HL Deb 16 July 1981 vol 422 cc1429-37

7.1 p.m.

The Lord Chancellor rose to move, That the draft order laid before the House on 26th June be approved.

The noble and learned Lord said: My Lords, I rise to move that this Motion be agreed to. It is necessary in accordance with the ritual prescribed by Section 192 of the County Courts Act 1959, as amended. The ritual requires affirmative resolutions in both Houses before the draft Order in Council which is before the House is submitted to Her Majesty in Council. The purpose of the draft Order in Council is to increase the jurisdiction of the county courts. Your Lordships need not be reminded of the importance of these courts. They are in fact the main courts of first resort for civil claims in this country.

Last year, for instance, some 1½ million money claims were started in the county courts—that is, claims for sums of money or for damages—compared with 200,000-odd started in the High Court. There are in England and Wales something like 300 county courts and the extent of their jurisdiction, which of course is purely statutory, is determined by financial limits, in the case of money claims, on the amount of the claims which may be brought there. The most important of these are the limits relating to actions in contract and in tort. The last time that this Motion was moved was in 1977 when my predecessor raised the limit to £2,000, which is where it stands now.

Under the draft before the House the figure of £2,000, which is the status quo, would be increased to £5,000, and there would then be some consequentials. The limit of the trial jurisdiction of registrars would be increased from £200 to £500—that is to say, a tenth of the relevant figures that I have mentioned—and the limit in equity proceedings from £15,000 to £30,000. There are changes to which I shall return relating to costs.

The purpose of the increase is twofold. In the first place we have to take account of inflation, which, I am sorry to say, under two successive Governments has been considerable since 1977. We have at the same time to have a little elbow room in case inflation continues, even under the present admirable Administration of Her Majesty's Ministers, because I hope that, if the House will be good enough to accept these proposals, it will not fall upon me or any successor I might have to suggest a further increase of these limits within the lifetime of the present Parliament.

The second purpose to which I referred is to achieve, if we can, a more rational and economical use of judicial time. Many actions at present begun in the High Court could be dealt with in the county court. The High Court is heavily burdened and ought to be relieved, so far as it can reasonbly be done, so that it can then concentrate on the more difficult and substantial matters. I ought to tell the House that within the last nine months there has been a considerable increase in the volume of civil business in the High Court, and the pressure on the High Court bench continues to increase both in the civil field and in the criminal field, because the judiciary which deals both with the county court and the High Court business is a seamless robe covering both the civil and the criminal jurisdictions.

This might well be illustrated by the figures for waiting time in the Queen's Bench Division of the High Court—waiting time, of course, in civil cases. The period for which the litigant may have to wait for his trial to come on varies from perhaps as little as two months in the shortest case to two years in lengthier matters from the time that the action is set down. That might be compared with a waiting period in the county court which varies only from eight to 10 weeks, so that the period of delay in the county court is very much less, and far more acceptable.

Therefore, in the interests of justice, it becomes desirable that some of the actions now commenced in the High Court should be taken out and sent to the county court. I am told that the best estimate I can give to the House is that the proposals would result in between 450 and 500 additional trials each year being tried in the county court. That amounts to the time of between two and three High Court judges. By making that amount of extra judicial time available, the waiting times in the Queen's Bench Division can therefore be significantly shortened.

It is estimated that the increase of jurisdiction will bring to the county court not trials but plaints of the order of 30,000 to 40,000, and that compares with an existing total of 1,700,000 plaints which are now started in the county court. I am told that no extra court staff or bailiffs should be required, but in due course some extra registrars will be needed, and that is because the proposed increase in the registrars' jurisdiction would enable them to take work now falling to the circuit bench, especially in London and the South-East. The net result should be a lightening of the load on the circuit bench, and this means that more circuit judges can be released to deal with the even more serious backlog, especially in London and the South-East, in criminal matters.

I now come to questions of costs, which, in the eyes of lawyers, is sometimes the most important issue of all. Ever since I have been at the Bar the litigant with a rather small claim which can be tried in the county court has been encouraged by rules as to costs to start in the county court rather than in the High Court. This has been done by two rules which could conveniently, I think, be called the costs sanctions.

