Small Claims Paper Determination Pilot comes into effect

The Small Claims Paper Determination Pilot (Pilot) enables the court to direct that the outcome of certain small claims disputes should be decided on paper without a hearing and does not require the agreement of all parties. The Pilot will run until 1 June 2024 (unless further extended) and is being trialled at the County Courts at Bedford, Luton, Guildford, Staines, Cardiff and Manchester in respect of claims issued after 1 June 2022. It does not apply to proceedings commenced prior to that date or personal injury claims and housing disrepair claims allocated to the small claims track. 

The Ministry of Justice introduced the Pilot on the premise that a determination without a hearing would be a proportionate and efficient means of determining a small claims dispute in cases where it is not necessary to hear the parties’ oral evidence or oral advocacy to determine the issues justly and is hoped will speed up the process. The Directions Questionnaire applicable to small claims matters, Form N180, has been amended to include a section requiring each party to indicate whether they consider the claim is suitable for determination without a hearing and if not, why not.

The Practice Direction to the Pilot provides three examples of small claims disputes that may be suitable for determination without a hearing. These include:

• a claim for compensation for flight delay or denial of boarding;
• a claim arising out of the issuance of a parking ticket on private land; and
• 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.

Following a review of the parties’ Directions Questionnaires, the court may direct that a small claim which falls within the Pilot should be determined without a hearing if all parties agree, or if having considered the completed Directions Questionnaires, the court considers it is suitable for determination without a hearing ie the court has power to impose a paper hearing regardless of the parties wishes.

The court must provide the parties with at least 21 days’ notice of the date of the determination of a small claim without a hearing. Upon receiving such notice, a party may file at the court short written submissions objecting to the direction not less than 7 days before the date of determination, which will be put before the judge at the time listed for the paper determination. The judge will then consider the suitability of the small claim for paper determination afresh and may either continue with the paper determination or direct that it be listed for a contested final hearing instead. 

If the court determines a small claim dispute is suitable without a hearing under the Pilot, the judge will prepare a note of reasons (which shall include reasons for determining that it is suitable for determination without a hearing, if a party has objected) and a copy will be served on each party. Any party who is dissatisfied with a determination without a hearing under the Pilot will not be able to apply to set aside the judgment but may seek permission to appeal. In considering such appeal, the court will consider the summary nature of the note of reasons produced following a determination without a hearing.

It appears that the true intention for the introduction of the Pilot by the Ministry of Justice is to reduce the significant delays currently experienced at the County Courts in relation to final hearings. These delays have become prolonged due to the impact of the Covid-19 pandemic over the past two years and created a significant administrative backlog in the County Courts across the country. Questions remain whether the Pilot will restrict access to justice for litigants in person and their right to have a fair trial against large corporations with the benefit of legal representation. It should also be noted that the Ministry of Justice is also actively considering which type of case should be applicable for mandatory mediation, starting with small claims and some private family cases, which may further restrict a parties’ opportunity to have ‘their day in court’ and their refusal to engage may be deemed unreasonable behaviour with potential costs consequences. The overall direction of travel seems to be away from final hearings in person either through mandatory mediation or via on paper determinations and whilst the value of the affected cases is small, if the system proves effective there is scope for it being extended to higher value cases.

For further information on this topic, please contact John Quicler.

This article has also been published on TRF news.