Changes ahead for court small claims actions

Businessman and woman signing document
David Alexander By David Alexander, Partner and Head of Debt Recovery at Gilson Gray LLP

7 November 2016

Changes to the way courts deal with smaller debt actions will change on 28 November 2016. David Alexander highlights what is changing and its likely impact.

Wholesale reform of the Summary Cause and Small Claims rules comes in to play on 28 November 2016. Seven years after the Gill Report, the Act of Sederunt (Simple Procedure) 2016 introduces brand new procedures and forms which will apply to all actions seeking payment of sums below £5,000; the Simple Procedure Rules.

Purpose

The “old” Summary Cause/Small Claims rules were regarded as being too complicated. The man on the Clapham Omnibus had difficulty understanding them and the legal jargon they contained. He did not like appearing in court, where the adversarial atmosphere confused and intimidated him. Further, there were two different sets of rules (Summary Cause and Small Claims) when there could easily be just one.

The purpose of the new Rules is clear. They have been drafted in plain English such that they are easy to follow and easy to use. As Lord Carloway has stated;

“The Simple Procedure has been designed with the party litigant in mind, using accessible language and incorporating user-friendly guidance into the rules.”

The Big Changes

On the face of it, the Rules represent a major sea change in this area.

For a start, the language is different. Pursuers are now “claimants”; defenders now “respondents.” Cases are no longer sisted; they are “paused.” Documents are now lodged with a “List of Evidence Form” instead of an Inventory of Productions. Specifications of Documents are out; “Recovery of Documents Applications” are in.

The adversarial style of litigating is expressly stated to be no longer appropriate in such actions. Alternative Dispute Resolution is encouraged, as is negotiation. Case Management Discussions (ie conference calls with Sheriffs) have been introduced.

Documents can now be submitted electronically, mirroring the position that has existed in England for many years. An online Integrated Case Management System will apparently allow parties to commence actions, submit documents, track the progress of their cases and pay fees online, thus speeding up the whole process.

Court Orders under the Rules have been standardised and are, you’ve guessed it, easy to follow. A Schedule to the Rules contains a list of the different orders a Sheriff may make. Sheriffs can specifically dismiss cases at any time, and in private without hearing the parties to the action. This will allow them to weed out cases with no merit. And there is no place in the Rules for Counterclaims; they are not competent.

More of the same?

Whilst at first blush these Rules do seem like a major innovation in line with Lord Gill’s wishes, I am not overly convinced they are.

Setting aside the change in language and the online access, the “new” procedures do seem pretty familiar to any practitioner who has experience of the current Summary Cause/Small Claims regimes. Sheriffs are already encouraged to send as many cases as possible to mediation. They often dismiss cases which they consider have no merit without fixing a full hearing thereon. Parties are always encouraged to negotiate.

Only Time will Tell

Only time will tell how effective the new Simple Procedure Rules will be in practice.

I have my doubts whether the courts or my fellow litigators will be happy to set aside their adversarial hats when dealing with these cases. I also have doubts how efficiently the Sheriff Courts will be able to deal with these changes, coupled with the introduction of a new Case Management System. They are already under staffed and struggling with their current workload.

Guidance is still awaited with regards to the issue of expenses. It is this issue which will determine whether clients decide to litigate or not. The expenses currently recoverable from defenders in defended Small Claims actions are severely limited; in Summary Cause cases less so.

I strongly suspect the position will remain the same, if not worsen, under these new Rules. In these circumstances I suspect that most creditors and Insolvency Practitioners will want to discuss contingency feeing structures when looking at recovering debts or books of debts under their umbrella, rather than litigate and face the prospect of limited recoverable costs and the prospect of being ordered to attend a Mediation!

So Watch This Space

Given the imminent arrival of these new “Simple” Rules, now is the time for you to review your recovery procedures, and to consult your solicitor about those.

Topics

  • Business issues
  • Insolvency
  • Legislation

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