Proposed Changes to jurisdictional limits in the Court of
Session and Sheriff Court.
On 12 September 2007 Scottish Government, Justice Secretary,
Kenny MacAskill announced a number of increases in jurisdictional
limits which will come into effect in January 2008.
- Small Claims actions - maximum increases from £750 to
£3,000
- Personal Injury claims are to be removed from the Small Claims
procedure
- Summary Cause actions - range changes from £751 - £1,500 to
£3,001 - £5,000
- Sheriff Court Ordinary cause rules apply to cases over
£5,000
- Privative limit for Court of Session actions rises from £1,500 to
£5,000
The changes have to be seen in their historical context. In
Scotland the Small Claims procedure started with a pilot in 1979 at
Dundee Sheriff Court which led to the enactment of the Small Claims
Rules 1988. The current limit of £750 for Small Claims procedure
was fixed on 30 November 1988 and had increasingly been a matter of
concern to consumer groups. It is therefore no surprise that the
Scottish Consumer Council has welcomed the increase to £3,000,
thereby aiding consumer, party litigant, litigation. Those involved
in holiday insurance should anticipate higher claims next year.
The most interesting and perhaps less straightforward change
relates to the increases relating to the Summary Cause threshold
and the resulting impact upon the lower threshold for Court of
Session litigation. That issue has been a matter of some political
controversy for several years.
Back in 2002 the Summary Cause and Small Claims rules were
redesigned. At the time of the overhaul it was anticipated that the
lower Sheriff Court Ordinary Cause/Court of Session threshold would
rise from £1,500 to £3,000 and the Small Claim limit would rise
from £750 to £1,500. The Regulations which govern the fees of
solicitors in the Sheriff Court were amended in 2002 to reflect
that change, but the jurisdiction limits did not change after
all.
Instead, the provisions became bogged down within the Justice 2
Committee of the Scottish Parliament, and there they have remained
ever since.
However, the matter did not lie there. As an issue it has been
simmering away. Jurisdictional limits, especially as they relate to
Small Claims procedure, were the subject of repeated parliamentary
questions, particularly from SNP MSPs. The change of administration
in Scotland earlier this year has brought this issue back on to the
political agenda.
From the point of view of insurers, the changes should be
welcomed.
In relation to Sheriff Court actions, the new position should be
straightforward. Where an action is brought for more than £5,000
but settles for less than £5,000 then it will be open for the
defenders to seek to have expenses (costs) awarded on the less
remunerative Summary Cause scale. While the Sheriff has a
discretion in relation to all matters of expenses, dealing with
expenses in this manner is a routine matter in the Sheriff
Court.
The position is a little more complicated in the Court of
Session. From January 2008 an action cannot be raised in the Court
of Session for any less than £5,000. Previously it was possible to
litigate in the Court of Session for as little as £1,501. In the
Court of Session, our Supreme Court, cases regularly conclude at
figures below £5,000. Either they settle for less than £5,000 or
they are determined by a Judge at below that level. Over the last
twelve months or so that practice has been increasingly the subject
of criticism from the bench. It seems almost inevitable that the
issue will come under scrutiny in the process of Lord Gill's Civil
Justice Review, but that process has barely commenced and its
conclusion is likely to be at least two years away.
In the meantime, the really interesting issue is what Court of
Session judges will do about expenses in Court of Session actions
which conclude at less than £5,000. From a defenders' perspective,
what we would like would be that Judges award expenses in such
cases on a Sheriff Court Summary Cause Scale. If that were to take
place then the expenses savings would be very significant. Whether
it will work that way will remain to be seen.
Another slightly related issue relates to what to do about an
action which has been raised for more than £5,000, either in the
Court of Session or using Sheriff Court Ordinary procedure, but
where the pursuer has informally offered to accept an offer of less
than £5,000. In those circumstances, we could seek to persuade the
court to remit a Sheriff Court Ordinary action to the Summary Cause
procedure. By extrapolation, a similar argument would involve us
seeking to persuade a Court of Session Judge that such an action
should be remitted from the Court of Session to the appropriate
Sheriff Court to proceed under Summary Cause procedure.
The only fly in the ointment is the exclusion from Small Claims
procedure of all personal injury actions. In the recent past this
has not been a significant issue. With the effects of inflation
almost any personal injury claim at all had a value exceeding £750,
unless a large contributory negligence factor applied. While Small
Claims personal injury actions were technically competent we had
reached the stage that they were almost unknown. Increasing the
Small Claim threshold to £3,000 would therefore have brought many
claims in to that procedure, with significant consequences for
pursuers' solicitors' costs.
The fact that personal injury actions are to be excluded removes
that potential costs saving. In addition, at the lower end of the
scale, any injury element at all in a claim will mean that it will
not be raised under Small Claims procedure. The result is that
motor insurers may find that an even greater percentage of low
velocity low impact accidents will now have a personal injury
component tacked on to bring them out of Small Claims procedure
into Summary Cause procedure. How will it all work out in the
future? I feel that we can only wait and see.
Contributed by Harry Boyle