Examination of Witnesses (Questions 60-78)
DISTRICT JUDGE
MICHAEL WALKER
AND DISTRICT
JUDGE DAVID
OLDHAM
11 OCTOBER 2005
Q60 Keith Vaz: Judge Walker, welcome
back. You have given evidence so many times to this Committee
that you really ought to be on this side of the table. In your
evidence to us on this inquiry you describe the enforcement of
judgments as being in a deplorable state of affairs. That is very
un-judge like language. Why are you so cross?
District Judge Walker: Because
what we try and do is offer people not a Rolls-Royce service,
but at least a decent service to get them to the point of a judgment,
and we would like to think that the cases get the judgments which
the cases deserve. Then the winning party is left to his or her
own devices effectively to enforce that judgment. The courts'
response is a reactive one to the enforcement of judgments rather
than proactive. We will do what the successful party asks us to
do. As we said earlier on, the problem is very often that the
bailiff will say there are no goods on which it is possible to
levy execution or one gets an attachment of earnings' order but
the debtor will have moved on to another employer, if indeed he
were an employee in the first place. You may not know where they
bank. There is a whole issue relating to enforcement which, in
fairness to the Department, it has recognised and recognised for
some while. There are numerous problems. There is the big issue
of separating the "can't payers" from the "won't
payers". The "can't payers" just cannot pay and
at the end of the day some people cannot pay, they are just unable
to. On the other hand, there are people who are just not going
to pay, the "won't payers", and one has to try and distinguish
the two. So there is the big issue of the "can't payers"
against the "won't payers". There is also the issue
of information where there is a big issue between the need to
have information and human rights. A data disclosure order may
be fine, but that means a creditor could get disclosure from the
DWP or the Inland Revenue or whoever as to where a debtor is working.
Of course, on the human rights' side people will say that is a
gross intrusion of their human rights and should that happen.
There is a big debate about things like that.
Q61 Keith Vaz: This has been going
on for many years. How many years have you been a judge?
District Judge Walker: Eleven
and a half years.
Q62 Keith Vaz: This has been a real
problem with the system, but there seems to be absolutely no improvement.
Presumably you have raised these concerns with the Lord Chancellors'
Department, as it was then, and the Department for Constitutional
Affairs, but still there has been no progress?
District Judge Walker: There has
been a lot of progress. The Department, in its evidence to this
Committee, does set out some of the ideas which it has in the
hope that it can get the legislative slot and get those provisions
on the statute book.
Q63 Keith Vaz: What do you think
of those ideas? Do you think they will help?
District Judge Walker: Yes, every
one of them. There has been a lot of discussion over a long period
of time. None of what is in the Department's evidence came as
a surprise to us; it is what we will support.
Q64 Keith Vaz: I wonder if you can
explain this: they have been through the system, as you said,
they have appeared before yourself and your colleagues, they have
done whatever is required of them and they cannot enforce their
judgments. Do they blame the judges or the court system?
District Judge Walker: They have
become very disenchanted with the system. Interestingly Professor
Baldwin—who has sent in evidence—some while ago interviewed
people three months after the hearing and asked them the simple
question, "Have you recovered your money?". He discovered
that in a third of the cases people had, in a third of the cases
they had not recovered anything and in a third of the cases they
had recovered something. After that period of time people were
beginning to think they had got all they could recover. You have
a third of the people who are just wholly dissatisfied with the
outcome of the proceedings; they have won and they have lost.
Q65 Keith Vaz: Do you think there
is a responsibility—perhaps Judge Oldham can join in here—on
the judges themselves, right at the start of the process, to advise
the litigants that this is a two-way, two-stage process, winning
is just part of that process and after that you have to get your
money back. Maybe the judges should take a much more proactive
role in advising people right at the start of the process.
District Judge Oldham: I think
the difficulty about that is if one starts off by saying to the
litigant, "We are happy to hear your case, but really you
do not have much chance of recovering any money", it does
not appear to me to accord with access to justice. It is a very
difficult situation. The usual time when it may well be discussed
with the judges is at the conclusion of the case when the litigant
says, "How do I go about getting my money". As judges
all we can do is indicate the sorts of options which may be available,
we cannot make recommendations or offer advice. We can point them
in the direction of where they can get appropriate advice, but
it is very unsatisfactory. Earlier in the afternoon it was suggested
that the litigant has to start all over again from scratch and
I think that is wrong. Of course they have got a judgment, but
that is not worth a great deal to them unless they can turn it
into money. That is where the system is letting them down at the
moment.
