HL Deb 17 March 1977 vol 381 cc148-55

3.32 p.m.

The LORD CHANCELLOR (Lord Elwyn-Jones) rose to move, That the draft County Courts Jurisdiction Order 1977, laid before the House on 10th March, be approved. The noble and learned Lord said: My Lords, this is a draft Order in Council which requires Affirmative Resolutions in your Lordships' House and in another place before it is made by the Privy Council. The purpose of the order is to increase the jurisdiction of the county courts.

As your Lordships will know, the county courts are our local civil courts, dealing with the great bulk of civil litigation. There are some 300 of these courts up and down the country, in England and Wales, and the extent of their jurisdiction is determined by certain financial limits upon the size of the claims which may be brought in the county courts. The most important of these limits is that relating to actions in contract and tort which was last fixed in 1974 at £1,000. I am proposing that this figure of £1,000 should be increased to £2,000.

My main concern here is to maintain a proper balance between the work of the county courts and the High Court. In the last 20 years an increasing proportion of civil work has been done in the High Court. Although I hesitate to quote figures, I shall quote just two figures from a detailed set. To illustrate sufficiently what I have said, perhaps I may refer to the statistics which show that in 1958 one writ was issued in the Queen's Bench Division for every 15 summonses issued in the county courts. By 1976 one writ was issued in the Queen's Bench Division for every 7.15 summonses issued in the county courts. That imbalance has continuously increased over the last 20 years.

The proposed increase in the jurisdiction of the county courts would not by itself be enough to achieve any real improvement. The effect of the increase, taken alone, is simply to widen the range of choice open to litigants, leaving them free to proceed either in the county court or in the High Court in cases involving up to £2,000. In order to give some real incentive to bring cases in the county court, the County Courts Act provides for what I shall call the costs sanctions. There are two relevant rules here and they have the same purpose; namely, that of deterring people from bringing fairly modest cases in the High Court rather than the county courts. The first rule is that where a plaintiff in the High Court recovers less than £650 he can recover costs from the unsuccessful defendant only at the rate which would have applied had he brought the action in the county court. For that purpose, the draft order increases the limit of £650 to £1,200. The second rule is that where a plaintiff proceeds in the High Court and recovers a sum less than £150, he is not entitled to any costs at all against the defendant. The draft order increases that figure to £350.

It is these increases in the costs sanctions which should have the effect of achieving a real transfer of work from the High Court to the county courts. Naturally I have consulted all those who are most likely to be affected by these changes. They include the Bar Council, the Law Society, the TUC and the under sheriffs, who are responsible for the enforcement of orders in the High Court. I am, of course, fully aware of the importance of ensuring that these changes do not produce disadvantages to the litigant. For instance, I am satisfied that those injured in the course of their employment will not be prejudicially affected by the proposed change. The number of such cases which is likely to be transferred to the county court is of the order of about 1,300 a year, many of which of course do not reach trial at all but are settled. Litigants in those cases will have the advantage of the earlier decisions which the county courts are able to achieve and of having their cases dealt with often much nearer to their homes and their places of work.

Your Lordships will find that the detailed changes are set out in tabular form in Article 2 of the draft order. Column 1 lists the statutory provisions in which the change is to be effected. Column 2 gives the existing figures in each case and column 3 gives the proposed new figures. The key provisions are those in the first item in the column; namely, Section 39 of the County Courts Act, which sets the limit of jurisdiction in contract and tort at £1,000 which, as I have said, will be increased to £2,000; and in Section 47 where the separate provisions relating to the upper and lower costs sanctions are set out.

I should also draw your Lordships' attention to the fact that the equity jurisdiction of the county court, which is dealt with in Section 52 of the Act and deals with such equitable matters as the administration of estates and the variation of trusts, is increased from £5,000 to £15,000. Provision is also made that the upper limit to the amount of claims which may be heard by registrars is increased from £100 to £200. Finally, the jurisdiction relating to what are now called "extortionate credit bargains", which is perhaps our modern term for usury, is also increased. Under the Consumer Credit Act this jurisdiction will be brought into line with the jurisdiction of the county court in contract and tort with effect from the date when the relevant provisions of the Consumer Credit Act come into force. I can reassure your Lordships that the remaining changes in the order are either consequential or what I might describe as parallel to the changes that I have outlined. I beg to move.

