Civil Justice Council interim report on resolution of small claims: current practice and future changes

Date published

27/07/2021

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The Civil Justice Council’s interim report – ‘The Resolution of Small Claims’ – was published in June 2021.

The report considers the changes to the way in which small claims have been processed by the courts during the pandemic and how these adaptations could be taken forward to improve the way such claims are handled and resolved.

Background and key issues

The report concluded (by way of a summary) as follows:

  • The judiciary and court staff successfully progressed small claims to conclusion and final hearing where needed, despite limitations on the ability to hold in-person hearings, using remote means.
  • Lessons could be learned post-pandemic “from the methods adopted within different courts”.
  • Best practice should be identified and analysed. This will be a two-phase process – identify “the current and approaches to the resolution of small claims and make recommendations as to best practice” (set out in the interim report), and then an expanded working group to consider wider issues arising.
  • Improvements in the resolution of small claims “would reform the litigation experience for by far the largest group of court users; litigants in person with modest financial claims”, whilst maintaining public confidence in the civil justice system and allowing “limited judicial and administrative resources to be properly focused”.

Report recommendations

By way of a summary, some of the key recommendations include:

  • HMCTS should ensure that every case in which the parties opt for mediation receives a mediation appointment before a final hearing.
  • ‘Directions’ Questionnaire should seek consent to a remote hearing and if the parties agree, a pre-trial settlement hearing or early neutral valuation.
  • Review of third-party mediation pilots with a view to using private third-party mediators to make-up any deficit in resourcing of mediation.
  • Amend CPR rules to allow greater flexibility when a preliminary hearing takes place.
  • Further evaluation of “the benefits of the practice of preliminary hearings in operation at Birmingham and Hereford as compared to practices at selected other court centres” to evaluate their effectiveness.
  • Court centres should give consideration to implementing listing of preliminary hearings at directions stage, pre-hearing triage before a final hearing using checklists to organise final hearing details, and ‘blitz’ hearings to deal with backlog of cases (paragraph 81 of the report, for example, refers to “dedicated back-to-back RTA lists once per month”).

The key issues identified for further consideration (as set out at paragraph 162 of the report) were:

“a) Proportionality and the small claims procedure (including different rules for claims under a modest financial limit);  

  1. b) Pre-issue and post-issue mediation;
  2. c) Pre-issue information;
  3. d) Better guidance for litigants and directions in simple language;
  4. e) Harmonisation of directions;
  5. f) The impact of the changes to RTA personal injury claims;
  6. g) Written/template judgments;
  7. h) Guidance as to when the remote hearings may be appropriate in small claims.”

Issues beyond an overview of current practices

The Working Party identified a number of issues beyond an overview of current practices:

Proportionality

The report questions whether is it correct that Part 27 of the Civil Procedure Rules allows claims for £90 and for £9,999 to be treated in the same way and allows the same appeal rights (when the handling of non-small claims are split into different tracks according to their respective value).

The report also considers “whether a disproportionate amount of the court’s resources is devoted to small claims hearings in the lowest value cases”.

Mediation

Paragraph 57 of the report states that the Working Party considers it likely that in relation to small claims a “significant percentage of cases which settled after judicial intervention at a preliminary hearing would have settled before the case reached a court if a mediation appointment had been offered.” It further notes that: “Adequate resourcing of the mediation service is needed based upon the lower relative costs of the time of a mediator” as opposed to those of a judge.

Pre-action conduct and protocols

The report also observes (at paragraph 108) that: “In the experience of the Working Party, litigants in person rarely engage in adequate pre-action correspondence and discussions.” The Working Party calls for “clearer signposting” by HMCTS to the Practice Direction – Pre-action conduct and protocols, to help improve this.

What changes could be made?

From the report it is clear that the following are matters which are being carefully considered:

  • An increased use of remote hearings, whether by telephone, CVP (Cloud Video Platform) or Microsoft Teams.
  • Standardised Court Directions applicable to all cases and issued automatically.
  • Automatic case management of claims using a “case builder” process.
  • Ensuring these type of claims are handled consistently with the new RTA personal injury reforms.
  • Application of dispute resolution hearings at a very early stage of a claim similar to that successfully adopted during the pilot scheme in Birmingham, which led to almost 50% of such cases settling at that stage. (see paragraphs 125 to 134)
  • Consistency of rules across all the country (the flexibility of the rules associated with small claims has led to a significant discrepancy across different regions in how these claims are handled).
  • Third party or court led cost-effective mediation.
  • Potentially obligatory mediation – this is clearly on the horizon and has much support with key stakeholders, subject to resolving issues surrounding education, funding and resources – see recently published report from Civil Justice Council – Compulsory ADR – June 2021.
  • Wider use of so-called “blitz sessions” to resolve a significant number of cases in a short space of time.

Comment

Provided that the quality of the court process is maintained, the review and potential reforms are to be welcomed, as a streamlining of such claims should bring the opportunity for cases to be progressed more efficiently and at a reduced cost.

Alongside any changes, there should certainly be safeguards in place to ensure that unmeritorious claims are not allowed to succeed, and to discourage spurious claims from being pursued under a perception that insurers will inevitably make some monetary offer to settle.