Draft County Court Remedies Regulations 2014
The Committee consisted of the following Members:
† Abbott, Ms Diane (Hackney North and Stoke Newington) (Lab)
† Birtwistle, Gordon (Burnley) (LD)
† Bridgen, Andrew (North West Leicestershire) (Con)
† Evennett, Mr David (Lord Commissioner of Her Majesty's Treasury)
Farrelly, Paul (Newcastle-under-Lyme) (Lab)
† Fuller, Richard (Bedford) (Con)
† Griffiths, Andrew (Burton) (Con)
Hames, Duncan (Chippenham) (LD)
† Harris, Mr Tom (Glasgow South) (Lab)
McGovern, Jim (Dundee West) (Lab)
Paisley, Ian (North Antrim) (DUP)
† Reckless, Mark (Rochester and Strood) (Con)
† Scott, Mr Lee (Ilford North) (Con)
† Slaughter, Mr Andy (Hammersmith) (Lab)
Sutcliffe, Mr Gerry (Bradford South) (Lab)
† Turner, Karl (Kingston upon Hull East) (Lab)
† Vara, Mr Shailesh (Parliamentary Under-Secretary of State for Justice)
† Vickers, Martin (Cleethorpes) (Con)
Georgina Holmes-Skelton, Committee Clerk
† attended the Committee
Second Delegated Legislation Committee
Monday 7 April 2014
[Mr James Gray in the Chair]
Draft County Court Remedies Regulations 2014
4.30 pm
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara): I beg to move,
That the Committee has considered the draft County Court Remedies Regulations 2014.
It is a pleasure to serve under your chairmanship again, Mr Gray. The statutory instrument revokes and replaces the County Court Remedies Regulations 1991. A draft was laid before Parliament on 10 March 2014. The draft regulations are also being debated today in the other place.
A substantive change to be made by the statutory instrument concerns the county courts’ jurisdiction in respect of applications for freezing orders. A freezing order is an interlocutory injunction, which restrains parties to civil proceedings from disposing of or dealing with their own assets before judgment can be obtained or enforced. Freezing orders are usually sought before proceedings are issued, when the claimant fears that the defendant is likely to dispose of assets before proceedings are issued. A freezing order, however, may be sought at any time during the course of proceedings and after judgment has been obtained.
The draft regulations will remove the limitations that restrict the county courts from issuing pre-judgment freezing orders. They will enable the county courts to make freezing orders in all cases and enable claimants to make their applications for such orders in the courts where their substantive cases are being heard. The Committee will note that the draft regulations do not lift the restrictions that prohibit the county courts from granting a search order.
The aim is to rebalance jurisdiction between the High Court and the county courts and to make optimum use of judicial resources by widening, where appropriate, the jurisdiction of the county courts, while enabling High Court judges to focus on cases that require a greater level of expertise. The proposal is one of Sir Henry Brooke’s recommendations to improve the administration of civil justice and to provide a more efficient use of judicial resources.
The difficulty with the current position is that if a freezing order is required in county court proceedings, in most cases the application must be made to the High Court or to the mercantile court sitting at the Central London county court, even though the substantive case is being heard in the county court. In such circumstances, the county court has to transfer the case to the relevant court to consider the freezing order application. Once the application is determined, the court transfers the case back to the county court. Such transfers often result in delays, and they increase the costs of the parties
to the proceedings. They also increase the work load of the High Court; that should be avoided for comparatively low-value claims that are likely to be simple and straightforward.The Government consider that the limitations on the county courts’ jurisdiction to make freezing orders should be removed. On that basis, the Government consulted on the proposal in the 2011 “Solving disputes in the county courts” consultation paper. Some 90% of respondents supported the proposal, on the basis that only suitably experienced and qualified circuit judges of the county courts should exercise the additional jurisdiction. Consequently, the draft regulations will revoke the 1991 regulations and, in so doing, remove the limitations. The additional jurisdiction will be exercised by circuit judges nominated by the Lord Chief Justice.