Moved, That the draft County Courts Jurisdiction Order 1977, laid before the House on 10th March, be approved.—(The Lord Chancellor.)

3.39 p.m.


My Lords, I am sure that noble Lords will be grateful to the noble and learned Lord the Lord Chancellor for explaining these changes relating to county courts and their jurisdiction in a comprehensive manner. The noble and learned Lord, with his usual perspicacity, has anticipated the two matters which I had intended to raise with him. Nevertheless, as I understand it, these changes do not so much reflect the fall in the value of money as a desire to keep a balance as between litigants who come to the High Court as opposed to the county courts.

One is perhaps moved to ask whether the noble and learned Lord is satisfied that the county courts are able to take on this extra work. Certainly in the days when I was in practice, which was not so very long ago, one always was concerned not so much at the actual delay in getting a case on before a county court, but at the appearances which frequently proved to be fruitless because the courts were so busy that they could not get to the end of their lists. If that were to be the result of this legislation then the cure would be almost worse than the disease, because at least when it comes to the High Court the litigants know where they are and know approximately when their cases are likely to be called on.

So far as the table in Article 2 is concerned, I was struck by the increase in the sum under Section 52 of the 1959 Act from £5,000 to £15,000, and that, of course, as the noble and learned Lord said, relates to equity jurisdiction. One asks whether there has been an imbalance. Otherwise, why is it necessary to make such a substantial increase—a threefold increase? The other interesting matter is the extortionate credit bargains in Section 139(5) of the Consumer Credit Act 1974. As the noble and learned Lord said, the maximum has been raised there from £750 to no less than £2,000. Have there been many of these cases? If so, they certainly have not attracted much, if any, publicity. Is it because there have been cases, that the county courts, it is felt, should deal with them? Or do the authorities believe that there will be a number of cases, and that this is, as it were, a wise clearing of the decks before the rush occurs? Subject to these two questions, I am sure your Lordships will give a welcome to these provisions.


My Lords, while in no way wanting to question the substance of this order, I seize the opportunity to raise a more general question. It seems to me that at least part of the reason for this order arises from the progress of inflation. This may not be the sole cause, but it must be part of the cause. It has occurred to me frequently that whenever we put a financial limit, or fine, or liability in a Bill, the original intentions of Parliament are quickly vitiated by the progress of inflation. To amend every Bill on the Statute Book to put this right would be an enormous task. Is it not time that the Government considered a general amending Bill to index financial figures put into Bills in accordance with the value of the pound? Otherwise every fine, every limit, slowly becomes out of date and eventually ridiculous.


My Lords, I regret that my noble friend is accepting inflation as a regular phenomenom, and utterly denying the possibility of a return to stable money.

3.43 p.m.


My Lords, may I put to the noble and learned Lord one point which arises out of this order but which does not in any way affect what my noble friend has been saying, that this side of the House approves of the order. When I became Lord Chancellor about seven years ago it was my duty to carry through the Courts Act which amalgamated in criminal jurisdiction the various quarter sessions courts and assize courts into Crown Courts. It was always in my mind to try to do the same in civil jurisdiction—that is to say, not to have a statutory limit at all on what are now the county courts. In relation to civil jurisdiction, I wanted to carry out an exercise rather on the basis of the Beeching Commission, so that there would be only one type of court with civil jurisdiction throughout the country, on the basis of the Crown Court in criminal jurisdiction.

This would have a double merit. Instead of having to come to Parliament from time to time to ask for increased jurisdiction in the county court, and instead of having the occasional dispute, not always unimportant, as to whether a particular piece of litigation brought in the county court is within the county courts' jurisdiction at all (I have in mind those which ask for particular remedies not readily available), you could get rid of jurisdictional problems altogether by simply doing in relation to civil jurisdiction what has now already been done as a result of the Beeching exercise in relation to criminal jurisdiction.

