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21 February 2014

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Tick followed tock – time wasting on the new CPR clock

Posted by: Nick Johnson

After the raft of changes brought in by the current Government relating to civil procedure it would be a brave man to try and specify their exact reasons for the changes, updates and revolutions. With more on the way it is far easier to cast an eye over those already in force and their impact.

The focus of this piece is on the onset of the newest trend clogging up the Court system, all made possible by changes specifically considered and implemented to reduce costs. The Small Claims limit being increased to £10,000 has seen the birth of a new animal, that of the delaying Defendant Solicitor.

As we know, Part 36 offers and their consequences do not apply on the Small Claims Track. The answer to this growing issue in my opinion would be to make Part 36 offers effective on all claims where Solicitors are on record including Small Claims Track. However, that’s rushing ahead.

With the average Small Claim taking in the region of 6-8 months to work through the Court system, dependant upon the workload of that Court, Defendant Solicitors are granted the knowledge of Claimants having nothing to gain by seeing the case through to trial. With the upper limit of the track being £10,000 this accounts for an incredible amount of cases that are currently sat between proceedings being issued and settlement within the system with no incentive for insurers to settle.

Defendant’s Solicitors continue to treat claims between the £5,000 and £10,000 mark as though they are fast track matters in respect of the demands placed on the Claimant to evidence their claim and yet the Claimant has no protection against an insurer simply allowing the matter to proceed to trial because the case either has not been attended to or a minor point of law is focused upon to the extent that it is almost treated like a test case. As such a vast amount of cases are sat without action week to week due to the economy that Claimant Solicitor must now work under and the lack of a costs threat to a Defendant Solicitor.

Credit hire is possibly the biggest market effected by all of this. There is no shying away from the fact that the Government is conscious of reigning in the massive area of law that is credit hire law. Whether this is done with a true understanding of the niche is for your opinion as reader.

It has been accepted via the Competition Commission among other bodies that legal assistance is a requirement on a credit hire claim. Solicitors costs nonetheless remain at £80 and £100 respectively for the matters on the Small Claims Track and it is here that we find the anomaly.

As a result we have now entered a time of the opportunistic Solicitor on the Defendant side. For a long time the Claimant Solicitor has been lamented for stringing cases out to drive up costs despite their duty to their client yet now the legal costs see-saw has tipped in the direction of the Defendant Solicitor without slowing down to balance in the middle.

As Defendant Solicitors will continue to rack up time on Small Claims under no threat of adverse costs, insurers will continue to pay them for their work (and complain about the cost of funding claims) and Claimants will continue to wait longer and longer for a reasonable settlement.

My proposal on the matter is a re-drawing of the current Part 36 of CPR. As we know Small Claims matters do not fall within the bounds of Part 36 due to there being only fixed costs recoverable.

What if that were to change however. Bear with me on this for a second. Following a point where Solicitors are on record for both parties following proceedings being issued, what if the failure to accept a Part 36 was punishable with a costs award against akin to that of a Fast track matter?

In doing this both parties would be encouraged to settle claims at the earliest possible opportunity thereby benefitting the Claimant with an early conclusion, the Defendant in costs for the same, and the Court in removing a significant chunk of claims from a currently clogged system.

Not allowing offers to be made until both parties are represented would allow for the focus to remain on pre-litigation settlement and would continue to allow for litigants in person to act without risk of a damaging costs order.

A balance between proportionality of costs and procedural accuracy is always going to be a difficult point to reach but in a current situation where an old system favoured Claimant Solicitors and a new system favouring Defendant Solicitors this would go a long way to evening the keel. It is a naïve person who assumes the amount of money contained within this area of law is going to diminish. Why not simply apportion it more evenly?

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Nick is the managing partner here at Glaisyers. Nick promotes a philosophy where all who work for the firm go the extra mile and are open, honest, caring and down-to-earth. Nick is also head of the commercial litigation team.

Nick Johnson - Managing Partner

To discuss how glaiysers can assist you contact Nick Johnson on [email protected] or via 0161 832 4666.

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