By Oliver Kent and Sam Laycock
Disgruntled holidaymakers who have suffered delay at the hands of their airlines are among the potential claimants who may soon find that the familiar phrase, “I’ll see you in court”, doesn’t quite have the same impact it used to. Enter: the ‘Small Claims Paper Determination Pilot’ (“the Pilot”). Introduced under the 143rd Practice Direction Update as PD 51Z1, this update applies to proceedings issued after 1 June 2022 and allows the Courts to determine the outcomes of matters allocated to the small claims track without a hearing (i.e. on paper) and ultimately, without reference to the parties concerned.2
Whilst the removal of the right to a final hearing may come as a shock to many, it is worth noting that the Pilot will only apply in select County Courts across England and Wales, namely those in Cardiff, Bedford, Guildford, Luton and Manchester. It will run for two years from 1 June 2022 to 1 June 2024, unless extended.
Determining whether a small claim is suitable for determination without a hearing
Paragraph 4 of Practice Direction 51ZC sets out the procedure and criteria for determining whether a small claims matter is suitable for determination without a hearing.
Paragraph 4.4 lists some examples of claims that ‘may’ be suitable for determination without a hearing, including:
- a claim for compensation for flight delay pursuant to EU regulations;
- claims arising out of the issuance of a parking ticket on private land; and, perhaps most significantly
- any other claim of £1,000 or less by value where there is no significant factual dispute which requires oral evidence and the issues are not of such complexity as to require oral advocacy.
The Pilot will not apply to claims for housing disrepair or those that fall within the RTA Small Claims Protocol.
In terms of the criteria the Court will apply, the Pilot simply states that this is a matter of judicial discretion to be exercised in accordance with the Overriding Objective.
What say then, if any, do the parties to a dispute have in the Court’s decision? An amended N180 Directions Questionnaire has been introduced and requires the parties to state whether they consider that the claim is suitable for determination without a hearing; and if not, why not.
Where the Court exercises its discretion, it must provide its reasoning in a ‘note of reasons’.
The introduction of the Pilot comes at a time when the already extensive backlog of small claims in the English Courts has grown even further following the pandemic. The statistics perhaps speak for themselves; the mean time for a claim on the small claims track to reach trial (from issue) was 50.7 weeks in 2021. This was approximately 13 weeks longer on average than the year before lockdown and represents the largest increase since the introduction of the CPR in 2000.3
The Pilot follows the introduction of the Online Civil Money Claims pilot in 2017, which itself aimed to make small claims quicker (specifically for unrepresented parties) by moving the bulk of the process online. Whilst participation in that pilot is voluntary at the option of a claimant (a claim can be removed from the process at the request of a party), the same cannot be said about the Pilot, which will ultimately allow the Court to control which claims should be decided at trial. In that context, it is hard to see the introduction of the Pilot as anything other than an attempt to clear the backlog and cut waiting times.
This is even more evident when you consider the Courts chosen for inclusion in the Pilot. It is no coincidence that the County Courts which have been selected are all close to major airport hubs. No doubt those Courts already handle a substantial amount of flight delay claims and, given the state of the aviation industry at the moment, this figure is only likely going to go up.
Will the Pilot work? That remains to be seen, although if you measure success purely by waiting times, then the Pilot is likely to be highly successful. Indeed, removing what is perhaps the most unpredictable and time-intensive part of the small claims process is undoubtedly going to result in efficiencies. In theory, it will allow those claims which are deemed suitable for the Pilot to be determined on paper in a much shorter timeframe, whilst also freeing up District Judges to manage other hearings such as CCMCs, as well as actually determine claims that do (according to the standard set by the Pilot) require a hearing.4
But what of the wider impact on small claims? Eagle-eyed readers will have spotted that the list of examples provided by the Pilot of potentially suitable claims is non-exhaustive. That means that, whilst at first glance it may appear that the Pilot does not apply to claims valued above £1,000, in reality it can apply to claims valued all the way up to the small claims limit of £10,000. With the only limit on the Court’s discretion being consideration of the Overriding Objective, there is a real risk that some parties will be unfairly denied their moment in Court.
The MOJ has responded to criticism that the Pilot is the first step in denying people with small claims the right to a trial, confirming that there are sufficient safeguards in place to ensure that those that want ‘want their day in court’ can have it.5 One of those ‘safeguards’ is enshrined in paragraph 6.1 of the Pilot, which states that whilst dissatisfied parties may not apply to set aside an order that a claim be determined on paper under CPR 27.11, they may seek permission to appeal it under CPR 52.3. Consideration of such an appeal will take place (you guessed it) without a hearing. Of course, this may not be enough and the Law Society have indicated they will be monitoring the situation closely.
However, the danger here is more than just the depravation of the right to a hearing: it is the creation of a hierarchy of claims. Reflecting on the title of this post, what business is it of the Court to say that a claim for flight delay is less worthy of a hearing than a slightly higher value claim for a defective product? At this firm, we strive to offer the same quality of service to all clients, regardless of the size or nature of the matter, and we treat our pro bono clients the same as we treat those that can afford to pay. Whilst clients might expect that one matter may require a different level of fee earner from another, they would probably raise an eyebrow (and justifiably so) if we operated to different quality standards for different matters. Yet, that is essentially the effect of the Pilot on the service provided to parties by the Courts. To use an aviation analogy, some parties will get to fly first class, whilst others will be relegated to economy.
- The current procedure for claims on the small claims track under CPR 27.10 provides that the Court ‘may’ deal with a claim without a hearing, but only if all the parties agree.
- MOJ quarterly stats from March 22.
- Some courts list multiple small claims hearings at the same time with the result that many have to be adjourned for a later date when the claim before overruns.