Businesses that regularly deal with lower value claims (below £25,000) involving consumers and small businesses need to be aware of the new Online Court. The Online Court is expected to be launched in an invitation-only pilot stage at the end of July 2017. The pilot phase will be more evolution than revolution. However, work flows, IT systems and staff training may need to be adapted to ensure you are ready for the full roll-out of the new court.
Why is this pilot taking place?
Last year, we reported on the comprehensive review carried out by Briggs LJ into the civil courts structure in England and Wales. Of his recommendations, the stand-out proposal was the establishment of a brand new, wholly online, court, for the resolution of money claims below a certain value.
Briggs’ proposal was that the Online Court would have the following fundamental features:
- It would be mandatory for money claims below a certain value – likely to be £25,000, after an initial roll-out period.
- It would be based on a three-stage process:
- an automated ‘triage’ stage, giving claimants access to some basic form of advice and helping them to articulate their claim;
- a conciliation stage, which could take one of a number of forms, including telephone, online or face-to-face mediation, or non-binding ‘early neutral evaluation’; and
- a determination stage, for cases that have not already settled, which might take the form of a conventional hearing, a telephone or video hearing, or determination by a judicial officer without a hearing.
- It would be designed for use, from start to finish, without lawyers, although lawyer would not be excluded from the process.
- In order to be accessible to non-lawyers, it would be based on a simplified set of procedural rules, rather than the existing Civil Procedure Rules (CPRs).
- Appeals from the online court would be to the County Court, and thereafter to the Court of Appeal.
What is happening now?
Heeding Briggs’ recommendation to establish an initial pilot as soon as possible, HM Courts and Tribunals Service is planning to launch the Online Court as a pilot as soon as the end of July 2017.
The scope and rules for the pilot are still being considered by the Civil Procedure Rules Committee (CPRC), but the proposals are that the initial pilot will be on an invitation-only basis, drawn from claims that would otherwise proceed through the Money Claims Online system, with a value of up to £10,000.
In line with Briggs’ proposals, the CPRC is drawing up set of procedural rules to govern claims going through the Online Court, which are much-simplified compared to the full CPRs. The ultimate intention is that the simplified rules will be a self-contained code, so that the Online Court will operate outside the remit of the CPRs. However, the legislation that was intended to bring this in (the Prisons and Courts Bill 2017) was shelved when the snap general election was called, and has not yet been re-introduced to Parliament. As a result, whilst the procedural rules being drafted for the Online Court are intended to be simpler to use, particularly for unrepresented litigants, the full CPRs will still apply to any claims in the Online Court.
What is the procedure for claims in the Online Court?
- The pilot will allow claimants to issue claims online, with the court responsible for serving the claim, although this will still be done by posting hard copies to the defendant.
- The defendant will need to respond within 14 days of receipt of the claim, but will be entitled to an automatic 14 day extension, if required, to file the defence. Depending on how the defendant intends to respond, it may be able to do this electronically (for example, if it intends to admit the claim or defend the whole claim), but if it wishes to include a counterclaim or an additional claim, this would need to be done in hard copy and filed by post.
- Following exchange of the claim and defence, the parties will be invited to agree for the claim to be stayed for 28 days to allow for mediation or negotiation of the claim, and the court can refer the claim to a mediation provider to assist with this.
- However, if the parties are unable to resolve the dispute within 28 days, or do not agree to the stay, then the court will transfer the claim out of the online court back into the County Court.
As yet, for example, there do not appear to be any plans to offer the sort of self-help ‘triage’ function that Briggs identified as ‘stage 1’ of the proposed three stage process. Since the rules for the Online Court do not require the parties to comply with any pre-action protocols, there is a danger that instead of leading to fewer claims being issued, the Online Court may result in a higher proportion of claims being issued, rather than settling at the pre-action stage.
The ‘conciliation stage’ in the Online Court would also depend on both sides agreeing to mediation. With the Online Court being aimed at unrepresented litigants, it is difficult to predict the proportion of cases in which both parties will agree to mediate.
Cases that do not settle at this stage would simply transfer back into the County Court. It may be that subsequent iterations of the Online Court incorporate Briggs’ recommendations that greater used could be made of hearings by telephone or video link, or even determination by a judicial officer without a hearing.
What does this mean for businesses?
For the foreseeable future, the Online Court is likely to remain limited to money claims below a certain value (likely to be £25,000, but set at £10,000 for the pilot stage). The vast majority of the claims in the Online Court will therefore involve consumers or small businesses.
Businesses that handle a significant number of claims involving consumers or small businesses will need to get to grips with the rules and processes of the new Online Court. Work flows and IT systems may need to be adapted to work efficiently and claims teams may need training on running cases in the Online Court, particularly if mediation at an early stage with unrepresented litigants becomes the norm.
The initial pilot is invitation-only and has a more limited scope than may be the case when the Online Court is fully launched. It is likely to be some time before the Online Court is launched in an open form and then, eventually, becomes mandatory for qualifying claims. However, businesses that are invited to take part in the pilot may wish to use that opportunity to help them to understand what technical changes and training they may need to put in place ahead of time.