The first is a rule by which, if you start in the High Court—which of course you are perfectly entitled to do because it is a court of unlimited jurisdiction in either direction—and get an award which could have been recovered in the county court but is less than the upper costs sanction (I shall come to specifics later) you get only county court costs, even though you succeed in the High Court. The other sanction is that, at the lower end of the scale, there has always been, ever since I have been at the Bar, a rather lower figure below which you do not get any costs at all if you start in the High Court and get a figure of damages or debt below that lower figure.

At present the status quo is that under the first rule you get only county court costs if you start in the High Court and do not get more than £1,200, which compares with the maximum county court jurisdiction of £2,000. If my calculations are right, that is three-fifths of the maximum jurisdiction; if you do not reach that, then you get only county court costs. The draft order increases the £1,200 to £3,000, which of course is exactly three-fifths of the maximum proposed county court figure. So what we are doing is to maintain the status quo as regards that sanction.

Under the second rule, at present if you start in the High Court and do not get more than—or if you recover less than, to be exactly correct—£350, you do not get your costs in the High Court. That represents, again, if my calculation is right, seven-fortieths of the maximum jurisdiction, and the draft order increases that figure to £600, which is more favourable to the plaintiff because it represents six-fiftieths of the maximum jurisdiction, so that it is more favourable. This of course is the sanction which will ensure the real transfer of work. I have of course consulted those most likely to be affected including the judiciary, the Senate of the Inns of Court and the Law Society, the TUC and CBI and the under sheriffs, because they have an interest in the enforcement of High Court judgments.

An integral part of the increase in jurisdiction will be the accompanying provisions as regards costs, which are of major interest but are not contained in the draft order. I have been dealing hitherto with those which are contained in the draft order, but I think it is appropriate that I should mention briefly what it is proposed to do. The opportunity has been taken to propose to the County Court Rule Committee a completely revised structure for the provisions relating to costs on the higher scales. The new structure will be simpler than the old; the number of individual items has been more than halved and the number of higher scales has been reduced from four to three. The new structure is very similar to that for the High Court and this will assist anyone who has to deal with both.

However wide one makes the range of costs figures in these scales, there is always a possibility that there will be some cases where costs ought to exceed the range allowed at the top end. Most of us who have practised at the Bar, having won our case, have said how very difficult the case has been and asked the county court judge to give us costs on a higher scale, and that is what I am talking about. For that reason, there is a rule in the existing provisions which allows the range to be exceeded for certain items in certain circumstances. The County Court Rule Committee has been considering a proposal that these circumstances should be limited more strictly than at present. I have considered carefully whether that proposal should be adopted for the costs provisions associated with the jurisdictional increase. The profession has, understandably, expressed concern about this and I have concluded that the question needs to be explored rather further before a decision is taken. For the time being, therefore, the Rule Committee will be invited to retain the existing rule on that, the status quo.

Completely revised costs figures will also be proposed. These are not intended to lead to lower allowances than those being made under the existing county court costs provisions. The full extent of the ranges proposed can appropriately be used in taxing work done in 1982. The proposals on costs which will be made to the Rule Committee have been the subject of difficult but constructive discussions between the Lord Chancellor's Department and both branches of the legal profession. I will not claim that either side feels that the result is ideally what it would have wanted, but there seems to be general agreement that the result is the best that could be achieved amicably in the circumstances.

Returning to the draft order before your Lordships, the detailed changes are in tabular form in Article 2 of the draft. Column 1 lists the statutory provisions in which a change is to be effected; column 2 gives the existing figure; and column 3 gives the proposed new figure. The most important provisions are those in the first item in the column, namely, Section 39 of the County Courts Act, which set the current limit of jurisdiction in contract and tort; and Section 47, where the separate provisions relating to the upper and lower costs sanctions are set out. I also draw attention to the fact that the equity jurisdiction of the county court, covered by Section 52 of the Act, which deals with such matters as the administration of estates and variation of trusts, is increased from £15,000 to £30,000. Provision is also made for the upper limit on claims which may be heard by registrars to be increased from £200 to £500. I think I may properly reassure your Lordships that all the remaining changes are either consequential or parallel to those I have outlined.

