§ 8.51 p.m.
§ The Lord Chancellor (Lord MacKay of Clashfern) rose to move that the draft order laid before the House on 20th February be approved [12th Report from the Joint Committee].
§ The noble and learned Lord said: My Lords, it is necessary to seek your Lordships' approval of the draft order that is before the House, in accordance with Section 120(4) of the Courts and Legal Services Act 1990. That section requires affirmative resolutions in both Houses before the draft order is made.
§ The main effects of the order are twofold. First, it will abolish the present financial limits on the jurisdiction of the county courts in most cases. Secondly, it will replace those limits with new, flexible criteria for the allocation of those proceedings over which both the High Court and the county courts have jurisdiction. Before I explain these effects in more detail, it may be helpful to your Lordships if I take a few moments to place the instrument in its context.
§ I am seeking to make the order in exercise of powers conferred upon me by Section 1 of the Courts and Legal Services Act, whose passage through this House was completed barely four months ago. That Act marked a significant step in the Government's overall aim to make civil proceedings simpler, cheaper, speedier and more accessible for those who resort to them.
§ This order takes up the purpose of Section I, an enabling section which is central to these overall aims. In establishing new arrangements for the distribution of proceedings between the High Court and the county courts, the order will give effect to what the Civil Justice Review recommended after a thorough examination of the way the present arrangements operated.
§ Your Lordships may recall that the review body found that too many cases suitable for determination by a county court were being handled and tried in the High Court. That resulted, in its view, in a wasteful use of the resources of the High Court which ought to be reserved for specialist or substantial cases, or cases of importance or complexity. Litigants therefore suffered unnecessary cost and delay when they could have benefited from the cheaper, quicker and more accessible procedures of the county courts.
§ The good sense underlying the review body's recommendation had already been recognised by the senior judiciary who, by practice direction, have been encouraging a better distribution of cases between the High Court and the county courts since 1988. I pay 483 tribute to the judges' foresight and initiative in this. That has resulted in the transfer to the more appropriate forum of the county courts of many cases which would otherwise have proceeded in the High Court. The order to be made under Section 1 provides an opportunity to consolidate their initiative by putting it on a statutory footing, and to go further in some respects. This is made possible by other initiatives that we have recently taken to help the county courts to absorb new work. Among them are the development of trial centres where longer cases can be heard on consecutive days without interruption; the introduction of a computerised summons production centre; and the lessening of the courts' role in handling suitors' cash. These changes have enabled the judiciary and court staff to give a better service, and they prepare the way for the jurisdictional changes now proposed.
§ My department will continue to monitor the workload of the county courts after the new order has come into effect, if it is approved, for I cannot stress too strongly the importance I attach to introducing these reforms at a pace that the courts and court users can comfortably accommodate. That is one reason why the order does not seek to tackle all classes of case at once. I do not intend to introduce further changes until I am satisfied that everyone will be able to cope with this first step.
§ Let me turn now in more detail to the ways in which the draft order seeks to fulfil its aims. I should say at the outset that the order will be supplemented by rules of court setting out the detailed procedures to be followed. It is my intention that these should come into force at the same time as the order which, as Article I states, is planned for 1st July of this year.
§ Article 2 deals with the jurisdictional limits of county courts. The present upper limit of £5,000 will be abolished in most classes of case. Among the limits that are to be retained, at least for the time being, is the capital value limit of £30,000 on actions in equity and probate. As I have said, this step by step approach will enable the department to monitor the effects of the changes in respect of debt, housing and, in particular, personal injury actions, before considering extending the jurisdiction of the county courts to more specialised classes of business.
§ Article 3 of the draft order confers jurisdiction on the High Court to deal with applications for certain remedies in cases where proceedings have been commenced or are about to be commenced in a county court and where the county court is precluded from granting those remedies. This provision is necessary because I intend to make regulations restricting the county courts' power to grant some of the more draconian remedies which raise important issues about the rights of the citizen. I have in mind in particular orders enabling a party to enter premises and seize property in order to preserve evidence; and injunctions freezing the assets of a party pending the determination of a dispute. The Civil Justice Review recommended safeguards in the granting of these remedies when more cases in which they might be sought should come to the county courts for trial.484
§ Articles 4 to 6 provide new criteria for determining where proceedings are to begin. Article 4 states the general principle that where both the High Court and the county courts have jurisdiction in a particular action, the plaintiff or applicant has a free choice of the forum in which to commence. The main exception to this principle is given in Article 5. Paragraph (1) of Article 5 requires that actions for damages in respect of personal injuries of which the value is less than £50,000, must be commenced in a county court. The definition of value for these purposes is set out in Article 9(1) (a); namely, the amount which the plaintiff reasonably expects to recover. I shall return to Article 9 in a moment.
