Over recent years, a succession of Lord Chancellors and Ministers of Justice have been keen to emphasise their commitment to protecting judges and upholding the rule of law. Such commitments are not without meaning and while the rule of law is a phrase often said, it is rarely examined. It is not an arid legal doctrine but is the foundation stone of much that creates a fair and just society.
It may be thought that the rule of law is of no relevance to a foreword about a book giving practical guidance to claims within the small claims track in the County Court. On the contrary, the rule of law is front and centre. It is because people with a dispute, however low in value and lacking complexity, can bring a claim before an impartial judge, that we can function as a civilised society where business can be done and wrongs remedied. The small claims procedure is a very real example of the rule of law in operation.
The District Bench across England and Wales is under pressure as it has never been before, with both the volume and variety of work that judges are obliged to hear. Added to that, judges generally, and the District Bench in particular, has to be able to reach both legal and factual decisions often without the benefit of the parties having legal representation. In order to fulfil their role properly and in order to continue with their duties to uphold the rule of law, without fear or favour, both full-time and deputy District Judges need to be able to manage heavy lists of both civil and family cases. A sizeable part of the daily diet of the District Bench will be civil claims which are allocated to the small claims track.
As Dominic Bright sets out, small claims account for approximately 60% of all allocations of civil work in the County Court and three-quarters of all civil claims disposed of by way of final hearing. The financial value of a small claim is now £10,000 or less and the track is designed to provide a proportionate procedure by which the most straightforward of these relatively low value claims can be decided without substantial pre-hearing preparation and without the formalities of a traditional trial. Of course, most people with a claim worth £10,000 or less are unlikely to consider the sums involved to be “small” and the title given to this track must not be seen to belittle the importance of the dispute to the parties involved. What is important is that the track provides a proportionate means of resolving a dispute between parties which can be of considerable practical importance and, despite the categorisation of small, considerable financial worth to the individuals involved.
In this comprehensive guide to the small claims track, Dominic Bright has set out all that a practitioner could possibly need to know about how to deal with a small claim, from allocation to judgment and through to any potential appeal. He covers the court’s duty to manage cases actively and the overriding objective and, in doing so, points out the duty of the court to take into account the fact that a litigant is without representation when exercising powers of case management albeit that all rules, practice directions and orders apply equally to represented and unrepresented litigants. It is, of course, incumbent upon a practitioner, as well as the court, to act in furtherance of the overriding objective. An unrepresented litigant is not only entitled to a fair hearing, he is entitled to understand that he is obtaining that fair hearing.
Further to the specifics of how the court will deal with a small claim, including the pleadings, the allocation and the hearing itself, Dominic Bright has included guidance on a wide range of matters, such as ethics and ways to behave when in court, which will be of assistance to any junior practitioner appearing in a civil case at an early stage of their career. The inclusion of the civil procedure rules and practice directions relating to the small claims track, and also to pre-action conduct and protocols and to the overriding objective and the court’s duty to manage cases, means that this guide provides a useful toolkit of relevant rules and practice directions.
This Practical Guide to the Small Claims Track will be of benefit to practitioners, particularly those new to practice. It will therefore be of benefit to the District Judges and their deputies who hear small claims. Undoubtedly, the better informed and prepared the representatives are, the better it is for the judges who hear such claims to enable them to concentrate on reaching the correct legal and factual conclusions in furtherance of upholding the rule of law.
HHJ Karen Walden-Smith
Senior Circuit Judge
Designated Civil Judge for the County Court in East Anglia November 2019
This chapter provides an overview of the special procedure for dealing with claims that have been allocated to the small claims track (see appendices C and D). Specific reference is made only to those that are of fundamental importance. The remaining chapters go further, providing guidance as to when to rely upon specific rules, and when to deploy authority interpreting them.
a. Small claim
The rules of civil litigation in England and Wales are prescribed in the Civil Procedure Rules (“CPR”). Part 27 of the CPR is entitled: ‘The small claims track’. A ‘small claim’ is a claim that falls under this Part which (CPR 27.1(1)): 1) sets out the procedure for dealing with small claims; and 2) limits the amount of costs that can be recovered.
The special procedure for dealing with claims that have been allocated to the small claims track ‘is intended to provide a proportionate procedure by which most straightforward claims with a financial value of not more than £10,000 can be decided, without the need for substantial pre-hearing preparation and the formalities of a traditional trial, and without incurring large legal costs’ (Practice Direction (“PD”) 26 at [8.1(1)(a)]).
There are at least three reasons why it is, perhaps, regrettable that claims that have been allocated to the small claims track are referred to as “small claims”.
First, they make up about three quarters of all civil claims disposed of by way of final hearing. Secondly, many would not accept that £10,000 is a “small” sum. Thirdly, the claimant bringing the claim, and the defendant defending against it, are both likely to disagree that the importance of their dispute is “small”.
