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Significant reform to court procedure

21 February 2012

In March 2011 the government published a consultation paper Solving disputes in the county courts: creating a simpler, quicker and more proportionate system.

A consultation on reforming civil justice in England and Wales.

It set out and sought views on proposed reforms including changes to the financial limits for claims in the High Court and automatic referral to mediation in certain claims.

The government’s has just published its response, following the consultation process, agreeing to changes in the system in four main areas.  The overall aims are to deliver a justice system that prevents escalation of disputes to court, where courts offer more efficient and quicker services if needed, where judgments can be enforced fairly and where costs are borne fairly.  Amy Gates summarises the main changes.

Alternative dispute resolution

  • Initially it is likely that claims up to £5,000 will be referred automatically to mediation (the new financial limit being £10,000). The aim is to extend this to all small claims in the longer term.
  • It is also proposed that parties to low-value small claims cases should be allowed to decide whether the claim is determined on paper provided the judge agrees.

Structural reforms

  • It is proposed that a single county court will be established to operate as a single national entity, allowing claims to be handled electronically and then allocated across neighbouring courts.
  • Equity claims will be allowed to be commenced in the county court if the financial limit is under £350,000 (£30,000 is the current limit). Non-personal injury claims will no longer be allowed to be commenced in the High Court if the financial limit is below £100,000 (£25,000 is the current limit).
  • The power to grant freezing orders may be extended to certain circuit judges in the county courts.
  • Certain specialist proceedings will be removed from the jurisdiction of the county courts and will be placed under exclusive jurisdiction of the High Court.
  • High Court judges will be able to sit as judges in the county court if necessary.

Debt recovery and enforcement

  • It is intended that procedures for obtaining third party debt orders and charging orders will be streamlined.
  • The aim is to implement certain provisions of the Tribunals, Courts and Enforcement Act 2007 so that charging orders will be allowed where instalment orders are in place and there will be a minimum threshold of £1,000 in respect of applications for orders for sale where the debt is under the Consumer Credit Act 1974.

Preventing costs escalation

  • The aim is to extend the system of fixed recoverable costs and increase the financial limit for the fixed-cost simplified claims procedure for road traffic accident claims to £25,000. Similar schemes may be introduced for public liability and employers’ claims and possibly even low-value clinical negligence claims.
  • The financial threshold for small claims will rise from £5,000 to £10,000 initially and then possibly to £15,000. Judges will be able to refer business disputes worth over £10,000 to the small claims track without the consent of the parties. They will also be able to refer more complex cases with a value below £10,000 to the fast track. There is no intention to increase the fast track financial threshold, which is currently £25,000.

It is too early to know when the proposed changes are likely to come into effect but we will keep you posted.

As always, if you need commercial and pragmatic legal advice, we’re here to help so please get in touch.

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Disclaimer: All legal information is correct at the time of publication but please be aware that laws may change over time. This article contains general legal information but should not be relied upon as legal advice. Please seek professional legal advice about your specific situation - contact us; we’d be delighted to help.
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Nick Cox LLB (Hons)
Consultant, solicitor
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