The Ministry of Justice has recently issued a major report and consultation exercise about the procedures in and use of the County Courts. The report describes the system in this way
Civil justice is the area of law that deals with everyday problems such as recovering and enforcing unpaid debts, resolving civil disputes across a range of areas including debt, consumer and contract law and personal injury, and protecting individual liberties. It affects the lives of millions of people every year.
In 1996 a set of reforms, the Woolf reforms, named after Lord Woolf who set them up, came into force. They have been considered reasonably successful, however there remain great problems, for example:
- there are no real sanctions if parties act unreasonably
- there are delays and inefficiencies within the court system
- the cost of litigation is often disproportionate to the amount at stake and sometimes exceeds it
So what proposals have been made and how will these affect the housing sector? Here is a very brief summary of the first part (I will look at the rest next week):
Mandatory ‘pre-action directions’ for all claims up to £100,000, perhaps with a compulsory settlement stage.
What does this mean? Well it means that there would be procedures which would have to be followed before anyone could bring a claim for any kind of financial compensation. People would be encouraged to deal with the problem in some other way, for example by using Ombudsmen or trade association schemes.
There would then be an evidence gathering stage where they would have to adhere to a strict timetable, followed by the negotiation/settlement stage. This would be
essentially a stocktaking stage, where most of the evidence has been gathered and the parties will be required to try to settle the claim via mediation or another dispute resolution process, which could be conciliation, arbitration or the parties arranging a settlement conference.
This may be made mandatory. It would be only after this had failed that the parties would be allowed to have a court trial.
A system of fixed recoverable costs for different stages of the dispute resolution regime
This means that the winning party would only be able to recover pre-set amounts from the losing party by way of a costs award, irrespective of how much they actually had to pay their own solicitors.
This already applies in standard housing repossession cases where landlords can only recovoer fixed costs if the possession order is made at the initial hearing.
The behaviours detailed in the Pre-Action Protocol for Rent Arrears, and the Mortgage Pre-Action Protocol, to be made mandatory.
At present these protocls only apply to mortgage companies and to social landlords. Feedback I have had from people indicates that these protocols are ignored far too often and I suspect that making them mandatory would give greater protection to tenants and borrowers.
Whether similar protocols should be imposed also on private sector landlords is another matter.
Encouraging use of the court online services such as Possession Claims Online (PCOL)
The main proposal here is that landlords or solicitors who don’t use it being limited in the costs they can recover from the defendant. The probably won’t have much effect because the chances of ever getting back rent from a tenant being evicted for rent arrears is pretty low, bringing the chances of ever actually recovering the legal costs in most cases down to zero. Most landlords do not expect this and just want their property back.
Probably the best way to encourage use of PCOL would be to guarantee an earlier hearing date. However this may be unfair on cases where the PCOL system cannot be used, for example because the rent arrears history is so complex it would be uneconomic to spend the time entering it into the PCOL system.
Increasing the small claims threshold from £5,000, probably to £15,000
In housing related litigation this would affect claims by tenants to recover their deposit (eg where they cannot use the free adjudication systems for some reason) and claims by landlord for damages done to their properties by tenants. However so far as disrepair claims by tenants are concerned, the suggestion is that the limit remain at £1,000.
An automatic referral to mediation in Small Claims cases
Most people don’t really understand mediation. Many litigants consider it to be some sort of wishy washy inferior procedure, which is unnecessary because (of course) they are in the right and want their day in court, so the other side can be shown up as the lying toerags that they are.
However this is not a helpful attitude. There are always two sides to every dispute and usually their opponent has a genuine issue – the problem being often that the other party does not really understand or appreciate what this is. Either because it has not been explained to them properly or because they simply don’t read the correspondence (considering it to be just a load of piffle not worth bothering about).
Mediation is a chance for people to sit down and talk things through, via someone independent. Plus it is possible to reach agreements in the mediation process which might be difficult to achieve in a court setting. For the right cases it is an excellent alternative.
Some small claims hearings to be conducted by telephone or on paper
In housing we already have the accelerated procedure which is almost entirely paper based. As are adjudications for tenancy deposit disputes. So paper based dispute resolution can work in the right type of case.
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The report goes on to consider enforcment of judgments and some more fundamental reforms of the justice system. However this post is getting a bit long so I will look at these next week.
You can read the report and download the consultation questionnaire (72 questions apparently) here.