The changes brought in by the statutory instrument will support the Government’s commitment to an effective and efficient civil justice and court system. We consider that the current position is disproportionate and that unnecessary costs are incurred where litigants have to apply to the High Court for a freezing order in connection with ongoing county court proceedings. It follows that the current restriction on the county courts’ jurisdiction to grant freezing orders constitutes a restriction on access to justice for court users. We therefore intend to lift the restrictions to broaden the county courts’ jurisdiction in that regard. I commend the draft regulations to the Committee.
4.34 pm
Mr Andy Slaughter (Hammersmith) (Lab): It is a great pleasure to serve under your chairmanship, Mr Gray.
I do not think we will be here for a great length of time. We have no objection in principle to the changes proposed in the regulations, which allow county court judges to grant freezing orders, which we used to call Mareva orders, in a wider range of circumstances while preserving the status quo on search orders, which we used to call Anton Piller orders. That seems about the right balance. It is another of the recommendations from Sir Henry Brooke’s review of the civil courts, which started nearly six years ago. We are now getting the fruits of that; these are not the first regulations from Sir Henry’s endeavours that we have dealt with this year.
The Minister is right to say that the current process is cumbersome, as it involves proceedings moving from the county court to the High Court and back again, and that there are already a range of exceptions, if, as paragraph 7.1 of the explanatory notes puts it,
“a Court of Appeal Judge or a Judge of the High Court is sitting as a judge in the County Court, or if the order is made by a Mercantile Judge in respect of proceedings in the Central London County Court Mercantile List, who will be a Circuit Judge nominated by the Senior Presiding Judge.”
I hope that there will also be greater clarity about resources. It does not appear that there will be an onerous burden; the regulations might free up the High Court to some extent but will not give many additional burdens for county courts. For all those reasons, we think that the regulations are sensible.
I have one question for the Minister. If I understood the progress of this measure correctly, there has been a common thread throughout. It begins in Sir Henry Brooke’s report, one of whose recommendations, according to the explanatory notes, was
“to permit Senior Circuit Judges…and suitably ticketed”—
“Circuit Judges, authorised by the Lord Chief Justice, to grant pre-judgement freezing orders”.
When the Judicial Executive Board looked at the matter, it effectively repeated the recommendation, saying that jurisdiction should be limited to specified judges and making the point that freezing orders should not be granted in a routine manner. When the Ministry of Justice went out to consultation in the wider county court consultation exercise, “Solving disputes in the county courts”, it said that a majority of respondents supported the proposal but suggested that only suitably experienced and qualified circuit judges in the county courts should be given jurisdiction. The overwhelming majority of the 120 respondents were positive about the measure, but, again, with the caveat that county court judges can handle applications for freezing orders but only suitably experienced and qualified circuit judges of the county courts should be given jurisdiction.
My question is fairly obvious. How will the situation be maintained if the regulations are approved? As far as I can see, they appear simply to give a general dispensation. Is the matter being ignored by the Government or can it be dealt with administratively by the county courts themselves? Alternatively, have I simply missed something in the regulations? That happens from time to time, with the best will in the world.
4.38 pm
Mr Vara: I thank the hon. Member for Hammersmith for his agreement, broadly speaking, to what the regulations introduce. I mention two issues in answer to his question. First, the Lord Chief Justice will nominate the circuit
judges of the county courts and the Judicial College will then provide suitable training to equip the relevant judges to undertake the jurisdiction effectively.Mr Slaughter: In the interests of transparency from the parties’ point of view, will a list be maintained so that the subjects of a freezing order can assure themselves that the judge is of sufficient seniority or has the requisite training?
Mr Vara: The hon. Gentleman will appreciate that the judiciary are independent. It is not for me to tell the Lord Chief Justice how he should go about selecting from among his peer group. However, I am pretty sure that his assessment will be rigorous. Whether a list will be available of all those who meet the criteria will be for him to decide. In practice, the judges involved will be those who can currently sit in the High Court. I hope that that is of some comfort to the hon. Gentleman.
The instrument is an appropriate measure to widen the county courts’ jurisdiction to make freezing orders and so improve access for those seeking them. It would contribute to ensuring that judicial resources are used in the most efficient way possible and ensure that the circuit bench of the county courts can exercise jurisdiction as widely as possible, so reducing pressure on the High Court and enabling it to focus on cases requiring its expertise.