Constitutional Affairs Committee

Press notice No.10 of Session 2005-06
6 December 2005




Publication of Small Claims Report

MPs urge improvements in access to justice for all

The Commons Constitutional Affairs Committee today releases a report urging the Government to review the maximum limits set on the small claims system in the county courts. At present the small claims system handles any personal injury or housing disrepair claim up to £1000, a figure that has not been adjusted for inflation for some time.

This means that even the most minor personal injury claims, where the injury is slight and recovery complete-exactly the situations in which the small claims procedure should be used-fall outside the system and therefore risk incurring legal costs that are disproportionate to the claim being made.

Although lawyers are not banned from the small claims system, they are not allowed to claim their normal level of costs. Evidence given to the Committee suggests that raising the limit to £5000, as suggested by the Better Regulation Task Force, would mean that the majority of personal injuries claims would fall into the small claims system, which could be a disadvantage to claimants in more complex cases who would have to act without a lawyer. The Committee decided £2500 would be a sensible limit for both personal injury and housing disrepair, without impeding access to justice.

The Committee concluded that the small claims system was essential both for ensuring access to justice for many people and avoiding parties incurring disproportionate legal costs, but it also raised certain concerns:

»The enforcement of judgments is highly unsatisfactory, with only one third of judgments paid in full and no payment at all made in a further third. The Department should urgently implement and monitor measures to improve enforcement.

» The new European Small Claims Procedure could be of real benefit in cross border cases, but the Committee was concerned that some of the same issues might apply there: the claiming of disproportionate legal costs and unrealistically low limits could undermine its value.

» A clear distinction must be maintained so that the European Procedure would not apply to cases based solely in England and Wales, where the existing system offers a lower cost risk and has been shown to work relatively well.

» The county courts are still operating on a paper system without the basic level of IT needed. The Department must place greater priority on providing adequate IT facilities which would be much more efficient and provide for a better service to the public.

Rt Hon Alan Beith MP, Chairman of the Committee, said:

The small claims system is an absolutely essential part of giving ordinary people, who can't necessarily risk getting involved in a case with huge legal fees, access to justice and a means of redress in this country. That is why it is all the more important that the county courts have the proper facilities they need, and that when someone does get a successful judgement, the means are there to ensure it gets enforced, both for the claimant's benefit and for the credibility of the system.

The report is released on the same day as the Committee hears from the Lord Chief Justice on the issue of conditional legal fees and the Compensation Culture and NHS Redress Bills.


Notes:
1. The report is available on the Committee's website: www.parliament.uk/conaffcom
 
2. Committee Membership is as follows: Rt Hon Alan Beith MP (Chairman), James Brokenshire MP, David Howarth MP, Barbara Keeley MP, Mr Piara S Khabra MP, Jessica Morden MP, Julie Morgan MP, Mr Andrew Tyrie MP, Keith Vaz MP, Dr Alan Whitehead MP, Jeremy Wright MP