District Judge Walker: If I may
say so, what I have discovered is the most effective remedy of
all is pointing out to the paying party that if they do not pay
within whatever period of time I allow them then the judgment
will be registered with the Registry of County Court Judgments.
The trouble is that works as a manoeuvre the first time but, of
course, if the response is, "I have several already",
it is a waste.
Q66 Keith Vaz: You have not seen
a particular enforcement order in any other country or in any
other jurisdiction which is something we do not have that we could
perhaps adopt that would make our process slightly better?
District Judge Walker: No, but
certainly what the Department is now suggesting, the data disclosure
orders, better attachment of earnings' orders and the like, I
am sure will make a significant difference.
Q67 Chairman: I think the issue which
Mr Vaz raises is one which many of us have experienced with constituents,
the small man who does not get his money either from a relatively
large payer or from another small player. There is another issue
which has cropped up which is where you have got big players,
finance houses, pursuing debts within the small claims jurisdiction
area who obtain charging orders. By this means they get themselves
into the position that instead of having an unsecured debt for
which they are charging 19% interest, they have actually got a
secured debt for which they still charge 19% interest, this seems
to have grown exponentially recently. Is my impression correct?
District Judge Walker: Yes, it
is. It is acknowledged to be a problem. The DTI are certainly
well aware of it. At the moment, however, there is nothing much
one can do to prevent it, save to say this. The unsecured lender
may get his security, but getting an Order for Sale is something
totally different. They may have their judgment, they may have
the security of the charging order, but if they then make an application
for an Order for the Sale of the property, what we would very
much do as district judges is bend over backwards to ensure that
the debt is paid by instalments and not at the expense of the
property being sold.
Q68 Chairman: That would apply if
the borrower had in the first place obtained a loan against the
value of the house because the sale issue still exists for the
lender.
District Judge Walker: To be honest,
I would say it is easier for a high street lender who has lent
money on the security of the house to get an order for possession
than it is for an unsecured creditor to get an Order for Sale,
to be honest.
District Judge Oldham: I think
the number of applications for orders for sale is very, very low
compared with the numbers of charging orders which are made. Certainly
in my experience we see very, very few applications for orders
for sale.
Q69 Julie Morgan: Why do you not
want to see the European small claims procedure extend into domestic
cases because I know you support the concept of cross border co-operation,
but not domestic cases?
District Judge Oldham: In our
written evidence we have identified two particular areas where
we think our system is better. One is the financial limit and
the European scheme, which is 2,000 euros, is obviously substantially
lower than £5,000. The second is in relation to costs. There
has been a lot of discussion this afternoon about costs, but costs
are a very big issue and costs overall in litigation, civil litigation
particularly, have really become a major concern all round. They
always were a concern. Lord Woolf had a significant concern about
them. He hoped that his access to justice arrangements would result
in a reduction in costs overall, but I think it is generally accepted
that in most spheres that simply has not happened. It is in the
smaller cases where the costs have become completely disproportionate
to the amounts that are actually being litigated about. That is
why we feel the small claims scheme, as it currently is, with
the very significant limits on costs which there are, is very
valuable as access to justice. For most people it means they know
they can go to court and seek a remedy without any significant
burden in terms of costs coming on them.
Q70 Julie Morgan: Would it be fair
to have two similar systems ready, do you think, where you think
you could have very similar cases but just considering you are
suing somebody who is abroad then you are entitled to the costs
and there are different financial benefits?
District Judge Oldham: I do not
think it would be unfair. As we have already said, I think the
European scheme obviously has advantages for cross-border disputes.
There is a single cross-border dispute mechanism, but internally
we believe the current small claim system, subject to any refinement
that may be needed, is a preferable system.
Chairman: The situation probably as unfair
is not having any readily accessible recourse at all.
Q71 Jessica Morden: The Association
says that there could be a case for increasing the £1,000
limit for personal injury claims to £2,500, and obviously
there is some opposition to this. We had some discussion about
that earlier today. One of the reasons, as you say, being the
disadvantage to lay people. I wonder if you can expand on why
you feel there is an advantage to going up to £2,500.
District Judge Walker: I am so
glad you asked me that. I brought with me this afternoon the seventh
edition of the Judicial Studies Board Guidelines for the Assessment
of General Damages in Personal Injury Cases. Effectively it
is the bible on damages awards. It is not just the judiciary who
have this professionals have it as well. The seventh edition is
the most up to date edition it states the value of awards as at
May 2004, so the figures are 18 months old. If you look at the
sorts of claims which are now valued at £1,000 or more: a
male, trivial scarring, minor only, £1,000 to £1,900
in other words, one would not have a male scar at all now coming
within the small claims track at all. A female, in exactly the
same situation, gets £2,150. The loss or damage to one front
tooth is £1,250 to £2,150. So the sorts of cases Lord
Woolf was thinking about for the small claims track, the trip
on the pavement or the slip in the supermarket, are now going
to be completely outside the small claims track, and we think
there is an undoubted argument on inflation grounds alone for
saying the figures have got to be increased.