§ The way in which this exception will work, under rules which I shall be inviting the rules committee to make, is that a plaintiff commencing a personal injury action in the High Court will have to certify that he reasonably expects to recover £50,000 or more. Should the High Court consider that the plaintiff cannot reasonably expect to recover such an amount, it will be required to transfer the proceedings down to a county court. If the plaintiff persuades the High Court to allow the case to proceed there, and if it transpires at the end of the case that no reasonable plaintiff could in fact have expected to recover a sum of £50,000 or more, the amount of costs recoverable from the losing party might be reduced. We shall monitor the working of this provision very closely. If it works successfully, I may bring forward proposals in due course to extend it to other classes of case.
§ Article 6 provides the only other exception to the plaintiff's or applicant's free choice of forum. It applies to the audit of accounts provided by public bodies under Part III of the Local Government Finance Act 1982. The requirement here is that the specified proceedings must commence in the High Court.
§ Article 7 sets out the principles determining where a case is tried. The first paragraph states the principle that where both the High Court and the county courts have jurisdiction, an action may be tried in either forum.
§ Paragraph (3) sets out a minimum value for High Court trial by directing that cases of a value below £25,000 shall be heard in a county court. Paragraph (4) sets a maximum value for county court trial by directing that cases of a value of £50,000 or more shall be heard in the High court. I stress, however, that both these levels are presumptive. By that I mean that they can be overridden by the criteria set out in the next paragraph. It is these criteria which also determine the proper forum for trial of a case whose value falls between £25,000 and £50,000, or which has no reasonably ascertainable value.
§ Let me now turn to the four criteria set out in paragraph (5). The first refers to the financial substance of the case. This is to be considered in the context of the other criteria, and not, as at present, by reference to rigid jurisdictional limits. The next two criteria refer to importance and complexity. Paragraphs (5) (b) and (c) give indications of the considerations to be borne in mind. The final criterion determining the forum for trial is whether transfer of 485 a case is likely to result in a more speedy trial of the action. A court will not, however, be entitled to rely on considerations of speed alone when exercising powers to transfer a case.
§ I now move on to Article 8, which deals with enforcement. It provides that county court judgments for the payment of a sum of money of £5,000 or more may only be enforced by execution against goods in the High Court. Where the sum is between £2,000 and £5,000, the judgment may be enforced in the High Court or a county court. A judgment below £2,000 must be enforced in a county court. It is already the position that county court judgments for more than £2,000 can be enforced in the High Court; and, as the present county court limit is £5,000, that article in effect largely preserves the present position.
§ Articles 9 and 10 represent an important new departure. They introduce a more logical mechanism than we have at present for determining the value of an action for the purposes of the commencement and trial provisions that I have outlined. The simplest case is the action for a sum of money. In such actions paragraph (1) (a) provides that the value is the amount which the plaintiff or applicant reasonably expects to recover. If the action is for a known amount, such as in the recovery of a debt, there is no problem. However, if the claim is unliquidated, as, for example, in damages for personal injury, a requirement that the expectation be reasonable will enable the courts to discourage deliberate overvaluation of claims for the purposes of defeating the allocation criteria.
§ A slightly different approach is needed, however, in respect of other types of action. In actions seeking relief other than sums of money—such as applications for possession of land, for injunctions to restrain nuisance or breach of contract, or for declarations about a trust fund—there is unlikely to be a figure which represents the case's value. At present the county courts' jurisdictional limits use several different methods. They use rateable or annual values for actions for the recovery of land, the value of the estate or fund for equity cases where a remedy other than damages is claimed, and the value of the estate for contentious probate matters.
§ The impetus to re-examine the method of valuing non-pecuniary claims arose partly from the abolition —as from 1st April 1990—of domestic rateable values. On examination, however, it appeared that all the methods I have just mentioned were illogical and unsatisfactory. The value of a capital asset—land or a fund—is no guide to the substance of a case in which the dispute is over partial ownership or temporary possession (for example, tenancy). Paragraph (1) (b) of Article 9 therefore provides that the value of such a claim is equal to the amount of money which the plaintiff could reasonably state to be the financial worth of the claim to him.
§ Perhaps I may give some examples. In a landlord's claim for possession of land, the value would be the difference in market value between the land when encumbered and when vacant. In a claim for declaration of a constructive trust of a property, the value would be that proportion of the value of the 486 property to which the applicant claimed to be entitled. In a claim for an injunction to restrain a nuisance such as noise, the value of the claim might be the sum which the plaintiff would need to expend in order to protect himself from the nuisance were his claim to fail.
