Archive for the ‘Chapter 8’ Category
Regulation of Claims Management Companies: The Financial Guidance and Claims Bill 2017
In March 2016, the Government announced that it planned to change the ways in which the regulation of Claims Management Companies is organised.
At present, this work is undertaken by a special unit within the Ministry of Justice. What is planned is that this work should be transferred to the Fincancial Conduct Authority – which has broad regulatory oversight of the financial services sector.
In the Financial Guidance and Claims Bill, which was published in June 2017, legislative proposals have been set out which – when the Bill is enacted – will achieve this objective. Clauses in the Bill will make amendments to the Financial Services and Market Act 2000 to enable the Financial Conduct Authority to regulate claims management company activity as a ‘regulated activity’ under the Act.
In addition, clauses in the Bill provide for the transfer of complaints-handling responsibility from the Legal Ombudsman to the Financial Ombudsman Service. This will allow the Financial Ombudsman Service to take over jurisdiction to investigate and determine consumer complaints about the service provided by the claims management companies.
The Financial Conduct Authority will also be given power to impose a cap on the fees that claims management companies can charge for their services.
These seem to me sensible reforms which should offer better protection to consumers who use Claims Management Companies and to protect companies against malpractice by those companies.
The Bill has started its progress through Parliament. I anticipated the measures will be enacted sometime in 2018, with implementation shortly thereafter.
The Bill can be viewed at https://publications.parliament.uk/pa/bills/lbill/2017-2019/0001/18001en03.htm
Recent annual reports on the work of the Claims Management Regulator can be found at https://www.gov.uk/government/collections/claims-management-regulator-annual-reports
Business and Property Courts
The creation of the Business and Property Courts was noted here in April. From 4 July 2017 a series of events is being held in court centres around the country to launch the new Courts. The Courts will become operational from 2 October 2017.
The existing courts being brought together under the single umbrella are:
- The Admiralty Court.
- The Business List
- The Commercial Court (covering all its existing subject areas of banking and finance, shipping and insurance, trade and energy, and international arbitration, as well as the Circuit Commercial Courts, formerly Mercantile Courts.)
- The Competition List.
- The Financial List (covering banking and financial markets).
- The Insolvency and Companies Court.
- The Intellectual Property List (Including the Patents Court and the Intellectual Property and Enterprise Court, the “IPEC”).
- The Property Trust and Probate List.
- The Revenue List.
- The Technology and Construction Court (covering all its traditional areas of major technology and construction cases).
For further details see https://www.judiciary.gov.uk/announcements/launch-of-business-and-property-courts/
Prisons and Courts Bill 2017: new version awaited
One of the casualties of the calling of the General Election in June 2017 was that the Prison and Courts Bill 2017 was lost – i.e. failed to complete its Parliamentary process.
I have noted in earlier blogs the key features of this important legislation, both in relation to the reform of the Prison Service and to the Civil Justice system. It also planned to deal with rules relating to whiplash injuries (see entries in Spotlight on the Justice System 8 March 2017.)
It is clear from announcements in the Queen’s speech – delivered in June 2017 – that the Bill will be introduced, not necessarily in the same form but with the same policy objectives in mind.
For the moment, therefore, plans are on hold (though civil servants are actively working on the assumption that eventually they will get the new legal powers they need to introduce the proposed reforms.)
I will give further details when the new Bill is published.
Changing the small claims track
In November 2015, the Government announced that it planned to increase the small claims limit for personal injuries to £5000. Following a consultation on making reforms to soft tissue injury claims (often referred to as whiplash injury) the Government has now (March 2017) decided that while Road Traffic Accident claims for less than £5000 should stay in the small claims track, the small claims limit for other personal injury claims should become £2000. It plans that these new limits should be in effect by October 2018.
The Government is also intending to ban the settlement of whiplash claims unless medical evidence is provided of the alleged injury.
For details see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/593431/part-1-response-to-reforming-soft-tissue-injury-claims.pdf
What’s in a name? ‘Business and Property Courts’
From June 2017, ‘The Business and Property Courts’ will be the new name for England and Wales’ international dispute resolution jurisdictions and will act as a single umbrella for business specialist courts across England and Wales.
