SMALL CLAIMS PROCEEDINGS (Hansard, 28 October 1985)

HC Deb 28 October 1985 vol 84 cc701-5 701

§ Lords amendment: No. 5, in page 16, line 8, leave out from beginning to end of line 14, and insert— 18. —(1) For subsection (2) of section 35 of the Sheriff Courts (Scotland) Act 1971 (summary causes) there shall be substituted the following subsection—

"(2) There shall be a form of summary cause process, to be known as a "small claim", which shall be used for the purposes of such descriptions of summary cause proceedings as are prescribed by the Lord Advocate by order"."

§ The Solicitor-General for Scotland
I beg to move, That this House doth agree with the Lords in the said Amendment.

§ Mr. Deputy Speaker
With this it will be convenient to consider the following amendments:

§ No. 6, in page 16, line 20, leave out "small claims proceedings" and insert "a small claim"

§ No. 8, in page 16, line 23, leave out "small claims proceedings" and insert "a small claim"

§ No. 10, in page 16, line 30, leave out "small claims proceedings" and insert "a small claim"

§ No. 11, in page 16, line 34, leave out "claims proceedings" and insert "claim"

§ No. 16, in page 17, line 10, leave out "claims proceedings" and insert "claim"

§ No. 17, in page 17, line 16, leave out "proceedings" and insert "small claim"

§ No. 18, in page 17, line 18, leave out "proceedings" and insert "small claim"

§ No. 19, in page 17, line 19, leave out "proceedings" and insert "small claim"

§ No. 20, in page 17, line 20, leave out "small claims proceedings" and insert "a small claim"

§ No. 21, in page 17, line 21, leave out "proceedings" and insert "small claim"

§ No. 22, in page 17, line 23, leave out "small claims proceedings" and insert "a small claim"

§ No. 23, in page 17, line 25, leave out "small claims proceedings" and insert "a small claim"

§ No. 24, in page 17, line 27, leave out "small claims proceedings" and insert "a small claim"

§ No. 25, in page 17, line 30, leave out "small claims proceedings" and insert "a small claim"

§ No. 26, in page 17, line 32, leave out "small claims proceedings" and insert "a small claim"

§ No. 28, in page 17, line 44, leave out "small claims proceedings" and insert "a small claim"

§ The Solicitor-General for Scotland
The purpose of the first and main amendment of this group is to make clear that there will be a new procedure, within the existing summary cause procedure, which will be known as a "small claim". This procedure will be mandatory for all those proceedings which qualify as a "small claim". These cases will be prescribed in an order which will set out those descriptions of summary causes which are to be treated as small claims and their financial limit. Under a later amendment this order will be subject to affirmative resolution. Cases which fall outside those descriptions and above that financial limit will be dealt with under the present summary cause procedure. This amendment also replaces the term "small claims proceedings" with the more succinct "small claim".
The remaining amendments are consequential.
702 Although in the legislation the description of this new procedure was "small claims proceedings", even in Committee those who were involved, such as the Scottish Consumer Council and the Law Society, are already calling it "small claims" and for that reason it would seem sensible to agree to a change which follows a usage which has probably already become established.

§ Mr. Ewing
It always amazes me that we spend an hour or two in Committee trying to find a new description or a new procedure. The term "procedure" is commonly understood and, lo and behold, for this Bill we have found the new terms simply by dropping the word procedure. I am grateful to the Solicitor-General for accepting what was obvious to everyone else in Committee

§ Question put and agreed to.

§ Lords amendment No. 6 made.

§ Lords amendment: No. 7, in page 16, line 20, at end insert— (4) An order under subsection (2) above shall be by statutory instrument but shall not be made unless a draft of it has been approved by a resolution of each House of Parliament.

§ The Solicitor-General for Scotland
I beg to move, That this House doth agree with the Lords in the said amendment.

§ Mr. Deputy Speaker
With this it will be convenient to discuss the following amendments:

§ No. 14 in page 17, line 3, leave out "made".

§ No. 15, in page 17, line 4, leave out from "instrument" to end of line 6 and insert but shall not be made unless a draft of it has been approved by a resolution of each House of Parliament.".

§ The Solicitor-General for Scotland
The orders which the Lord Advocate will make under the new subsection (2) in section 35 of the Sheriff Courts (Scotland) Act 1971 and under subsection (4) of the new section 36B of the 1971 Act are at present subject to negative resolution procedure. These orders will set out the descriptions of summary cause proceedings to be dealt with as small claims, their financial limits, and the limits relating to awards of limited or no expenses. Lord Wilson of Langside, in Committee, proposed that instead affirmative resolution was appropriate for such orders. After consideration the Government agreed that affirmative resolution procedure of a draft of the proposed orders was more appropriate in view of the general importance and interest of the subject matter of these orders.

§ Mr. Ewing
I left the burden of my remarks to this group of amendments because the definition and explanation of the limits that are to be embodied in the new small claims are important. In Committee and in the latter stages of the Bill's passage there has been substantial debate on the limits that are to be set. The small claims process can be introduced only when there are statutory instruments showing the limits that the Government intend to apply. When we questioned the Solicitor-General, he seemed hesitant about the timing of the introduction of the statutory instruments and the limits.
The limits of the small claims and the question of no damages and no expense are crucial to the introduction of the system. I hope that the Minister will give us some idea how early in the new Session the statutory instruments will be introduced as they are crucial to the implementation of the system.
703 I received an invitation, as no doubt did the Minister, from the Scottish Consumer Council to celebrate the introduction of small claims. That is a bit premature because it cannot be introduced until we know the limits. I hope that the Solicitor-General will be able to say something about that.