§ There will be some cases in which no sensible value can be ascribed. The draft order recognises that and exempts such cases from setting a value—they will be assessed purely by reference to the general criteria. It will therefore be possible for the plaintiff to start such actions in whichever forum he chooses, subject to scrutiny and possible transfer should be choose the High Court.
§ Paragraph (1) (c) provides that the value of a claim in which both money and non-pecuniary relief are sought is the aggregate value of both parts of the claim.
§ It is common pleading practice to add a claim for further or other relief to a claim. This is generally just a precautionary measure and does not add significantly to the value of the specific relief pleaded. Paragraph (2) therefore provides that in determining the value of an action such additional claims are to be disregarded.
§ The draft order then goes on to deal with Crown proceedings. I have adopted the principle that the Crown should be in the same position as others so far as concerns the allocation of cases. However, in order to give time to those who conduct litigation on behalf of the Crown to adapt their siting and structure to the new arrangements with the minimum of wasted public expenditure, Article 11 allows a period of two years from the effective date of the order before new proceedings to which the Crown is a party can be transferred to a county court without the consent of the Crown.
§ Finally, Article 12 makes clear that the order will not apply to Family or Admiralty proceedings. Nor, I should add, does it make reference to applications for judicial review. That is because Section 1 of the parent Act expressly reserves such cases to the High Court.
§ The only other matter which I ought to mention concerns the consultation procedure that has been adopted. I am required by Section 1(9) of the Courts and Legal Services Act to consult the Lord Chief Justice, the Master of the Rolls, the President of the Family Division, the Vice-Chancellor and the Senior Presiding Judge before making any order under Section 1. I have done so. There have also been two consultation drafts which have been issued during the preparation of the draft order. The responses received, both from the senior judiciary and from others, have been enormously helpful and constructive. I have taken full account of all that they have said, and many amendments have been made. I am most grateful to all those who have contributed to the final form of this draft order which is before your Lordships, and I can confidently say that it has the broad support of the judiciary, practitioners and the representatives of court users. I beg to move.
§ Moved that the draft order laid before the House on 20th February be approved [12th Report of the Joint Committee]. —(The Lord Chancellor.)487
§ Lord Mishcon
My Lords, I am deeply grateful to the noble and learned Lord for the way in which he has patiently explained the provisions of the order. Having said that—and he may sympathise with my point of view—I think that it is quite dreadful that an order of this importance, which affects the procedures in and the jurisdictions of our courts and the cases of little people, by and large, should be taken at this late hour before an empty House. The order was to have been discussed on another day, as the noble and learned Lord knows. It was postponed because, such was its importance, it was considered likely to arise too late on that occasion. It is thoroughly regrettable that we should be dealing with this important order in a House which is empty except for the small number who graciously occupy it at this hour.
I should like to deal now with some of the points in the order. I venture to say that they are important points. There is no doubt that the aim of the order, which comes under the provisions of an Act which was passed by Parliament, are thoroughly welcome. The main provisions dealing with the upper limits will enable county courts to deal more economically and efficiently with various types of case.
I have only two reservations. The noble and learned Lord wisely said that the transition from High Court jurisdiction to the county court has to be made in stages to ensure that the county courts are not overloaded. I hope that we may have his assurance that even with the limited transfer, there are sufficient resources of personnel able to deal with these important matters which will now be dealt with by the county courts.
The other request that I would make is that as a matter of priority we see to it that, now that in many cases there is great similarity between the county court and High Court jurisdiction, there is a common core of procedural rules. As the noble and learned Lord well knows, that was recommended by the Advisory Committee on Civil Justice.
The noble and learned Lord referred to the new limit in regard to personal injuries, namely, that those cases where the damages are reasonably estimated to be less than £50,000 shall be within the jurisdiction of the county court. It is not an easy matter for a practitioner in personal injury cases to certify, as he will have to do, what the limit of the damages may be, but that is not my main point. My main worry—which is shared by many practitioners—is that within the definition of "personal injuries" come medical negligence cases. Quite apart from the concern of the plaintiff and the worrying nature of an action which involves the good name of doctors and, very often, health authorities, the complexity of an average case of medical negligence has given rise within the profession to a type of practitioner who specialises in this type of case. As a result, judges and Masters of the High Court become accustomed to the special directions which have to be given in such cases.
One wonders whether it is wise to have medical negligence cases incorporated in this category of personal injuries. I suggest that when such cases come before the county court those directions are given by judges, certainly by Masters of the High Court, who 488 are familiar with these actions, which are of great importance to those who bring them and those who have to defend them.