In April to June 2019, 25,000 cases were allocated to the small claims track. This is just shy of 60 percent of all allocations (to any track). Of the claims that went to trial, about three quarters were allocated to the small claims track – a two percent increase when compared to the same quarter in the previous year. The average time that a claim allocated to the small claims track takes to go to a final hearing is about 37 weeks (Ministry of Justice, Civil Justice Statistics Quarterly, England and Wales, April to June 2019 (provisional), 5 September 2019).
The small claims track is the ‘normal track’ for three types of claim (CPRs 26.6 and 27.1(2)).
First, any claim which has a value of not more than £10,000. In practice, this type of claim forms the overwhelming majority of claims that are allocated to the small claims track.
Secondly, a ‘claim for personal injuries’ where: 1) the value of the claim is not more than £10,000; and 2) the value of any claim for ‘damages for personal injuries’ is not more than £1,000. A ‘claim for personal injuries’ is one in which ‘there is a claim for damages in respect of personal injuries to the claimant or any other person or in respect of a person’s death’. ‘Damages in respect of personal injuries’ means ‘damages claimed as compensation for pain, suffering and loss of amenity and does not include any other damages which are claimed’.
Thirdly, any claim which includes a claim by a tenant of residential premises against a landlord where: 1) the tenant is seeking an order requiring the landlord to carry out repairs, or other work to the premises; and 2) the cost of the repairs, or other work, to the premises is estimated to be not more than £1,000. If a tenant of residential premises is claiming a remedy in respect of harassment, or unlawful eviction, it will not be allocated to the small claims track.
d. Civil Procedure Rules
CPRs and PDs apply to small claims, except to the extent that the CPRs and PDs provide otherwise. CPRs relating to the following do not apply (CPR 27.2):
interim remedies (except as it relates to interim injunctions);
disclosure and inspection;
evidence (except the power of the court to control evidence);
miscellaneous rules about evidence;
experts and assessors (except the duty to restrict expert evidence; experts’ overriding duty to the court; the court’s power to direct that evidence is to be given by a single joint expert; and instructions to a single joint expert);
further information (although the court may, on the court’s own motion, order a party to provide further information if the court considers that it is appropriate);
Part 36 offers to settle; and
hearings (except the general rule that hearings are public; and regarding communications with the court).
e. Final remedy
The court may grant any final remedy in relation to a small claim which it could grant if the proceedings were allocated to the fast track, or to the multi-track (CPR 27.3).
After allocation, the court will do one of the following (CPR 27.4).
First, give standard directions, and fix a date for the final hearing. Secondly, give special directions, and fix a date for the final hearing, or direct that the court consider what further directions are to be given, no later than 28 days after the date that special directions were given.
Thirdly, fix a date for a preliminary hearing. Fourthly, give notice that the court proposes to deal with the claim without a hearing, inviting the parties to notify the court by a specified date if they agree.
‘Standard directions’ means: 1) ‘a direction that each party shall, at least 14 days before the date fixed for the final hearing, file and serve on every other party copies of all documents (including any expert’s report) on which she intends to rely at the hearing’; and 2) any other standard directions prescribed in PD 27.
‘Special directions’ means ‘directions given in addition to or instead of the standard directions.’
The general rule is that the court will give the parties at least 21 days’ notice of the date fixed for the final hearing. The exception is where the parties agree to accept less notice. In any event, the court must inform the parties of the amount of time allowed for the final hearing.
No expert evidence may be given at a hearing without the court’s permission (CPR 27.5).
h. Preliminary hearing
A preliminary hearing may only be held in three circumstances (CPR 27.6).
First, special directions are needed to ensure a fair hearing, and it appears to the court that it is necessary for a party to attend at court to ensure that she understands what she must do to comply with the special directions. Secondly, to be able to dispose of the claim, on the basis that one of the parties has no real prospect of success at a final hearing. Thirdly, to enable the court to strike out a statement of case, or part thereof, on the basis that it discloses no reasonable grounds for bringing, or of defending the claim.
When deciding whether or not to hold a preliminary hearing, the court must have regard to the desirability of limiting the expense of the parties that will be incurred in them having to attend court. The parties must be given at least 14 days’ notice of the date of such a hearing.
If all the parties agree, the court may treat the preliminary hearing as a final hearing.
At, or after a preliminary hearing, the court will do three things.
First, fix the date of the final hearing (if the court has not so fixed already), and give the parties at least 21 days’ notice of the same, unless the parties agree to accept less notice. Secondly, inform the parties of the amount of time allowed for the final hearing. Thirdly, give appropriate directions.
i. Additional or amended directions
The court may add to, vary, or revoke, directions (CPR 27.7).
j. Final hearing
There are six main rules for the final hearing (CPR 27.8).
First, the court may adopt any method of proceeding that it considers to be fair. Secondly, hearings will be informal. Thirdly, the strict rules of evidence do not apply. Fourthly, evidence need not be on oath. Fifthly, the court may limit cross-examination. Sixthly, the court must give reasons for its decision.
