Civil Justice Reform

Date: 09/02/12

Civil Justice Reform - Government proceeds with caution

In a long awaited response to the Solving Disputes in the County Courts Consultation, the Government has agreed a package of measures to reform the civil justice process.

Whilst recognising from the responses that there is an appetite for reform in a number of areas, the Government has adopted a cautious approach.

The plans for reform include the following measures:

An increase in the financial limit of the RTA PI Scheme to £25,000 – consideration will be given to the timing of the extension, following a full evaluation of the existing Scheme and publication of a final impact assessment of the proposed extension.

Extension of the RTA PI Scheme to EL & PL claims - the Government acknowledged the concerns raised in relation to issues of causation and contributory negligence. Consequently, while the plan is to introduce a scheme for such claims, there will be further consultation with key stakeholders to agree the detail.

Expansion of the RTA PI Scheme to clinical negligence claims - the MoJ also intends to work closely with the National Health Service Litigation Authority (NHSLA) and the Department of Health to evaluate their pilot scheme for clinical negligence claims before considering the introduction of a similar scheme for low value clinical negligence claims.

No development of mandatory pre-action directions - the Government is not proceeding with the development of mandatory pre-action directions for money claims under £100,000 until it has considered the effectiveness of the current pre-action protocols and whether and how these could be simplified to ensure a more streamlined and cost effective process.

Extension of the fixed recoverable costs regime – the Government intends to extend the system of fixed recoverable costs, subject to further discussions with stakeholders on the detail of how best to extend, to include claims up to a higher value and across a broader range of personal injury. This will impact on fast track claims in particular.

Increase in the small claims track limit - the small claims ceiling will be increased to £10,000. However, the Government aims to further increase the limit from £10,000 to £15,000 in the future, after full evaluation of the increase to £10,000. There will be no change to the current limit of £1,000 for personal injury and housing disrepair claims.

A change to CPR Rule 26.7(3) - to allow the judiciary to refer business-to-business disputes and other suitable cases with a dispute value over £10,000 to the small claims track without requiring the consent of the parties. The judiciary will also have the option of referring more complex cases, with a case value below £10,000, to the fast track if that is  considered appropriate.

Automatic referral of all small claims to mediation - this does not mean compulsory mediation, but rather a requirement to engage with a small claims mediator. As further analysis is required on how the service should best be delivered, it is likely that in the first instance, it will only apply to cases with a value of up to £5,000. Once that has become established, consideration will also be given to automatically referring other cases up to £10,000.

Paper determination of small claims - parties in low value small claims track cases should be given the opportunity to choose whether their small claim is determined on paper, but only if the judge agrees that the case is appropriate.

No increase to fast track limit – respondents were evenly divided on an increase but no further increase has been recommended since it was only in 2010 that it was increased to £25,000.

Increased threshold for non-PI claims in the High Court - the financial limit below which non-PI claims may not be commenced in the High Court will be increased from £25,000 to £100,000.

Establishment of a single county court – this will operate as a single national entity for England and Wales.

COMMENT

EL/PL extension

The Government's way forward should be seen as reasonable and reflective of the responses to the consultation. They seem to want to follow a considered approach. Before any change on EL and PL there will be a full evaluation of the RTA PI scheme and a final impact assessment.

The way in which the scheme would deal with causation and contributory negligence arguments, both of which are found much less often in motor claims, needs to be bottomed out, as if they are not, it will simply lead to high numbers of claims dropping out of the process.

There is no mention of disease claims in the reform package. The implication must be that the Government intends that disease claims will be included but whether that in fact happens is in our view still open to doubt. The further consultation with key stakeholders to agree a scheme would, we expect, show whether or not it was realistic to set up processes covering disease claims. Alternatively, it may reveal too many differences with that type of claim, leading to the conclusion that the inclusion of disease cases cannot realistically happen at least in the next wave of matters to be included.

Fast track - fixed recoverable costs

The intention to move ahead towards fixed recoverable costs is only briefly set out in the Government's plans. This reflects the view of Jackson LJ, and Lord Woolf before him, that costs on the fast track should be fixed for the whole of a case. The Government needs to recognise that this should be taken forward so that it is in place by no later (and hopefully sooner) than when the RTA PI scheme is extended. This is an important safety net, as if there are no fixed costs on the fast track, claimants will have every incentive to try to get cases out of the Scheme into ordinary litigation where they might hope to recover much greater levels of costs. This is an issue which is already emerging with the RTA PI Scheme and one which we highlighted in our recent update Guide to costs issues in low value personal injury claims. If the differential is less due to costs on the fast track being fixed, then there will be more incentive to keep cases within the portal structures - the Government's main intention after all.

Timescale

The Government's response is, perhaps unusually, free of expected timelines. This may be because it is accepted that the proposals involve significant philosophical and structural changes for certain types of case, and the fact that the consultation may have been taking place too early in terms of being able to properly assess the way in which the RTA PI Scheme  is operating. It might also be because of the substantial work ahead, including more time for assessment and evaluation of the Scheme, final impact assessment and further consultations regarding its extension. The fact that we are not hurrying towards tight timelines is slightly unexpected but welcome nevertheless.

Change is certain

The claimant lobby will again be unhappy and may feel that with LASPO, abolition of referral fees, and Löfstedt in the context of EL and PL, change is all around them. They will need to adapt to these changes. Sabre rattling as to anticipated withdrawal from certain types of work should be expected but is unlikely to succeed as the Government seems determined to effect change as emphasised by the Prime Minister in his speech to business leaders in January. It will need to be accepted that we are in a time when significant changes are inevitable and that both the political climate and economic conditions are in favour of change. On reflection, claimant advisers may come to accept that change will follow and that all stakeholders need to engage to work out the detail of the important aspects which are now to be resolved.

To read the Government’s response in full click here.

For further information, please contact:

Simon Denyer, Head of Occupational Health (Author)
DD: +44 (0)161 604 1551
Email: simon.denyer@dwf.co.uk

Steven Dawson, Head of Costs
DD: +44 (0)113 261 6118
Email: steven.dawson@dwf.co.uk

Nigel Teasdale, Partner, Motor team
DD: +44 (0)1772 554264
Email: nigel.teasdale@dwf.co.uk