§ The Solicitor-General for Scotland
I am tempted to embark upon some consideration about what might be the appropriate financial limits or the limits to be fixed in relation to limited or no expenses. In view of what I hope the hon. Gentleman will accept as a worthwhile concession in the direction that such matters should be subject to affirmative resolution, a more appropriate moment or consideration of such issues is in the event of the established financial limits proving unsatisfactory to hon. Members. I hope that they will not be unsatisfactory and it is better to leave the matter until the time that they are introduced.
I am not saying that there will be any marked delay in introducing them, but it would be daft to introduce a limit which eventually proved to be too low. I appreciate, and my noble and learned Friend the Lord Advocate appreciates, that there is a desire to see the limits fixed at a relatively high level. We have received a number of representations from some bodies which show that there could be problems if limits are fixed too high. It would be fair to say that there is concern that they should be fixed on the high side, but it would be wrong to tell the House that representations have gone all one way because that is not the case.
It is churlish of the hon. Gentleman to say that the invitation extended to him and to me to celebrate the introduction of the small claim is in some way premature. The Scottish Consumer Council clearly does not think so, and, after he has enjoyed its hospitality on Friday, I hope that he too will not think so.

§ Question put and agreed to.

§ Lords amendment No. 8 agreed to.

§ Lords amendment: No. 9, in page 16, line 25, at end insert "or".

§ The Solicitor-General for Scotland
I beg to move, That this House doth agree with the Lords in the said amendment.
The amendment makes clear that paragraphs (a) and (b) in the new section 36A describe three different types of pursuers, each of whom is ineligible for the services of the sheriff clerk in the service of the small claims summons, as they are not acting in an individual capacity. The three categories are, first, a partnership; second, a body corporate, such as a company; and, third, a pursuer acting in a representative capacity, such as that of a trustee. All this amendment does is make it clear they are not entitled to those services

§ Question put and agreed to.

§ Lords amendments Nos. 10 and 11 agreed to.

§ Lords amendment: No. 12, in page 16, leave out lines 38 to 43 and insert to a party to a small claim—

(a) who being a defender—

(i) has not stated a defence; or
(ii) having stated a defence, has not proceeded with a defence, has not acted in good faith as to its merits; or

(b) on whose part there has been unreasonable conduct in relation to the proceedings or the claim".

704 5.15 pm

§ The Solicitor-General
I beg to move, That this House doth agree with the Lords in the said amendment.
The amendment seeks to make clear the circumstances in which a party to a small claims action, particularly a defender, will lose the benefit of the special provisions relating to expenses whereby no, or a limited amount of, expenses may be awarded against an unsuccessful party. Where the benefit is lost, the normal rules for award of expenses in summary causes would apply. The wording takes account of criticisms made of the original wording by Lord Morton of Shuna.
Subsection (3) of new section 36B sets out the circumstances in which the normal rules for awarding expenses are to apply, first, in paragraph (a)(i) where the defender has offered no defence. This takes account of the fact that at present summary cause is used extensively for the routine collection of debts. It would be inequitable for the successful pursuer not to have expenses awarded to him in cases where there is no defence to a claim, since otherwise there would be a temptation for debtors not to pay their bills in the hope that the creditor would be discouraged from suing to recover the debt by the prospect of incurring expenses part or all of which could not be recovered.
The second circumstance is in paragraph (a)(ii) which preserves the existing provision whereby a defender is not to benefit if he states a case but proceeds no further with it. This is intended to prevent a defender lodging a skeletal or spurious defence simply to take advantage of the special rules on expenses. The third circumstance is in paragraph (a)(iii) which covers the possibility of the defender stating a defence and proceeding. with it, but the defence itself is spurious and has clearly been presented in bad faith merely to take advantage of the special expenses provisions.

§ Question put and agreed to.

§ Lords amendment: No. 13, in page 17, line 1, leave out "(c)" and insert ; nor do they apply".

§ The Solicitor-General for Scotland
I beg to move, That this House doth agree with the Lords in the said amendment.
Paragraph (5) of new section 36B(3) excludes from the special expenses provisions any party, either pursuer or defender, who acted unreasonably either during the proceedings or in relation to the claim itself. This would cover cases where it was clear that there was no proper claim to bring to court, or where a party had been acting in a dilatory manner or in bad faith.

§ Question put and agreed to.

§ Lords amendments Nos. 14 to 26 agreed to.

§ Lords amendment:No. 27, in page 17, line 34, leave out from "(3)" to "(2C)" in line 36 and insert (a) after "(2A)" there shall be inserted the words "(2B) or"'

§ The Solicitor-General for Scotland
I beg to move, That this House doth agree with the Lords in the said amendment.
This amendment in clause 18(3)(b) is to make clear that the decisions of the sheriff relating to remits made under section 37(3)(a) of the 1971 Act, which are not to be capable of review, are those under subsection (2A), (2B) 705 or (2C) of section 37(3) of the 1971 Act. The present drafting in the clause might imply that the decisions relating to remits may be made only where all three of these subsections are involved, which would not be the case.

§ Question put and agreed to.

§ Lords amendment No. 28 agreed to.