What changes have recently been made to the jurisdiction of the county courts?
The county courts were established in 1846 as local courts for the collection and enforcement of small debts and for other small claims in contract and tort. The jurisdiction of these courts was limited financially (to a maximum of £100) and also geographically (to particular localities). The name “county court” was misleading — the jurisdictional boundaries of these courts have never been the same as county boundaries. After the county courts were established Parliament found it increasingly convenient to add certain specialist subjects to their jurisdiction — most notably: landlord and tenant disputes, hire-purchase contracts, adoption and undefended divorces. Thus, it became true to say that county courts had a “general jurisdiction” in contract and tort (subject to a financial limit) and a “special jurisdiction” (defined in other ways).
The general jurisdiction of the county courts was increased financially until, immediately before the passing of the Courts and Legal Services Act 1990, these courts could hear cases in contract and tort where the claim in question did not exceed £5,000. There was also a “small claims arbitration procedure” for claims not exceeding £500 in value. This procedure became less formal than litigation in the ordinary sense of that word. Strict rules of evidence were dispensed with and parties were encouraged to attend in person without lawyers. No legal costs would be awarded to a successful party, beyond the modest expenses of witnesses and so on. This procedure became so popular with consumers that in 1988 the Consumer Arbitrations Agreement Act was passed to prevent manufacturers, tour operators, and similar suppliers of goods and services from imposing their own (more expensive) arbitration agreements on their customers.
Part I of the Courts and Legal Services Act 1990 recognises that the financial value of a claim is not necessarily a good guide to its complexity. A building contract involving £5,000 (or less) may be far more complicated, legally and factually, than a dispute about a £20,000 debt with a West End department store or a credit card company. Accordingly, with effect from July 1 1991, the existing financial limits on the general jurisdiction of the county courts are to be lifted. Instead, the distribution of business between the county courts and the High Court will depend on such criteria as:
(1) the financial value of the case;
(2) the nature of the proceedings;
(3) the parties to the proceedings;
(4) the degree of complexity;
(5) the importance of any question involved in the case (eg whether an important point of law is involved).
So far as the financial value of the case is concerned, section 1 of the 1990 Act empowers the Lord Chancellor to promulgate certain figures by means of a statutory instrument. The Lord Chancellor has therefore made the High Court and County Courts Jurisdiction Order 1991 (SI 1991, No 724(L5)). This is the statutory instrument which comes into force on July 1 1991. The general rule contained in this statutory instrument is reproduced in the box below.
It should be noted that the financial limits mentioned in the statutory instrument are presumptions. They are not ceilings or base-lines. A case may be allocated contrary to one of the above presumptions if other factors make it appropriate to do so. For example, a case might involve a very small sum of money, but nevertheless involve an important point of statutory interpretation. Similarly, it might raise important questions about the proper interpretation of an insurance policy, or a standard form of contract, or some other document in wide commercial use. Such cases will obviously be suitable for consideration by a High Court judge.
A similar situation might arise with regard to the common law, where the parties are engaged in litigating a “test case,” even though the amount of money involved is less than £25,000. For example, in Sim v Rotherham Metropolitan Borough Council [6] 3 All ER 387 the High Court heard an action brought by some school teachers for the recovery of trifling sums of money deducted from their monthly salaries. Nevertheless, the case was considered suitable for a High Court hearing because the point at issue involved the precise nature of a school teacher’s duties (in particular, whether there was an implied contractual duty to cover for an absent colleague). The case was brought with the financial backing of a trade union, and the result was eagerly awaited by local education authorities throughout England and Wales. (The school teachers lost the case.) It is quite clear that such a test case would still be suitable for a hearing in the High Court, irrespective of the sums involved.