When I put this suggestion forward in the ordinary way some years ago, I was told that the administrative machinery at the disposal of the Lord Chancellor's office could not cope with the exercise in relation to civil jurisdiction at the same time as they were undergoing the agonies of the Beeching reforms. These ought now to have more or less come to an end, and I should like the noble and learned Lord to inquire as to whether or not there are advantages in a Beeching type exercise in relation to civil jurisdiction.

3.46 p.m.


My Lords, I am grateful for the response which the order I have introduced has raised and for some of the interesting questions that have arisen in the course of the discussion. May I deal immediately with the suggestion of the noble and learned Lord. I confess that we have not been giving any fresh thought to the unification of civil jurisdiction on the lines that he has mentioned. I am happy to say that the problems flowing from Beeching have been pretty well resolved subject to the insoluble problem of the continuing increase in crime, and the continuing increase in the number of cases that come before the courts, which is an agonising problem for any holder of my Office. I am certainly willing to look at that. It has not come into my in-tray since I have been in this Office, but we shall certainy look at it in the light of what has been said.

I am not sure about the suggestion that we should provide in all circumstances for built-in provisions to deal with the contingency of inflation. I agree with my noble friend that it may be too pessimistic a conclusion that we have inflation for all time. It probably is better to keep control in this way, tiresome though it is to the Department to keep on having to bring orders before Parliament in this way. Perhaps it is not a bad thing for Parliament to review and look at the inflationary situation and its effects as we go along. At any rate, that is the intention in regard to this order.

The noble Earl, Lord Mansfield, has raised one or two questions. First, I think that the county courts will be well able to cope with the additional work that this order will bring before them. The registrars will be handling more of the small cases by virtue of the increase in jurisdiction that they will get by reason of the order. I have had discussions with those concerned with county court administration and I do not think that they have indicated any anxiety on the score of not being able to cope.

I was asked how many cases in respect of the extortionate credit bargain provision have come forward. As yet, none of course, because the Act itself creating that category of grounds for setting aside contracts does not come into force until 16th May. I hope that there will not be a flood, but at any rate it is prudent to provide for what may occur. The noble Earl also asked me about the apparently large increase in the provision for jurisdiction in equity matters. The profession asked me some time ago to make this kind of change. The figures have not changed since 1969. The matters relevant tend to run to large sums, and I think that this will be in keeping with the wishes of those who are professionally concerned in this particular field. I think that covers the matters put to me, and I am grateful to the House for giving support to the Motion.


My Lords, I would appeal to the noble and learned Lord to give further consideration to a problem which, with respect, he dismissed in a rather cursory manner. At best, inflation will be running this year in the neighbourhood, optimistically, of between 12 per cent. and 15 per cent. It is unlikely to be reduced greatly the year after and, on all reasonable computations, before we get back to a state of stable money several years will have elapsed.

The noble and learned Lord said that it would be a good idea for Parliament from time to time to review the position; but the position in this respect affects every figure which enters into the structure of the law of the land. It seems to me that if Parliament were to carry out the injunction of the noble and learned Lord and review the situation from time to time, the business of both Houses of Parliament would be greatly increased, whereas the objection to indexation is certainly not the objection which the noble Baroness raised—that it assumes built-in inflation for ever; if inflation ceases, indexation ceases likewise. This is a serious matter as regards the business of Parliament and I appeal to the noble and learned Lord to give further attention to it.


My Lords, I appreciate the seriousness of the problem. I was trying to recollect what the occasion was when I introduced legislation with a measure of indexation in it; I recollect that on that occasion it was strongly criticised as accepting the continuing flow of inflation as inevitable, insoluble and something that should not be countenanced by the recognition of indexation. There are, with respect to the noble Lord, Lord Robbins, other views. If it were developed, it might be of great convenience to Government, but whether Parliament would then be able to feel confident that it was keeping a sufficiently watchful eye on the impact of matters like the order I have introduced today I am not at all sure, but I assure the noble Lord that I have an open mind on it and that we shall be looking at it.

On Question, Motion agreed to.