I ought to take this opportunity of telling the House that I intend to make parallel changes in Northern Ireland. These will increase the upper limit of the civil jurisdiction of the county courts in Northern Ireland from £2,000 to £5,000, which is of course the same; the jurisdiction in equity matters from £6,000 to £15,000, which reflects a lower limit in both cases; and to raise the small claims jurisdiction from £200 to £300 and make other related amendments to the financial limits. I beg to move.

Moved, That the draft order laid before the House on 26th June be approved.—(The Lord Chancellor.)

7.18 p.m.

Lord Boston of Faversham

My Lords, I wish at the outset to thank the noble and learned Lord for explaining the order. These orders tend to be introduced every three or four years, so the introduction of this one, as the Lord Chancellor indicated, is in line with the established trend and I hope your Lordships will approve it. I also wish to endorse what the noble and learned Lord said about the immense importance and value of the county courts in this country.

The noble and learned Lord, with his customary foresight and care, has anticipated the main points I proposed to raise and has dealt with, for example, the question whether the proposed increases are in line with inflation. I will not, if he will forgive me, get involved in a comparison between what the noble and learned Lord described as the admirable efforts of his Government and the lower level of inflation during the final period of the last Government; I will leave that perhaps for another occasion. He also dealt with the other principal customary aim of these orders, namely, to maintain a balance of work as between the county courts and the High Court.

The noble and learned Lord has indicated what approximately will happen regarding the volume of judicial work likely to be transferred from the High Court to the county court as a result of the order. He has similarly also referred to the raising of the registrars' jurisdiction and the likely effect that that will have upon their workload and he mentioned the possibility of the appointment of further registrars in the future. I take it that it will be a while before the further appointments are actually made, and I should like to ask him whether he is satisfied that in the meantime the county courts from October onwards will be able to cope with the increased load.

While referring to registrars, I am bound to say that I have often wondered whether in fact we should not be raising their jurisdiction still further as a matter of principle, anyway. There could of course be a further sizeable saving in costs. They are a very able body of people, and I have never been convinced by the argument that increasing their jurisdiction would lead to a significantly higher number of appeals from their decisions.

I also wish to ask the noble and learned Lord the Lord Chancellor about the increases which he has proposed in regard to the equity jurisdiction under the order. As the noble and learned Lord indicated, it is to be raised from £15,000 to £30,000. Last time, in 1977, the increase was from £5,000 to £15,000, and I am wondering whether the noble and learned Lord is satisfied that the proposed increase from £15,000 to £30,000 is sufficient, bearing in mind that the principal jurisdiction in contract and tort in the county courts this time has gone up from £2,000 to £5,000. Last time, in 1977, it went up from £1,000 to £2,000.

There is just one other matter to which I feel I must refer. It is the concern expressed in some quarters about the proposed increase in the so-called costs sanction from £1,200 to £3,000, to which the noble and learned Lord the Lord Chancellor has referred. In his references he also acknowledged the concern which has been felt in some quarters, and indeed he explained the background to this as well. My noble and learned friend Lord Elwyn-Jones has received a letter from a Mr. Brian Thompson of Brian Thompson and Partners, solicitors, in which Mr. Thompson states he had hoped, that there might well be discussions between the TUC and the Lord Chancellor and that some agreement might be arrived at. I regret to say that on this occasion there were no discussions and there is no agreement. The proposed increase of the so-called costs sanction from £1,200 to £3,000 is very substantial and very drastic. It will affect a large number of claims and will impose a heavy financial burden on trade unions at a time when legal costs are already escalating". I felt it only right to pass on that particular concern which has been expressed and to ask the noble and learned Lord the Lord Chancellor whether he might feel able to comment further upon the fears expressed, and indeed perhaps to take them into account in any further discussions that take place. The noble and learned Lord has already indicated that he has consulted the TUC, and I am not sure whether or not Mr. Thompson's reference to the possibility of discussions is different from that. At any rate I felt it only right to mention that concern. As I say, the Lord Chancellor has already spelt out some of the background to the particular proposals.

