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Small Claims (Courts)

: I understand the hon. Gentleman's experience, but we could slightly broaden our horizons on this matter. If a claimant brings a claim for about €1,000, the legal costs for such a cross-border action, which would generally be higher than for a purely domestic case due to its international nature, could run into several thousands of euros. Claiming back that amount, which far exceeds the amount of the original claim, could be highly disproportionate, and unfair to the other party. That would defeat the entire object of having a small claims procedure: to provide a simplified and accelerated cross-border procedure, with lower costs. Potential claimants will know that they run the risk of having to pay the other party's costs in the event that they lose their case. That will discourage individuals from bringing a claim under the procedure, unless they are provided with certainty about the maximum amount they may have to pay. Several reports, including those conducted by the EU, have noted that cost is the main reason why individuals choose not to pursue legal claims. I believe that during the UK presidency of the European Council the Government sought to rectify the problem by proposing that the ESCP should allow for the recovery of costs, including legal costs, even where the unsuccessful party is not legally represented—the benefit apparently being that costs could be claimed only if they were proportionate to the claim. Although I welcome a proposition that costs should be proportionate, the Government's proposal could do more harm than good. Many potential claimants who may have contemplated bringing a small claim in another member state, and may have been willing, for the sake of saving costs, to represent themselves, will be reluctant to bring a claim if there is the potential for their having to pay any costs at all, even a proportionate amount. A second problem with that proposal is that it could be unfair if an unsuccessful litigant in person would be just as liable for the legal costs of the other party as an unsuccessful party who had legal representation. One of the best features of our domestic small claims system is its rules on costs, which are the cornerstone of a simplified and speedy process. While a person bringing a small claim knows they may not get all their costs back, they also know that if unsuccessful, they will not be burdened with a large costs bill. Having to pay costs will act as a deterrent to people bringing small claims, so a costs rule that entitles a winning party to claim back only a fixed amount of costs may be beneficial, and that fixed amount should include only the costs of court fees and the loss of earnings to the party and witnesses. They are the exact costs that can be claimed back in the small claims system in England and Wales, regarded in the Government's response as"““a leader in the field of small claims litigation””." The introduction of a procedure that contains the two problems I have been discussing will not, in itself, be detrimental to the British people. However, it would be a missed opportunity to introduce a respected and useful cross-border small claims system. Too few people will seek to utilise the procedure due to the problems, so that its potential benefits will be severely constrained. Having reviewed the proposed regulation, we think that a couple of points might have been overlooked by the Committee, and I would be grateful for the Minister's response on them. First, I note that the system is to be based on written procedure, which in the context of saving time and money, is to be commended. However, no account is made for those with low literacy skills. Although the regulation allows for an alternative procedure at the court's discretion, it may be preferable to allow parties automatically to request an alternative procedure, with a presumption that the request is to be accepted unless the court has good reason to refuse. There must however be some mechanism so that a party cannot for tactical reasons demand that an oral hearing take place, thereby potentially placing the other party at a financial disadvantage. The regulation also states some of the alternative methods of taking evidence, which obviously must take into account the greater distances cross-border cases will entail for parties and witnesses when compared with national cases. The methods stated include telephone and e-mail conferences, and such methods raise serious security concerns for obvious reasons. I would be grateful if the Minister told us how that will be addressed. I was disappointed in the Government's lacklustre response to the Committee's comments about the listing procedures. The fact that many litigants arrive in court to find that they may have to wait hours before their case is heard is unfair. The Committee noted that problem, and although it accepted that there were practical difficulties in listing cases for the convenience of both the judiciary and parties, it recommended that the interests of parties should not be overlooked. The Government's response explicitly ignored that recommendation, stating that, as the current system is supported by the Association of District Judges, it should remain in place. Although I accept that the court's time should not be wasted, a more constructive compromise could be found. A system could be adopted that provides for shorter time slots—for example, two or three slots per day, in which parties would appear. Hopefully, that would mean that parties would not have to wait for too long. On the other hand, the amount of judges' time that is wasted should be kept to a minimum. If litigants or their witnesses do not show up or their case is settled, then there will still be other cases to fill up the court's time within the relevant slot. On enforcement of judgments, it is shocking that up to a third of successful claimants in small claims cases never see a penny of the amount they have been awarded. That undermines the entire small claims system. I welcome the Government's good intentions in respect of their proposed legislation to solve that problem. Such measures as data disclosure orders and an attachment of earnings information gateway seem in principle to be good ideas to enforce judgments. However, it is a shame that it has taken so long for those measures to be proposed, and I am aware of no action having been taken to enact any of them. The Government's response fails to set out even a rough timetable or estimate for the proposed legislation. I note that since the Government's response was published the Secretary of State for Constitutional Affairs has announced the Government's intention to create a national enforcement service, but from the research I have conducted it appears that that service will work primarily to enforce criminal judgments. I would be grateful if the Minister told me whether I am right about that. It is unclear whether the service will be for the benefit of parties wishing to enforce a civil claim. It barely gets a mention in the Department for Constitutional Affairs press release, while Her Majesty's Courts Service website makes one reference. It states that the service will"““amalgamate civil and criminal enforcement activity””" and yet the"““feasibility of this needs further testing””." It would seem to be a good idea for the national enforcement service to assist successful claimants to enforce judgments against defendants who are refusing to pay. From my knowledge of the service, that does not appear to be its priority, or even on its list of aims. I would be grateful if the Minister provided clarification on that. If I am correct, it would be a missed opportunity to rectify a serious problem in our small claims system, as my hon. Friend the Member for Hornchurch suggested.