If a party who does not attend the final hearing satisfies the following three criteria, the court will take into account that party’s statement of case, and any other documents that she has filed when the claim is decided (CPR 27.9).
First, at least seven days before the hearing, written notice (“notice”) that she will not attend has been filed with the court and served on the other party. Secondly, at least seven days before the hearing, she has served any other documents on the other party which she has filed with the court. Thirdly, in her written notice, she has requested that the court decide the claim in her absence, and she has confirmed her compliance with the first and second criteria.
Otherwise, the court may strike out the claim (CPR 27.9(2)).
The court may decide the claim solely on the evidence of the claimant if two conditions are satisfied (CPR 27.9(3)). First, a defendant does not attend the hearing, or give notice. Secondly, the claimant does not attend the hearing, or gives notice that she will not attend.
The court may strike out a claim, defence, and counterclaim if neither party attends, nor gives notice (CPR 27.9(4)).
l. Disposal without a hearing
If all parties agree, the court may deal with a claim without a hearing (CPR 27.10).
m. Set aside & re-hearing
Where three conditions are met, a party may apply for an order that judgment is set aside, and that the claim is re-heard (CPR 27.11).
First, she was neither present, nor represented, at the hearing of the claim. Secondly, she has not given notice to the court, in accordance with the rule for non-attendance at the final hearing (see above). Thirdly, the application must be made not more than 14 days after the day on which notice of the judgment was served on her.
Where these conditions are satisfied, a court may grant an application, but only if the applicant satisfies a further two conditions. First, she had a good reason for not attending, or being represented at the hearing, or giving notice to the court, in accordance with the rule for non-attendance at a final hearing. Secondly, she has a reasonable prospect of success.
If a judgment is set aside, the court must fix a new date for the hearing of the claim. The hearing may take place immediately after the set aside application. It may also be heard by the judge who granted the application.
An application to set aside cannot succeed where the claim was disposed of without a hearing.
There are three overarching rules governing costs of a claim that is allocated to the small claims track. First, pre-allocation. Secondly, after allocation. Thirdly, re-allocation.
CPRs 46.11 and 46.13 prescribe the rules for costs before a claim has been allocated to the small claims track (CPR 27.14(1)). In general, once a claim is allocated to the small claims track, the rules that apply to costs on the small claims track apply to the period before the claim was allocated to the small claims track, as well as after (CPR 46.11). The exception is where the court, or a practice direction, provides otherwise.
Any cost orders made before a claim is allocated to the small claims track will not be affected by allocation. In general, where a claim is allocated to the small claims track, and the court subsequently re-allocates the claim to a different track, any special rules about costs applying: 1) to the first track, apply up to the date of reallocation; and 2) to the second track, apply from the date of reallocation. The exception is where the court orders otherwise (CPR 46.13(2)).
Where a case settles before allocation, for example, and assessment of costs is on the standard basis, the court may restrict costs to those that would have been allowed on the small claims track, if the claim would in fact have been so allocated (CPR 46.13(3)).
ii. After allocation
The only sum that one party (“A”) can be ordered to pay to another party (“B”), in respect of B’s costs, fees, and expenses, including those relating to an appeal (CPR 27.14 and PD 27 at [7.3]) are:
fixed costs, attributable to issuing the claim, which
are payable under the rule prescribing fixed costs (CPR 45) or,
would be payable under CPR 45 if it applied to the claim;
in proceedings which included a claim for an injunction, or an order for specific performance of a sum not exceeding the amount specified in PD 27 for legal advice, and assistance relating to that claim;
any court fees paid by that other party;
expenses which a party, or witness has reasonably incurred in travelling to, and from, a hearing, or staying away from home for the purpose of attending a hearing;
a sum not exceeding £95 for any loss of earnings, or loss of leave by a party, or witness, due to attending a hearing, or staying away from home for the purpose of attending a hearing;
a sum not exceeding £750 for an expert’s fees;
such further costs as the court may assess by the summary procedure, and order to be paid by a party who has ‘behaved unreasonably’;
Stage 1, and, where relevant, Stage 2 fixed costs, under CPR 45.18, where
the claim was within the scope of the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents, or the Pre-Action Protocol for Low Value Personal Injury (Employers’ Liability and Public Liability) Claims,
the claimant reasonably believed that the claim was valued at more than the small claims track limit, in accordance with the relevant protocol, and
the defendant did not pay those Stage 1, and, where relevant, Stage 2 fixed costs; and
in an appeal, the cost of any approved transcript that was reasonably incurred.
‘Behaved unreasonably’ does not necessarily include a party who has rejected an offer in settlement, but the court may take this into consideration.
The limits on costs also apply to any fee, or reward, charged by a person exercising rights of audience as a lay representative for acting on behalf of a party to proceedings.
Where a claim is allocated to the small claims track, and subsequently re-allocated to another track, the rule prescribing costs on the small claims track will cease to apply after the claim has been re-allocated (CPR 27.15). Fast track or multi-track costs will apply from the date of re-allocation.