More often than not, businesses find that litigation involves a disproportionate amount of time and money and that the civil justice system in England and Wales is overly complex, bureaucratic and inefficient. Although the reform proposals outlined below are inevitably driven by pressures on the Ministry of Justice budget, the aim is a simpler, quicker and more proportionate system of dispute resolution.
Increasing the small claims track threshold from £5,000 to £15,000
The small claims track reduces costs through increased informality and the relaxation of the normal procedural and evidential rules and allows for fixed costs recovery. The increased threshold will allow many more small businesses to represent themselves.
Increased use of online facilities and telephone appointments
For example, reducing court fees where claims are issued electronically.
Mandatory pre-action directions for money claims under £100,000
These directions would allow for fixed costs at each stage of the proceedings. If the matter proceeds all the way to trial, joint evidence packs would be produced, streamlining procedures and reducing time spent in court.
Encouragement of mediation including the telephone mediation service
Mediation can enable disputes to be resolved quickly and efficiently and at much lower cost. In the right circumstances, it can also enable vital business relationships to be preserved. It is thought that not enough has been done to incentivise parties to use mediation seriously. Greater penalties for parties that fail to consider alternatives to trial are being considered with automatic referral in small claims.
Increasing the minimum amount for a High Court claim to £100,000
This is aimed at encouraging less complex claims to be dealt with at an appropriate level with more proportionate costs.
Providing a more effective enforcement regime
- restricting the intervention of the court;
- allowing debtors' accounts to be traced in order to prevent a debtor avoiding enforcement through transferring monies to alternative accounts;
- making a wider range of bank accounts available for enforcement such as joint accounts, whereby 50% of the funds could be automatically deemed to belong to the judgment debtor;
- allowing judgment creditors to obtain more information on the best way to recover their debt by empowering the court to request information from Government departments and other relevant bodies.
The relevant consultation has now closed and the Government will outline proposals to be taken forward in October 2011. It is to be hoped that the result is more cost-effective justice being delivered through fewer cases coming to court unnecessarily.