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House of Lords

Friday, 13th November 1998.

The House met at eleven of the clock: The PRINCIPAL DEPUTY CHAIRMAN OF COMMITTEES on the Woolsack.

Prayers--Read by the Lord Bishop of Southwark.

Civil Procedure (Modification of Enactments) Order 1998

The Minister of State, Cabinet Office (Lord Falconer of Thoroton) rose to move, That the draft order laid before the House on 5th November be approved [47th Report from the Joint Committee].

The noble and learned Lord said: My Lords, in April 1999, my noble and learned friend the Lord Chancellor will introduce the most fundamental reform of the civil justice system since the judicature Acts of the 1870s. As he said in this House on 29th July, the reforms aim to provide a single system of civil justice based on the fundamental principles of proportionality, clarity and efficiency. The draft civil procedure rules put before the House for debate in July reflected the most essential part of the reforms--a complete code of civil procedure to implement the expressed objectives of the new system.

But there are other steps to be taken in this process of reform which, although apparently more minor, still make an important contribution to the achievement of the modernisation of the civil justice system which is so long overdue. One of these steps is implementation of the Civil Procedure (Modification of Enactments) Order 1998 before your Lordships today for debate. Before I expand on the various provisions in the order, I shall take a few moments to explain why its introduction is so necessary.

The order is made under Section 4(2) of the Civil Procedure Act 1997, the Act which paved the way for the reforms of civil procedure I have mentioned. It set up the Civil Procedure Rule Committee and gave it the task of drafting the new civil procedure rules.

When the 1997 Act was passed, it was recognised that certain aspects of the reforms might conflict with existing provisions of primary legislation. Some of these would be simply a question of terminology. For example, the new rules provide for all proceedings to be commenced by using a claim form. However, many statutes refer to "writ". Section 4(41) of the 1997 Act allows the Lord Chancellor to make such consequential changes to legislation by order which is subject to the negative resolution procedure.

Other changes, however, are more substantial and are required in order to facilitate the making of the rules. The rules cannot have effect until the changes to the primary legislation have been put in place. Parliament recognised that such changes of substance might be necessary in order to make the new reforms effective. However, it rightly wanted an opportunity to debate the changes before they were made. Section 4(2) of the

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1997 Act therefore allows the Lord Chancellor to make changes to primary legislation in order to facilitate the making of the civil procedure rules, but the order is subject to the affirmative resolution procedure.

The changes the order makes to primary legislation are small but significant. First, the order amends Section 17 of the Judgments Act 1838. Section 17 provides for statutory interest to be payable on High Court judgment debts. There are two amendments proposed to this section. The first would allow the court to provide that interest begins to run from a date earlier than the date of judgment. This is important in the context of providing a claimant with an incentive to offer to settle his claim. Mechanisms to encourage early settlement are an important part of the civil justice reforms. The rules will provide that the court may order that a claimant is entitled to his costs from the latest date when the defendant could have accepted the offer without needing the permission of the court, together with interest on those costs. The amendment to Section 17 is needed in order to allow the court to award interest on costs from that date, thus recognising that a party is progressively incurring costs throughout the life of a case.

The second amendment, conversely, would allow the court to disallow all of part of any interest that would otherwise be payable under Section 17. That is again aimed at costs orders so that a party who delays initiating taxation of costs does not profit by his delay by accruing interest on the amount of costs finally payable to him.

Interest on judgment debts in the county courts is governed by Section 74 of the County Courts Act 1984, which allows the Lord Chancellor to make provision by order--currently the County Courts (Interest on Judgment Debts) Order 1991. No amendments to primary legislation are therefore required in this context as far as the county courts are concerned.

The order amends the Law Reform (Husband and Wife) Act 1962 by removing Section 1(3), which requires rules of court to oblige the court to consider a stay in tort actions between husband and wife early in the proceedings. This mandatory provision is no longer considered appropriate in the light of the new case management provisions in the rules. It is not intended that the civil procedure rules will contain a requirement for the court to consider such a stay.

Section 33 of the Supreme Court Act 1981 permits the High Court to order pre-action disclosure of documents where a claim in respect of personal injuries or death is likely to be made. Section 52 of the County Courts Act 1984 makes similar provision for the county court. The rule committee has recommended that it is appropriate for those provisions to be extended to encompass all proceedings, not just personal injury or death. The order makes the necessary amendments to those sections to provide for this.

Section 34 of the Supreme Court Act 1981 and Section 53 of the County Courts Act 1984 permit the court to order discovery against a person who is not a party to proceedings where the proceedings include a claim for personal injury or death. Again the rule

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committee has recommended that it is appropriate for those provisions to be extended to cover all proceedings, and the order provides for that.

