Fifth Standing Committee on Statutory Instruments, &



Thursday 3 November 1988



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The Committee consisted of the following Members:


Campbell, Mr. Menzies (Fife, North-East)

Darling, Mr. Alistair (Edinburgh, Central)

Devlin, Mr. Tim (Stockton, South)

Doran, Mr. Frank (Aberdeen, South)

Douglas-Hamilton, Lord James (Parliamentary Under-Secretary of State for Scotland)

Dunn, Mr. Bob (Dartford)

Fairbairn, Sir Nicholas (Perth and Kinross)

Farr, Sir John (Harborough)

Goodlad, Mr. Alastair (Eddisbury)

Hanley, Mr. Jeremy (Richmond and Barnes)

Home Robertson, Mr. John (East Lothian)

Jack, Mr. Michael (Fylde)

McAvoy, Mr. Thomas (Glasgow, Rutherglen)

Maclean, Mr. David (Penrith and The Border)

Monro, Sir Hector (Dumfries)

Reid, Dr. John (Motherwell, North)

Stewart, Mr. Allan (Eastwood)

Worthington, Mr. Tony (Clydebank and Milngavie)

Mr. D. J. Gerhold, Committee Clerk

3 Fifth Standing Committee on Statutory Instruments, &c. Thursday 3 November 1988



10.30 am

The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): I beg to move, That the Committee has considered the draft Small Claims (Scotland) Order 1988.

The Chairman: With the agreement of the Committee, it will be convenient to discuss at the same time the other order before us, namely The draft Sheriff Courts (Scotland) Act 1971 (Privative Jurisdiction and Summary Cause) Order 1988.

Lord James Douglas-Hamilton: The purpose of this order is to prescribe the types of summary cause that are to be small claims and the amounts of the limits on awards of expenses that are to apply in small claims procedure. My noble and learned Friend the Lord Advocate has now made a commencement order that will bring into force on 30 November the statutory provision, which paves the way for small claims procedure. This provision is section 18 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985. The two orders that we are considering this morning are made under that section. The section sets out the main features of the new procedure. It is a procedure that will be relatively simple and informal. I shall explain first the provisions of the order which define a small claim, Article 2 of the order provides for small claims to be actions for payment of money not exceeding £750 in amount, exclusive of interest and expenses, other than actions in respect of aliment and interim aliment and actions of defamation. Article 2 also extends small claims to actions ad factum praestandum and actions for the recovery of moveable property where, in any such action, there is included as an alternative to the claim a claim for payment of a sum not exceeding £750—again exclusive of interest and expenses. It may be helpful to hon. Members if I take time to explain the reasons that have led to the inclusion of certain types of summary cause action in the order and the exclusion of other types. My noble and learned Friend the Lord Advocate prepared detailed proposals that were set out in a consultation paper issued in March last year. In the consultation paper my noble and learned Friend the Lord Advocate proposed an upper monetary limit for small claims of £750. That was criticised by some as too low, by others as too high, and a third group thought that the figure was about right. There was no consensus in favour of a different figure. The various views suggested that the proposed upper limit of £750 was probably about right, at least to start with. That figure can, of course, be increased later to take account of experience of the 4 operation of the small claims procedure. This brings me to the question of the types of action that should be small claims. The consultation paper proposed to include all money claims up to £750, but to exclude defamation actions and actions between spouses for interim aliment of small amounts. The majority of respondents agreed that, with those two exceptions, actions for payment of money should be treated as small claims. It was pointed out, however, that some small value moneyclaims could be complex and it was argued that cases involving personal injury and road traffic cases should be excluded from the small claims procedure. The arguments in favour of narrowing the scope of small claims for money have been carefully considered. The order proposes the exclusion of actions of defamation and alimentary actions because those actions appeared unsuited to small claims procedure. However, all other monetary actions are included. As regards the other types of summary cause actions that might be small claims, the consultation paper had proposed their exclusion. Some respondents argued, however that actions ad factum praestandum and actions for recovery of moveables should be small claims, particularly because a consumer might prefer to seek and order for performance rather than seek some other remedy. Hence, it has been decided that the definition of small claim should include such actions. The requirement that an alternative money claim of up to £750 is included is intended to distinguish those actions which are to be small claims from those that will require to be raised under other civil court procedures. The provisions in the order that provide for the limits on awards of expenses in small claims are as follows. Article 4(1) makes clear that the limits on expenses do not apply in the circumstances set out in secition 36B(3) of the Sheriff Courts (Scotland) Act 1971. That provision was introduced by section 18 of the 1985 Act. It provides that the expenses limits in small claim actions do not apply in the following circumstances: to undefended actions: to defended actions where the defence has not been proceeded with, or where it has been proceeded with but not in good faith as to its merits, or where there has been unreasonable conduct by either party to the claim; or to appeals to the sheriff principal. Subject to those exceptions, the order provides that no award of expenses is to be made in a small claim in which the value of the claim does not exceed £200. In claims between £200 and £750 the sheriff will be able to aware expenses up to £75. It must be bourne in mind that £75 is the maximum amount awardable. The actual amount of expenses, if any, will vary from case to case. The consensus of responses accepted that a no-expenses limit of £200 was about right. As for an upper limit for small claims of between £200 and £750, the responses suggested that the proposed maximum expenses limit of £75 was also about right. We set out to consult, we consulted, took account of representations, and framed the order accordingly. I hope that hon. Members have found my explanations helpful. The small claims procedure is intended to be simple and the order is intended to contribute to the ease of operation of the new procedure.


10.36 a.m.

Mr Frank Doran (Aberdeen, South): The Opposition's strength shows that there is no dispute about the order. Indeed, we welcome the introduction of the small claims scheme in Scotland. In 1979 a pilot scheme was introduced in my home city of Dundee. It has taken a long time to reach us here. As I was among those canvassed in the survey that the Minister mentioned, I am aware of the depth of consideration that has gone into the scheme's introduction. The essential elements must be simplicity, speed, cheapness and fairness and the Minister referred to all of them. I have had some experience of the pilot scheme in Dundee and feel that the proposals in the scheme meet all those requirements. We do not know how this scheme will operate in private. I was a wee bit distressed when the Minister said that he had no press release for what he was about to say today because publicity is important. It lets people know what is happening and that the new scheme is available. As a practising solicitor I have often had to tell people that it is not worth their while to go to court because of the expense, which in many cases outweighs the benefits of a 6 successful action. I hope that solicitors will not be required to give such advice in future, and that they will simply be able to refer the consumers—that is what claimants tend to be—to the sheriff court, where the sheriff clerk service will give them expert advice and provide access to claims. Thus many claims which would otherwise have been ignored will now be dealt with.

question put and agreed to.

Resolved, That the Committee has considered the draft Small Claims (Scotland) Order 1988.


Resolved, That the Committee has considered the draft Sheriff Courts (Scotland) Act 1971 (Private Jurisdiction and Summary Cause) Order 1988[Lord James Douglas-Hamilton.]

Committee rose at twenty minutes to Eleven o'clock.


Stradling Thomas, Sir John (Chairman)

Devlin, Mr.

Doran, Mr.

Douglas-Hamilton, Lord James

Dun, Mr.

Fairbairn, Sir Nicholas

Goodlad, Mr.

Jack, Mr.

McAvoy, Mr.

Maclean, Mr.

Monro, Sir Hector