This is rather more than a simple re-branding. The main objective of the new arrangements is that it will enable appropriately qualified judges to be deployed more flexibly so that their expertise can be used in whatever forum it is needed.
Business and Property Courts brings under a single umbrella the following existing courts and lists:
- The Commercial Court (covering all its existing subject areas of shipping, sale of goods, insurance and reinsurance etc.)
- The Admiralty Court.
- The Mercantile Court.
- The Technology and Construction Court (covering all its traditional areas of major technology and construction cases).
- The Financial List (covering banking and financial markets).
- The Companies and Insolvency Court.
- The Patents Court.
- The Intellectual Property and Enterprise Court (the “IPEC”).
- The Competition List.
Other courts and lists will be added in future to include the existing business and property cases in the Chancery Division.
There will also be Business and Property Courts in Birmingham, Manchester, Leeds, Bristol and in Cardiff, with expansions to Newcastle and Liverpool likely in the future.
Although the framework will be new, existing practices and procedures will be retained, at least for the time being.
The details are in https://www.judiciary.gov.uk/announcements/business-and-property-courts-media-release/
Compensation culture: cutting down ‘whiplash’ claims
Those who argue that a compensation culture has developed in our society – with too many people willing to seek compensation for things that have happened to them – often point to the numbers of claims made for soft tissue injuries occurring in road traffic accidents (RTAs), commonly referred to as ‘whiplash claims’
In 2015, the Government announced that it wanted to reduce the incentives on people bringing whiplash claims. It has now published a consultation paper setting out its ideas in more detail.
The package includes measures to tackle the high numbers of minor RTA related soft tissue injury claims by either:
Measures (a), (b) and (d) will require primary legislation and the government intends to legislate as soon as parliamentary time allows.Measure (c) requires changes to the Civil Procedure Rules (CPR). There will also need to be amendments to relevant Pre-Action Protocols including the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents.
It is argued that these changes could reduce the cost of insurance claims by around £1bn annually.
The Consultation will provoke strong views, and are likely to be fiercely resisted, particularly by those who represent claimants. If implemented, the reforms could also have significant impact on Claims Management Companies.
The outcome of the consultation is not yet clear, nor, importantly is it clear when time for the required legislation could be found. But it is an issue that is unlikely to go away, even if implementation is still some time off.
The Consultation can be found at https://consult.justice.gov.uk/digital-communications/reforming-soft-tissue-injury-claims/
Transforming the English Legal System: Civil Justice
i. Introducing a new online process for resolving claims: In line with plans across all jurisdictions, we will move more cases away from physical court rooms. Building on Lord Justice Briggs’ proposals in his Civil Court Structures Review we will create a new process to resolve many disputes entirely online, using innovative technology and specialist case officers to progress routine cases through the system and reserving judicial time for the most complex cases. We will create a new, streamlined Rules Committee to design this new system and keep the processes simple. When hearings are required, they may be held over thetelephone or video conference, focusing court resources on the most complex and difficult cases. This will mean that cases should reach a quicker resolution.
ii. Encouraging parties to resolve disputes themselves where possible: We willincrease signposting to mediation and alternative dispute resolution services tohelp people avoid court for minor disputes that would be better handled privately,without needing the court to intervene.iii. Extending the fixed recoverable costs regime: Fixed recoverable costs are legalcosts which can be recovered from the losing side by the successful party to aclaim, at a prescribed rate. (For civil claims, these are set out in the CivilProcedure Rules). We will build on measures introduced in the last Parliament forlow value personal injury claims, to limit the level of legal costs recoverable.These measures provide transparency and certainty for all parties and aredesigned to ensure that the amount of legal work done is proportionate to thevalue of the claim. We are keen to extend the fixed recoverable costs regime toas many civil cases as possible. The senior judiciary will be developing proposalson which we will then consult.iv. Civil enforcement: We will give the [county court] powers to issue attachment ofearnings orders to the High Court to create a simpler, more consistent approachto enforcement, and make sure more people can get the money they are owed.We will also commence the fixed deductions scheme (fixed table) provisions inthe Tribunals, Courts and Enforcement Act 2007 in the County Court andintroduce fixed tables in the High Court, providing transparency and certainty ofthe rate of deductions from debtors’ earnings to pay back their creditors.v. Replacing statutory declarations in county court proceedings with a witnessstatement verified by a statement of truth: We will replace outdated and currentlyinconsistent procedures, which are inconvenient for people to use and resourceintensive to administer, with a more modern digital approach but keeping strongpenalties where a statement of truth is found to be false.