Q72 Jessica Morden: Do you think
that the actual value that is being put to these accidents is
going up?
District Judge Walker: Obviously
it goes up with inflation.
Q73 Jessica Morden: Beyond inflation?
District Judge Walker: No, I do
not feel it is. Indeed, in fairness to the profession, the way
they are always argued in front of us, normally the fast track,
is to look at the value of previous reported cases and apply an
index factor to them. There is no attempt to increase the general
level of reward.
Q74 Jessica Morden: In successful
personal injury case which was worth over £1,000 but under
£2,500, how much would the defendant expect to pay in legal
costs on average?
District Judge Oldham: It is a
difficult question to answer because it would depend on what issues
had to be resolved. It is unusual for cases in that bracket to
be litigated or to come to trial purely on the quantum of damages,
it is far more usual where there is an issue on liability. In
fact, large numbers of road traffic cases that we deal with as
small claims are deliberately issued purely for the insurance
excess of £100 so that a decision is obtained on liability
and there may be other issues which may include personal injury
that will be resolved between the insurers. The numbers of cases
that actually come to trial on quantum only for between £1,000
and £2,500 I suspect is extremely small. Undoubtedly, if
such a case were to come to trial, the costs would certainly exceed
£2,500, it could well be double it—I would have thought—because
there are conditional fee agreements, there may be after the event
insurance policy premiums and there may well be a success fee
element, all of which build up the costs to very considerable
amounts. That is one of our particular concerns about keeping
the existing level or eliminating personal injury claims altogether
from the small claims process. There has to be a balance struck
between the proportionality of the legal cost which might be involved
and the awards themselves.
Q75 Chairman: One of the issues which
was raised in the earlier evidence session that if there is not
a lawyer involved, the litigant may be unaware that he would be
justified in seeking a larger claim. Is that something you might
point out?
District Judge Oldham: The danger
is it might not get to us at all on that basis. I think the concern
which is being expressed is that a claim may be intimated simply
by a litigant writing to the other driver's insurers. Claims handlers
become involved from the insurers and they then attempt to settle
the case, possibly by offering a figure which is well below the
true value of the case. In many ways that is an argument for keeping
such claims within the small claims process, so that there is
an impartial adjudicator available to the litigant at minimal
cost who can make a reasoned decision based on experience as to
what the proper level of damage should be.
Q76 Chairman: Would you ever say
to a litigant, "Perhaps you should think again about whether
this is the appropriate level of claim to be making"?
District Judge Oldham: The only
time that really arises is if we are being asked to approve a
settlement for a child. Cases involving children still need the
court's approval for any settlement. Very often we may look at
the medical evidence which has been provided and we may ask the
child and the litigation friend, the mother or father, whoever
it is: "Has Charlie recovered? "Is he still getting
headaches?", this sort of thing, and very often we find he
says, "Yes, he is", even though the doctor had expected
a full recovery within six months and we may well send it away
and say "We need to follow this up, we are not prepared to
approve this at the moment". We do not get the opportunity
to do that in cases involving adult claimants because if the settlement
is done, it is done either before court or before the matter gets
to any sort of trial.
Q77 Dr Whitehead: I wonder if it
would be possible to clarify, as it were, the opposite. Judge
Walker, you very helpfully read out some cases of people with
broken teeth and minor scarring, and this leads me to think what
on earth it could be that one would have to suffer from in order
to lodge a claim of less than £1,000. What would those sorts
of cases be?
District Judge Walker: A road
traffic accident with whiplash injury and one night of some discomfort
with full recovery within one or two days, £750.
Chairman: The claims I should have made
in the past!
Q78 Jessica Morden: In the cases
worth less than £2,500, would it be practical to present
a simple medical report?
District Judge Walker: The sort
of case we are talking about, to be honest is the sort of case
you could decide either by just looking at the individual, quite
often, or with a very simple report from a general practitioner.
That is what it was designed to deal with and not the full blown
PI case where you have a 20 page medical report from a consultant
of 30 years' experience and the like that obviously is very expensive
and very detailed and in its place extremely helpful, but for
these low value cases really an extravagance which the system
cannot support.
Chairman: Thank you very much indeed.
We are very grateful for your concise answers. You have set us
thinking on a number of points which we will follow-up with ministers
and in our final report.
| 