Another change which comes into effect on July 1 1991 is the increase in the financial jurisdiction of the “small claims arbitration procedure”. This will be increased to cover claims not exceeding £1,000 in value. Naturally, this informal procedure can still be used for claims of a higher value if both parties agree. (Such agreement is rare.) The advantages of this procedure remain the same, namely no insistence on formal pleadings, no adherence to strict rules of evidence and no liability for professional legal costs incurred by the other party, even if the claim (or defence) fails.
Section 6 of the Courts and Legal Services Act 1990 goes further. It permits the Lord Chancellor and the County Court Rules Committee to make new rules permitting the arbitrator to adopt an inquisitorial role in questioning witnesses. This is to secure fairness in cases where one party may be legally represented (eg a company) but the other party might not be (eg a consumer).
Some changes have not been made by the 1990 Act or the 1991 statutory instrument. There is no change to the geographical jurisdiction of the county courts. Proceedings must still be brought in the county court for the area where the defendant resides (or carries on business) or, alternatively, for the area where the cause of action arose. In the case of a building contract, therefore, the plaintiff may sue in the county court where the defendant carries on business (or resides), or in the county court which covers the area where the contract was made or the building work was carried out. It is not possible for the plaintiff to choose the county court which covers the area where he resides (or carries on business) unless, perchance, it happens to be the same as one of the courts permissible on other grounds. More to the point, the plaintiff cannot choose another court simply because it is more efficient than the one he would otherwise be forced to use.
Some county courts have a lamentable reputation among solicitors for inefficiency and administrative neglect. For this reason the profession has generally welcomed the extension of the jurisdiction of the Parliamentary commissioner for administration, now made possible by section 110 of the 1990 Act. This makes it possible for the commissioner (“ombudsman”) to investigate maladministration by court clerks in the performance of their administrative functions, eg losing court files, failing to notify one or both of the parties of a hearing date, listing cases as undefended when (in fact) the defendant had indicated an intention to defend them, failing to list cases which the parties have attended, notifying parties of wrong dates, wrong times or non-existent dates, and so on.
Certain cases will still be dealt with exclusively by the High Court, for example appeals on a point of law from the Commissioners of Inland Revenue, appeals on a point of law from (commercial) arbitrations, applications for judicial review and similar public law claims (not involving private law rights and duties), statutory appeals from the Secretary of State for the Environment (or from a planning inspector) and similar statutory appeals from administrative tribunals.
Some changes have already taken place, for example county court registrars are now called “district judges” (section 74 of the 1990 Act). A similar title has been given to district registrars of the High Court and registrars in the Family Division of the High Court. This change of title was recommended by the Report of the Review Body of Civil Justice. It is a recognition of the increasing amount of judicial work which these officials carry out. In the case of the county courts, district judges deal not only with the interlocutory work of the court (with some exceptions) but they tend to take most, if not all, of the small claims arbitration cases, and a considerable amount of landlord and tenant work (eg possession actions for rent arrears). As in the case of commercial arbitrations, the decision of a district judge (sitting as an arbitrator) will be final in small claims cases. The only right of appeal will be to the circuit judge of the court on a point of law.
Finally, it is instructive to note section 12 of the 1990 Act. Both the High Court and the county court now have the power to impose a financial penalty (a maximum of £400) on any party who fails to attend a hearing without first notifying the court of his inability to do so (or of his intention to withdraw his claim or to abandon his defence). This is in addition to any other consequence of the failure in question (eg an order to pay costs), although these must be taken into account when deciding the amount of the penalty.
High Court/county court claims
Claims for less than £25,000
There will be a presumption that these proceedings should be commenced and tried in the county court. (This presumption does not apply to equity proceedings or to contentious probate proceedings.)
Claims within the range £25,000 to £50,000
There will be no presumption as to the court to be used. Cases will be allocated to whichever court is appropriate, having regard to the criteria listed in section 1 of the Courts and Legal Services Act 1990 and the statutory instrument itself, especially the criterion of complexity (or otherwise) and the need for speed.
Claims for more than £50,000
There will be a presumption that these proceedings should be commenced and tried in the High Court.