See chapter 3 in https://consult.justice.gov.uk/digital-communications/transforming-our-courts-and-tribunals/supporting_documents/consultationpaper.pdf
Transforming the English Legal System
September 2016 saw the publication of an extremely important Consultation Paper, which sets out ideas on how the courts and tribunals system in England and Wales should be reformed.
Its proposals are based on three principles, that the reformed system should be proportionate, accessible and just.
The Paper states:
To deliver a system that is proportionate and tailored for the complexity andseriousness of individual cases, [the Government is] taking a consistent approach across jurisdictions [i.e., criminal, administrative, family and civil], including:i. More use of case officers for routine tasks: Judges spend too much of their timedealing with uncontroversial, routine or straightforward matters which could just aseffectively be dealt with by court staff under judicial authorisation. Where it isappropriate, specially trained staff will be able to carry out some of this work tohelp justice move faster.ii. More decisions made “on the papers”: Where a case is relatively straightforward orroutine, representations will be made online in writing for a judge to consideroutside of a traditional court room, without the need for a physical hearing,meaning a more convenient experience for everyone involved.iii. More virtual hearings: Where a judge needs to listen to the parties make theirarguments, it will be possible in many cases to hold the hearings over telephone orvideo conference, without the need for the parties to travel to a court building.There will still be an important place for physical court hearings for criminal trialsand other serious or complex cases, but where they are appropriate, virtualhearings offer an easy and convenient alternative for everybody.iv. More cases resolved out of court: In appropriate cases, we will encourage partiesto settle their disputes themselves, without the intervention of the courts.
i. Putting probate applications online: Dealing with probate affairs can be difficult andcomplicated at a time when people are often coping with bereavement. We aredigitising the probate system to allow the entire process to be managed online,from application to resolution, making it an easier and faster process when casesare uncontested.ii. Managing divorce online: Work has already begun to allow divorce applications tobe made and managed online, removing some of the bureaucracy from oftenstressful and lengthy proceedings and simplifying cumbersome administrativeprocesses.iii. Digitising applications for Lasting Powers of Attorney: Allowing people to makearrangements for a time in the future when they may not be able to makedecisions by themselves is a helpful but often emotionally stressful process.Applications have been partially digitised since 2014, resulting in fewer applicationforms being returned because of errors. We will build on this by making the systemfully digital to deliver a quicker service.
i. Provide a system that works for everyone: Digital and online processes are easyand efficient for many people, but the justice system must also work for peoplewho do not or cannot access services online. We must provide an alternative routeof access for every service that moves online. ..ii. Continue to ensure open justice: It is a core principle of our justice system thatjustice is open. “It is not merely of some importance, but of fundamentalimportance that justice should not only be done, but should be manifestly andundoubtedly seen to be done,” as Lord Chief Justice Hewart said in 1924. Theprinciple of open justice will be upheld and the public will still be able to see andhear real-time hearings, whilst we continue to protect the privacy of the vulnerable.
Review of the structure of the civil courts
The review of the structure of the civil courts, undertaken at great speed and efficiency by Lord Justice Briggs, was published on 27 July 2016.
Although commissioned by the Lord Chief Justice and the Master of the Rolls rather than by Government Ministers, there are strong reasons to believe that its recommendations will be taken forward by Government. The one uncertainty is how far the new Lord Chancellor and Secretary of Justice, Lynne Truss MP, will focus on an initiative originally supported by her predecessor, Michael Gove MP.