I move on to the small claims court. Your Lordships will be interested to know that as from July of this year the £500 limit is to be increased to £1,000. The small claims court does an extremely useful job. In an informal atmosphere that helps everybody it decides many matters in dispute involving manufacturers, retail shops and consumers. What worries many is that it is the custom of the small claims court to make no award of costs. If we are to increase the limit to £1,000 and that court is to deal with personal injury cases up to £1,000, a very different situation will exist. Of course, it means that there can be no legal aid and, as things stand, no award of costs. I ask the noble and learned Lord to look into that when he remembers, as I know he will, that these days the cost of a medical report by a specialist is between £100 and £200. Indeed, a police report—which in most personal injury cases is vital—costs £38. The court fees would be £43. Those are sums that the little man who has suffered a personal injury just cannot afford to risk. One must remember that the average defendant in a personal injury case is represented by an insurance company which will have no difficulty at all in obtaining legal advice and representation at the small claims court.
I ask the noble and learned Lord to consider what I have said and to see whether personal injury cases should be excluded from the small claims court or, if they are to be included, whether the usual rule in regard to costs should be altered to provide for costs to be awarded in appropriate cases. It may well be within the knowledge of the noble and learned Lord, the Lord Chancellor, that Northern Ireland has just such an exception in its small claims courts. It may be somewhat appealing to him to find that a similar provision is also advocated by the Scottish Consumer Council.
I move on to actions for recovery of land. Noble Lords will realise that in many cases possession is claimed because of alleged arrears of rent or indeed for breach of some covenant. Such actions also include cases in which mortgagees are claiming possession against mortgagors. It is surely just for the defendant in such cases not to have to incur the expense and perhaps extreme inconvenience of having these matters tried in the High Court. It is to be hoped that such cases for recovery of land can be dealt with in the county court in whose area the defendant resides or in which the land involved in the case is situated.
As I said, the concurrent jurisdiction of the High Court and the county court in these matters is not one that should be encouraged in this type of case. I repeat, it should be the county court that has jurisdiction. If the whole of what I am asking for cannot be granted, perhaps we can go back to the old rule, which was, if I remember it, that the case went to the High Court or the county court depending on the rateable value of the land. If that were maintained it would at least improve the situation, because it would largely mean that the people at the lower end of the 489 income scale would be protected by having the cases dealt with as a matter of convenience to them in their local county court.
That brings me to my last point: the convenience of the parties on transfer from the High Court to the county court. When he explained Article 7 of the order, the noble and learned Lord the Lord Chancellor correctly, as one would expect of him, dealt with this matter and the considerations that applied. As the noble and learned Lord pointed out, in Article 7(5) four considerations are to be the criteria. One of them is missing. I am surprised that it is missing but perhaps I have somehow missed an interpretation of Clause 7.
When the Courts and Legal Services Bill came before this House I ventured to move an amendment incorporating the convenience of the parties as one of the criteria which were to be taken into account when a transfer was made to a court. The noble and learned Lord moved an amendment to delete certain words from the Bill and insert the words:appropriate, having taken into account the convenience of the parties and that of any other persons likely to be affected and the state of business in the courts concerned".The noble and learned Lord was good enough to say:In Committee the noble Lord, Lord Mishcon, proposed an amendment to amend the original draft of the new Section 40(4) of the County Courts Act 1984 which would be inserted by Clause 2 of the Bill. As it stood, it provided that proceedings transferred under this section—that is, from the High Court to the county court—should be transferred to such county court as the High Court considered convenient. My objective, as I explained to the Committee, was not to prevent the courts from taking account of the convenience of the parties, but to ensure that wider factors —especially of course the convenience of parties to other cases—could also be taken into account. There was, I think, little or nothing between my aim here and that of the noble Lord, Lord Mishcon, and"—I emphasise these words—I therefore accepted his amendment to require the court to take its decision having taken into account the convenience of the parties.I said at the time, however, that I would hope to be able to come back if on reflection it appeared that the phraseology was perhaps not the most expedient, and that is why I invite the House to consider this amendment. It is designed to render the section a little more elegant and to set out explicitly the other factors which will have to be considered when the High Court decides to which county court to transfer a particular case. 1 beg to move."—[Official Report, 20/2/90; col. 156.]I replied that I was most grateful to the noble and learned Lord because it meant that in the Courts and Legal Services Act the convenience of the parties was included as one of the categories for the High Court to take into account. That is singularly missing from the order. I ask the noble and learned Lord why.