So far as the order itself is concerned, and the extensions of jurisdiction contained in it, I would certainly offer the noble and learned Lord full support, and I hope that your Lordships will approve the order.

7.25 p.m.

The Lord Chancellor

My Lords, I am very grateful for the gracious way in which the noble Lord, Lord Boston of Faversham, has received this Motion. Yes, I am satisfied that the county courts can cope. I have no doubt about that. That is the advice that I have received, and I believe it is right. The noble Lord asked whether the registrars' jurisdiction could be raised still further. Well, probably, Yes, if one viewed it in isolation, but of course one must balance the trial jurisdiction of registrars against that of the judge. We thought that what is proposed was about right. I am afraid that it is a long time since I practised in the county court, but it must be remembered that nowadays registrars are usually dual-purpose. Very often they are district registrars as well, and they have an enormous matrimonial jurisdiction outside the kind of trial that we are talking about. Without going into specifics I would absolutely agree with the noble Lord, Lord Boston, that their quality has risen continuously throughout my legal lifetime, and of course their judicial experience is growing all the time. A very high class of person is attracted to such a post. There is no question that, if it were thought right to alter the balance, registrars probably could take trials involving a slightly larger figure, but I am not anxious to increase it further at the moment, for the reasons that I have given.

I had the letter from Thompsons, for whom I have a very great deal of respect, partly because they sometimes briefed me, and partly because I had the pleasure of appearing against them on a number of occasions. But I did not altogether go along with their arguments on this occasion, for the very reason that I gave in my opening speech. Of course, lawyers naturally want to have a greater flexibility, but I have kept the exact proportions at the top level of the sanction rule and at the bottom level I have been slightly more favourable to plaintiffs, if one views it at as a fraction of the maximum jurisdiction, as it will be if the order is passed. So I think that their case proved either nothing at all, or a great deal too much. The sanctions have always existed, and basically I have preserved the status quo.

The other point raised by the noble Lord was about the consultation with the TUC. The TUC wrote me a long and very interesting letter, which very largely covered the same ground as the Thompson letter. The TUC wrote some time ago—I think in April, but certainly quite a long time ago. In consultation with my officials, I wrote to the TUC an equally long reply. At the end of my reply—this is probably the point to which Messrs. Thompson were referring—I said to the TUC that, if it wanted discussions either with my office or with me, I should be very happy to hold them. But the offer was not in fact taken up, I thought probably because the TUC, if not actually content, had other thoughts on its mind and did not want to pursue the argument any further.

The noble Lord also asked me about the equity jurisdiction. What I have proposed is actually a compromise. I hope that I am not disclosing things that I should not disclose. My original proposal was to raise the figure to £50,000, instead of £30,000, and that, I think, would have been quite a good thing. But the profession came down quite heavily against me, and so £30,000 is a compromise figure. On these occasions one likes to carry people along with one if possible, and I hope that they feel that I have taken account of their point of view.

There is of course an argument for the lower figure—I am not sure whether they actually put it forward—and that is that equity jurisdiction is a matter with which the Chancery Division in particular is very familiar, while most of the circuit judges are common lawyers. I see the noble Lord, Lord Foot, here and I am not sure whether this is true of the solicitors' profession. But at the Bar most county court practitioners, too, are common lawyers. So I think they have got something there. I think I would have preferred to have put it at £50,000, as the noble Lord, Lord Boston, seemed to suggest, but these things are questions of judgment and discussion, and the figure of £30,000 was arrived at by those means. I think I have dealt with the various points that the noble Lord, Lord Boston, very kindly made, and I am very grateful to him for the kindly way in which he has received the Motion and for his interest in the matter generally.