The recommendation that has grabbed most public attention so far relates to the recommendation for The Online Court.
This would be a new court, designed to be used by people with minimum assistance from lawyers, with its own set of user-friendly rules. It is anticipated that it will eventually become the compulsory forum for resolving cases within its jurisdiction. It should start by dealing with straightforward money claims valued at up to £25,000.
The review makes recommendations about how to help people who need assistance with online systems.
It is also provided that complex and important cases, even of low monetary value, should be able to be transferred upwards to higher courts.
Briggs also recommends important changes to who should be undertaking the work of the courts. Judicial resources should be made more readily available by the creation of Case Officers.
These would be a senior body of court lawyers and other officials who can assist with certain functions currently carried out by judges, such as paperwork and uncontentious matters. They would be trained and supervised by judges. Their decisions would be subject to reconsideration by judges on request by a party. They would operate independently of government when exercising their functions.
Thirdly Briggs deals with the thorny problem of the Enforcement of Judgments and Orders.
He recommends that there should be a single court as the default court for the enforcement of the judgments and orders of all the civil courts (including the new Online Court). This should be the County Court, but there would need to be a permeable membrane allowing appropriate enforcement issues to be transferred to the High Court, and special provision for the enforcement of arbitration awards, in accordance with current practice and procedure.
He wants to see all enforcement procedures being digitised, centralised and rationalised.
Fourth, Briggs is keen to promote Mediation/ADR.
This has been on the agenda for years. In this context he recommends the re-establishment of a court-based out of hours private mediation service in County Court hearing centres prepared to participate, along the lines of the service which existed prior to the establishment and then termination of the National Mediation Helpline. My view is that all county court hearing centres should be required to offer this; but Briggs clearly felt this was a step too far at this stage.
Future issues
Briggs also sets out a number of proposals for further restructuring of the civil courts. These include:
- a review of High Court divisions;
- a single portal for the issue of all civil proceedings, leading to the eventual abolition of District Registries;
- a review of whether procedural changes in the Court of Appeal should be applied to appeals to the High Court and to Circuit Judges in the County Court;
- the possible convergence of Employment tribunals and the Employment Appeal tribunal with the county court;
- he would like to see the Family Court being given a shared jurisdiction (with the Chancery Division and the County Court) for dealing with Inheritance Act disputes and disputes about the co-ownership of homes.
Announcements about the Government’s response to these recommendations and how they fit into the current programme of reform of the court estate will be noted here in due course.
Detail about the Briggs review can be found at https://www.judiciary.gov.uk/civil-courts-structure-review/civil-courts-structure-review-ccsr-final-report-published/civil-courts-structure-review-final-report-press-notice/
What is a court? Proposals for a modern approach to the courts and tribunals estate.
The programme for restructuring how all the buildings currently used by courts and tribunals – to ensure better and more effective usage – is gathering pace. A significant contribution to how detailed policy may develop was made this month by the legal think-tank, JUSTICE. A recent working party report (in which I participated) recommends:
- The reconception of court and tribunal rooms as ‘justice spaces’. This new model is defined by its inherent flexibility and rejection of the over-standardisation prevalent in existing courts and tribunals. Justice spaces are designed to adapt to the particular dispute resolution process taking place within them, and the needs of users, rather than the other way around.
- A flexible and responsive court and tribunal estate, made up of a number of dynamic parts. The Working Party suggests a portfolio of Flagship Justice Centres; Local Justice Centres; ‘Pop-up courts’; remote access justice facilities; and digital justice spaces.
The Working Party emphasises the importance of technology, and its potential to meet user needs and maximise access to justice. All of the Working Party’s proposals are anchored in a commitment to a core set of principled considerations to ensure fairness of process and access to justice. Finally, the report makes practical recommendations aimed at ensuring the effective implementation of the HMCTS Reform Programme.
The full report (and accompanying Press Release) can be accessed at http://justice.org.uk/what-is-a-court/
Martin Partington: Introduction to the English Legal System 15th ed 2021
Oxford University Press Learning Link Resources
Martin Partington: Spotlight on the Justice System 