§ The Lord Chancellor
My Lords, I am extremely grateful to the noble Lord for his response to the order; and for his kindness in giving my office notice of the substance of the points that he was to raise. The result is that I am perhaps able to deal with them more concisely than I might have done without that kindness; I take the points in the order in which they were raised.
We have made arrangements for sufficient resources for the county courts. Seventy-two trial 490 centres are offering a continuous hearing in the county court now. That is the essential change in order to make the provision work. As the noble Lord knows better than most, the county courts did a great deal of administrative work in connection with debt collection. They were not geared up to heavy litigation. We have tried to alter that in this way. Over 400 staff have been added to the courts this year. We have also curtailed some of the administrative work that the courts used to do, first by cutting out suitors' cash responsibilities in a good number of cases; and in concentrating the routine work required for the issue of summonses in a great number of cases in the summons production centre at Northampton. We expect that about half of all the county court summonses will be issued eventually at Northampton. We are well up to the target of about 1 million now.
The noble Lord asked about a common core of rules. I am committed to moving in that direction because of the good sense which attaches to the recommendation of the Civil Justice Review in that connection. However, the way to arrive at that is by steady convergence. A Big Bang approach would create difficulties for the professions as well as for the courts. The legislation and rule rounds consultation on such provisions would produce an enormous task over months or years. We are more likely to make progress—I hope that the noble Lord agrees—in seeking to converge the two sets of rules by approaching the matter gradually.
Not all personal injury cases require the specialist attention of the High Court. The noble Lord singled out medical negligence cases. It may be difficult to say that merely because a case is a medical negligence case it is necessarily one of complexity. Various things can happen. For example, liability might be admitted even in a medical negligence case. The mere fact that it is medical negligence does not of itself mean that it would not be suitable. We have the complexity criterion available. If on consideration of a particular case it was thought to be complex, that would be a ground for having it tried in the High Court. It is fair to say that quite a number of medical negligence cases are dealt with in the High Court by deputy High Court judges, some of them being circuit judges. One might therefore receive the same attention under a somewhat different name.
As was said by the noble Lord—and I am grateful to him—the small claims jurisdiction is doing an extremely useful job. I thoroughly believe that that is right. The question of whether personal injuries cases should be included in the small claims jurisdiction, and if so whether special conditions should be made, is one that I am still considering. We shall be developing a small claims regime, and in that consideration I shall take account of the points made by the noble Lord tonight. As yet, I have not reached a concluded view.
I turn to land cases of the type described by the noble Lord in which local knowledge of the case is desirable or in which it would be unreasonable to expect a defendant to travel outside his locality. Such cases will be good reasons for transfer in addition to the criteria established under the order.
491 The noble Lord referred to his success in persuading me that the convenience of parties should be incorporated in Section 2 of the Act. That was not difficult. Because the provision is in Section 2, it does not require to be in the order. The noble Lord has achieved an overriding consideration by having it included in the Act. Therefore the Act binds, and the convenience of the parties in accordance with Section 2 is a criterion which the court must take into account. The criteria in the order are only other criteria not specified in the Act. They are desirable and in a sense complementary to the jurisdiction arrangements made in the order. The overriding consideration which the noble Lord achieved by his amendment and which I modified only slightly overrides that—
§ Lord Mishcon
My Lords, I know that the noble and learned Lord will not mind my intervening in order to clarify the situation. Would the position not have been happier if reference had been made to those circumstances by words such as, "Apart from the considerations to be applied under Section whatever-it-be of the Act, the other considerations were put down"? The order will be looked upon by the profession as being a complete guide. I am a little apprehensive that the important point, which the noble and learned Lord was gracious enough to concede in Committee, will be ignored.
§ The Lord Chancellor
My Lords, the arrangement is that Section 2 of the Act amends a section of the County Courts Act and puts the issue into the county court code. Therefore, it will be before whoever is considering a transfer. The way in which all that information is gathered together in practice is of some importance. One believes that a guide for the practitioner will have the statutory provisions from the primary legislation and the secondary legislation gathered together. It is important to note that it is not only the conditions of the primary legislation but that there are other issues in addition. It would be an encumbrance to include them in the order which is not intended to be complete. The order is only supplementary to the provisions of the Act and is made under the powers contained in it. I desire not to make the order longer than necessary. I hope that in conveying help to practitioners and to litigants generally, we shall be able to give them not only what is in the order but also what is in the Act.
In opening his remarks, the noble Lord, Lord Mishcon, spoke of the hour and of the number of your Lordships present. I can say only that by his kindness the noble Lord has helped to make the hour earlier than it otherwise might have been. Of course, your Lordships make up in quality what we lack in quantity.
§ On Question, Motion agreed to.