Lord Elystan-Morgan

My Lords, I rise very briefly to support the remarks of my noble friend Lord Boston in this matter. There is, of course, ample justification for the order, and, as my noble friend has said, there have been periodic reviews of these limits. I believe that the parent Act, as it were, of county courts in their present form was in 1846, and the jurisdiction then was £20. In 1900 it was £100 for tort and contract jurisdiction, and £500 for equity jurisdiction. Some very bright statistician has calculated that, taking into account changes in the value of money since the halcyon days of 1900, it would give us £2,750 as a common law jurisdiction and £14,000 for equity jurisdiction. So the decision of the noble and learned Lord the Lord Chancellor here is well within those limits.

My Lords, may I make two points very briefly, first so far as the remuneration of practitioners is concerned, and particularly barristers—and I can do this with a great measure of dispassion as it is only very seldom that I am involved in civil matters. There is a feeling among members of the Bar that it would be wrong if, in the future, a barrister handling a claim limited to, let us say, something of the order £3,500, which previously would have been in the High Court, but now conducting that trial in the county court, should find himself receiving remuneration at a very much lower level than previously. If that were so I am sure it would be accepted that it would be wrong and invidious. There is the same responsibility and complexity, and the practitioner has to exercise the same care and the same attention in dealing with it. An assurance on that matter would, I am sure, be very welcome by both sides of the legal profession.

The second matter is on a perhaps slightly more, or even more, political note, and it is this. For my sins I was a Member of the Opposition Front Bench even in 1971, when the Courts Bill went through another place, and I remember then voicing the view that it might have been opportune at that time to have included the county courts within the purview of the Beeching survey. I must say that I find that thought returning to me at the present time in considering whether the criterion of financial limit is in fact the proper one to draw as a line of demarcation between the county court's jurisdiction and that of the High Court.

After all, a claim for £4,000 in a personal injuries case or a claim in equity jurisdiction of £27,000 will involve exactly the same issues and will demand exactly the same application, exactly the same skill, exactly the same experience, from a circuit judge or his deputy sitting in the county court as would a claim slightly above the limits in each case on the part of a High Court judge. This undoubtedly is not the proper forum in which to raise that, but I would be grateful if indeed the noble and learned Lord the Lord Chan- cellor were able to give some indication whether there is any propsect in the future of further thought along those lines.

The Lord Chancellor

My Lords, at this stage I can speak a second time only by leave of the House. I had not realised that the noble Lord, Lord Elystan-Morgan, was going to rise, or I would have dealt with the two speakers from the Opposition Benches together. First, as regards counsel's remuneration in the county court, of course in the Provinces the taxing officer is often the same person as in the High Court, and I am assured that the proposed provisions for Scale 2, which is the highest scale, do give registrars full discretion on brief fees and refreshers. That is some reassurance to him, I hope.

The noble Lord made a very interesting point at the end of his speech. When Beeching was going through in 1971—that is to say, when the Courts Bill was going through in 1971—I wanted to do this very thing, as he did. I was assured that it was far more than my rather humble department could take on board. The Courts Act itself put an immense strain upon the department, and therefore it was not then possible. They told me it simply was not possible to try it then. Curiously enough, during my present term of office the noble and learned Lord, Lord Elwyn-Jones, put the same point to me, and I had put the same point to him when I was in opposition.

I do not think I can offer any immediate prospect of this. What I can say is that I think we are moving slowly towards what I believe to be the ultimate goal. We are approximating the practice of the High Court with that of the county court more and more. We are going to bring out in a relatively short time a completely revised set of county court rules. The existing set (to show how slowly things move in the world) was, I think, introduced in 1936, and was in fact introduced by my father. But we are gradually approximating the practice of the two courts towards one another.

To some extent the registrars, as I say, have jurisdiction as district registrars in the High Court; and, of course, if we look at the people who in fact try the cases in the High Court and the people who in fact try the cases in the county court, you will see that they overlap to a large extent, because sitting as deputy High Court judges you find leading members of the Bar who are also recorders and deputy judges in the county courts. So it is moving in that direction. I cannot promise legislation, and I think myself—and this is the advice I have received—that in order to get it right one would have to have another Commission to square up the nuts and bolts and discuss the implications of it. It is an extremely interesting point, and I am very glad the noble Lord raised it.

On Question, Motion agreed to.