The order will repeal Section 47 of the County Courts Act 1984, which allows a child to sue for wages without a next friend. This provision dates from a time when so called "minors" were much more likely than now to be earning their own living. In any event, the Civil Procedure Rules would allow a child to apply to the court in any proceedings to bring or defend a claim without a next friend. The specific provision contained in Section 47 will no longer be necessary.

Section 63 of the 1984 Act sets out the power of the county court to appoint an assessor. It is more restrictive than the High Court power and in general requires the appointment to be on the application of a party. The order proposes to remove that requirement and to widen the power generally to enable the provisions in the Civil Procedure Rules dealing with the appointment of assessors to apply to both the county court and the High Court. This is a step towards the overall goal of a unified system.

Section 133 of the 1984 Act provides that where documents are served by a county court, the court must provide a certificate of service which is to be "under the hand of" the officer concerned. This provision is now outmoded and restrictive in the light of continuing information technology developments and the order would remove the requirement for personal signature by the court officer.

Section 134 of the 1984 Act deals with the sealing of certain documents issuing out of the county court and the evidential status of such documents. Again it is restrictive in the light of the development of electronic seals. The order would repeal the section. This will enable more flexible provisions to be contained in the civil procedure rules themselves.

I have explained why the various provisions of this order are necessary. As I said earlier, they are in themselves relatively minor. But together, they will help to contribute towards the achievement of the objectives of the civil justice reforms.

I commend the order to the House. I beg to move.

Moved, That the draft order laid before the House on 5th November be approved [47th Report from the Joint Committee].--(Lord Falconer of Thoroton.)

11.15 a.m.

Lord Kingsland: My Lords, the noble and learned Lord the Minister will not be surprised that I have a few questions to address to him in relation to the matters with which he has just dealt.

My first point is a general one. These changes assume that the decisions of the rules committee will ultimately become law. Throughout the speech of the noble and learned Lord he anticipated those decisions. Can he tell your Lordships' House whether or not the committee has taken the decisions upon which those subsequent changes are to be based? One thing he cannot tell your Lordships' House is that the rule changes have been

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approved by your Lordships. With the greatest respect therefore I suggest to the Minister that all these provisions are premature and that the appropriate time to have brought this order to the House would have been after the rules had been properly drafted and approved by your Lordships.

In addition to that general observation, I have one or two detailed questions to ask in relation to the various individual changes that the Government propose. The first concerns Section 17 of the Judgments Act 1838. Interest is already payable prior to judgment as a result of Section 69 of the County Courts Act 1984 and Section 39A of the Supreme Court Act 1981. Will the Minister be kind enough to explain to the House the relationship between his proposed changes and the provisions in those two Acts?

My second question concerns the amendment to Section 17, which is needed in order to allow the court to award interest on costs after a specific offer has been made and refused. I take it that the reason behind this initiative is to pressurise parties to litigation to come to an early settlement. I am aware that one of the fundamental objectives of the noble and learned Lords the Lord Chancellor and the Minister is to try to reduce the cost of litigation. But does the noble and learned Lord not think that, far from doing that, this initiative will lead to an increase in litigation costs?

The noble and learned Lord made a reference to pre-trial discovery. As he said, it is already available in personal injuries litigation. As I understand it, it is now the intention of the Government to extend it to all other forms of litigation. Once again, the intention behind this move is to economise on costs. Have the Government done any research into the effect of pre-trial discovery in the personal injuries area? How often is pre-trial discovery ordered? How often does it succeed? How often does it fail and waste costs? Is there any evidence in front of the Government that leads them to the conclusion that the experience of pre-trial discovery in the area of personal injuries has led to economies in cost?

I turn now to the question of discovery against a person who is not a party to proceedings. There is a process in the High Court--not based on the rules, but based on a case called Khanna and therefore known as the "Khanna Application"--which allows such discovery through the subpoena procedure. I can see the attractions for extending that process both to the county court and perhaps to other forums of dispute. But if that is to be done, can the noble and learned Lord guarantee that the same safeguards as would apply to the subpoena process will apply to this wider power he seeks?

I have just two further points to address. I believe that they are both of relatively less importance but, nevertheless, I think that they ought to be drawn to the attention of the noble and learned Lord. The first is the obligation for a signature of a court officer to prove service. There is a suggestion by the Government that that procedure is now outmoded; but we all know the frailties of computers. One of the objectives that that signature would achieve would be to guarantee that

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service had actually been proved. In the absence of that signature, I am concerned that the process will be a less certain one.

I make the same point as regards my other question relating to Section 134 of the 1984 Act, regarding proof of genuineness and the computerised seal. Once again, computers are frail and, without this check and balance, there is a danger that documents will issue which are not genuine. That could cause great distress to people who are mistakenly in receipt of them. I wonder whether the noble and learned Lord is right to dispense with these two procedures. They are, of course, time-honoured, but nonetheless valuable for that.

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