How The Simple Procedure Rules Are Bringing Court Costs Down
In 2016 Scotland’s court processes to recover debts of £5,000 or less changed following the replacement of the Summary Clause and Small Claims rules with the Simple Procedure Rules which
can be found here.
The aim of Simple Procedure was to provide a speedy and inexpensive way to resolve disputes, with all cases being resolved at least possible expense.
The real potential for lower costs being incurred is evident when it comes to disputed claims which are now handled under a completely new process compared to the previous rules. Following a dispute being received the Sheriff will review privately and then issue to all parties their ‘first written orders’ within two weeks which will order one of the following:-
- arrange a case management discussion;
- refer parties to alternative dispute resolution;
- set a hearing;
- indicate that the Sheriff is considering making a decision without a hearing or;
- dismiss the claim or decide a case under the rules.
Setting a case management discussion (CMD) now provides the opportunity for significant savings in terms of Court fees and expenses in comparison to the previous process with a much simplified process. At the CMD, the Sheriff may:
- Discuss the claim and response with the parties and clarify any concerns the sheriff has.
- Discuss negotiation and alternative dispute resolution with the parties.
- Give the parties, in person, guidance and orders about the witnesses, documents and other evidence which they need to bring to a hearing.
- Give the parties, in person, orders which arrange a hearing.
- Refer parties to dispute resolution
An important point to note is that the Sheriff may do anything at the CMD that he could have done at a hearing, which includes making decisions on a case or part of a case.
Under the previous Small Claim and Summary Cause procedures, once a defence had been intimated, a case would go to a Proof and it was this element that generated the bulk of the potential costs that proved a barrier to court action. This entailed the costs of solicitors preparing for the Proof, citation of witnesses etc. and perhaps most significantly, solicitor costs for conducting the proof which could potentially take a number of hours. If unsuccessful, the pursuer may also have been found liable for the costs of the other side.
The Case Management Discussion route offers a number of ways to reduce these costs significantly. It provides:
- An early opportunity to negotiate a settlement.
- A focus on the elements of the dispute
- An indication from the Sheriff of the likelihood of success
- The possibility that the Sheriff will make a decision without the necessity of a proof. This will be particularly useful where the proposed defence appears to be simply a delaying mechanism.
While there may still be solicitor costs involved in the CMD, they will be significantly less than those incurred in a Proof. This reduces the risk to creditors in pursuing court actions. At the end of a CMD, they have either achieved a settlement, had an early decision made by the Sheriff, or achieved a better indication of the likelihood of ultimate success.
Drawing on our solicitor panel’s experience of CMDs it can be seen how economic this approach can be by giving all parties a chance to discuss and clarify any issues resulting in minimal cases being taken to Proof.
Andrew Foyle, Partner at Shoosmiths LLP, said: “Providing the pursuer is well prepared in advance of the proceedings in terms of paperwork, evidence and witnesses the CMD approach is a valuable tool when dealing with defended cases. It proves to be a cost effective option by giving the Sheriff the opportunity to make a decision at the CMD rather than fixing an evidential hearing where the majority of the costs are generated.”