to proceed with the new powers under the clause even if one of the parties does not consent to their use. I was happy to hear the Solicitor-General confirm that the Government regard that as a useful amendment and that it will not be opposed.

In those circumstances, following your ruling, Mr. Deputy Speaker, I will in due course formally move amendment (b), but for the moment I welcome the new clause in principle.

Mrs. Sally Oppenheim (Gloucester)

I wish to intervene briefly to accord a very lukewarm welcome to the new clause which has come about to some extent as a result of some of the debates in the proceedings of a Standing Committee upstairs. I wish that I could feel that the new clause will be more effective in bringing about a small claims procedure for consumers in this country, and more particularly for the less articulate and literate consumers, than I believe it will in fact prove to be.

As the hon. and learned Member for Dulwich (Mr. C. S. Silkin) said, many consumers are intimidated by the formalities of the courts and, dare I say it, some of them are even intimidated by the legal profession.

Mr. Percy Grieve (Solihull)

Oh, come, come!

Mrs. Oppenheim

I am not saying that they are justifiably intimidated. The fact remains that some of them are.

In the context of this clause, I welcome the fact that through the £25 scheme many more people who would not other- wise find legal advice as accessible as it will now be to them may be drawn towards the county courts.

As I understand the new clause—and I hope my right hon. and learned Friend will correct me if I am wrong—the case must first have arisen in the county court before it can go to arbitration. In that case once again there will be a disincentive for the small consumer with a very small claim to bring his case to the county court.

I also add my support to the amendment moved by the hon. and learned Member for Dulwich and express my gratitude to my right hon. and learned Friend for its acceptance.

I look upon this as a halting first step. I shall be delighted if it proves more effective than I expect and, if it does not, I hope that my right hon. and learned Friend will be prepared to look at the question again later.

10.15 p.m.

Mr. Ivor Stanbrook (Orpington)

I also welcome the new clause with the reservation which has been expressed by my hon. Friend the Member for Gloucester (Mrs. Sally Oppenheim)—that is to say, that it may prove to be a disappointment to those who are deterred from going to the formal legal institutions, solicitors offices and county courts, to pursue their claims.

I am therefore somewhat reassured by my understanding of the operation of the clause if it means that by going to the county court it would be possible for proceedings to be transferred to some central point—perhaps to a civic advice centre in a shopping centre of a town— where arbitration can take place. I refer to a place which is easily available and accessible to members of the public and which can normally be regarded as a small claims court—not only for the purposes of complaints by shoppers, but the sort of place which is occupied by consumer advice centres in other respects. If that is the way the clause will operate, then we need not worry too much about its effect.

I have a reservation to make about amendment (b) proposed by the hon. and learned Member for Dulwich (Mr. S. C. Silkin). It seems to me that the essence of justice is impartiality, and what is sought by his amendment is to compel both parties to a dispute to accept the jurisdiction of a court or arbitration at a low level. It may be that the trader or manufacturer involved in the dispute has at issue a point of law which involves an important point of principle for the trader but which may not appear to be important to the consumer. It might be unjust for that trader to be compelled to accept jurisdiction at a low level. Therefore, I ask the Solicitor-General to go very carefully before he makes it obligatory on such people to accept a low level of jurisdiction.

Mr. S. C. Silkin

Surely the hon. Gentleman will agree that a case involving an important principle, whether on a matter of law or a complex factual issue, would be the sort of matter which would not be referred to arbitration if the importance of the point was made clear to the registrar. That would be the sort of case where it was essential for both sides to be legally represented and to have the best possible tribunal.

Mr. Stanbrook

I accept that point, and can only express the hope that provision will be made in the rules so that it is taken into account by the registrar or the county court judge for appropriate provisions to be made. However, I see danger in saying that there must be compulsion in requiring both parties to submit to a low level of jurisdiction.

The Solicitor-General

I do not want my hon. Friend the Member for Orpington (Mr. Stanbrook) to be under any illusion. I must tell him that there will not be an arbitration shop in the high street. The clause seeks to encourage informality on the occasion when the registrar is examining a case on the pre-trial review. He may then invite the parties—or in the right circumstances may tell the parties—that the matter will be referred to arbitration. He will usually act as the arbitrator, or in certain cases a skilled accountant might be required to act as arbitrator. He will then deal with the matter himself ordinarily, if not on the spot, at very short notice, with a great deal less formality, but almost certainly using either his room or his court. But I do not want anyone to feel that there will be a special small claims court set up in the high street where people can wander in and get "instant justice" simply by ringing the bell. That is not what is intended by the new clause.

Question put and agreed to.

Clause read a Second time.

Amendment made: In line 5, leave out 'with the consent of the parties to any proceedings, order the'

and insert: 'in such cases as may be prescribed, order any'.—[Mr. S. C. Silkin.]

Clause, as amended, added to the Bill.

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