February 2022

On the last working day of January 2022 the final piece in the jigsaw of interlocking reports and consultations addressing the reformed civil justice system was published.  The Report entitled “The Resolution of Small Claims” (the Report) is here.

Introduction

The Report recommends improvements to the system for dealing with tens of thousands of claims worth less than £500. In short it is proposed that such claims are subject to compulsory Alternative Dispute Resolution ((A)DR) post-defence with (A)DR used as a stick to encourage parties to engage in (A)DR before issuing any Court proceedings.  If any party refuses to engage with (A)DR then, it is proposed, the claim will be stayed and the Court will be able to order the party at fault to pay costs – something which is not usually possible in Small Claims cases.

I should explain that the letter A appears in brackets in the abbreviation (A)DR because in England and Wales we are encouraged by Senior Judiciary to regard processes such as adjudication, mediation and neutral evaluation as Dispute Resolution not as Alternatives to Dispute Resolution. Dropping the adjective “Alternative” from ADR is a step I called for in my speech to the Civil Justice Council’s ADR Workshop in February 2018.  It is encouraging to see that idea gaining traction.  

Background to the proposals

This approach to resolving Small Claims cases is the 21st Century’s answer to the County Courts Act, 1846 – an Act which introduced speedy, informal procedures for lower value claims in the 19th Century.  

In 2019 there were a record number of Small Claims cases with Government statistics showing 114,349 cases.  The Report notes (in para 3.14) that in 2019-20 the number of claims for less than £500 was 47.92% of all Small Claims cases; that is to say, some 57,000 cases.  

Cycle times are increasing with the average wait before a final hearing take place growing longer despite case numbers falling due to the Pandemic.  The Government announced in December 2021 that:

“The mean time taken for small claims … to go to trial was 50.7 weeks…, 12.6 weeks longer … than the same period in 2019…. 

It is against this background that the recommendations in the Report must be understood.

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Small Claims and (A)DR

The history of Small Claims cases and (A)DR has not been untroubled.  An initial pilot of claims up to £300 involving the option to opt-out of mediation provided by telephone using Court staff trained for the task, the Small Claims Mediation Service (SCMS).  In April 2021 that scheme was extended in scope to cover claims up to £10,000 in value; that is all Small Claims cases.  However a worrying trend emerged from these pilots – 67% of parties were opting-out of the mediation scheme.  The Courts are investigating why this should be so.  Perhaps understanding why most people chose to opt-out will not matter very much as the Report recommends compulsory ADR once a Defence has been filed.

There are 20 Court employees trained to mediate 57,000 Small Claims cases for an hour each working day.  No need to do the arithmetic to understand that keeping on top of that case load will be challenging.  All the more so because the SCMS has been criticised in the past for administrative failings and for want of investment.  It does not help that the mediations are not managed through a secure, Cloud-based platform.  Recent improvements include the introduction of a centralised diary for appointing mediators which has helped but, whilst this is a welcome development, it is clear that the task of mediating 57,000 cases is beyond the very limited resources available to the SCMS.

The (A)DR first policy

Hence it is unsurprising to see recommendations urging (A)DR be undertaken in the period before Court proceedings are issued (the Pre-Action phase) and the desire to revitalise local mediation networks and to encourage the use other forms of (A)DR (such as neutral evaluation) to resolve some of those 57,000 cases before they are issued in Court.

Zoom might be for (A)DR hearings but what will be needed is online management of the process!

The use of adjectives to describe making the system “efficient” and “effective” are welcome as well as proposals for more and better online resources.  The Court reforms coming in 2022 or 2023 will put the management of the Pre-Action phase online enabling parties and (A)DR neutrals to work collaboratively in a secure space.  

It is pretty obvious from the Report that this is a holding exercise pending the new digital systems being put in place once the Online Procedure Rules Committee gets going later this year.  Nevertheless the Report lays the groundwork for the shape of the reformed approach which will, before long, be largely available online.  Suggestions in the Report that more Government funding will be needed to expand/improve services may be met with disappointment and an increasing reliance on the private sector to join the dots of the reformed system.

Tony Guise

About Tony

Tony N. Guise | Director DisputesEfiling.com Limited


Tony qualified as a solicitor in 1986.  In 2003 he founded his own firm, the first commercial litigation niche practice in the country.

A Past President, London Solicitors Litigation Association (2002-2004), Tony founded the Commercial Litigation Association and was its first Chairman (2007-2015).  Member, Civil Justice Committee of the Law Society of England (2008-2016).

Tony has been deeply involved in the reform of the civil justice system in England and Wales for the past 26 years.  In 2016 Tony turned his attention full time to the introduction of IT into civil justice and founded companies dedicated to this market.

 

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