PARLIAMENTARY DEBATES

HOUSE OF COMMONS

OFFICIAL REPORT

Third Standing Committee on Statutory Instruments, &c.

DRAFT HIGH COURT AND COUNTY COURTS JURISDICTION (AMENDMENT) ORDER 1993

Tuesday 25 May 1993

LONDON: HMSO

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The Committee consisted of the following Members:

Chairmen: Mr. Joe Benton

Mrs. Gwyneth Dunwoody

Bermingham, Mr. Gerald (St. Helens, South)

Boateng, Mr. Paul (Brent, South)

Byers, Mr. Stephen (Wallsend)

Carlisle, Mr. John (Luton, North)

Hutton, Mr. John (Barrow and Furness)

Jones, Dr. Lynne (Birmingham, Selly Oak)

Knight,Mr. Greg (Lords Commissioner to the Treasury)

Marshall, Mr. John (Hendon, South)

Milburn, Mr. Alan (Darlington)

Pickles, Mr. Eric (Brentwood and Ongar)

Richards, Mr. Rod (Clwyd, North West)

Rowe, Mr. Andrew (Mid Kent)

Smith, Sir Dudley (Warwick and Leamington)

Streeter, Mr. Gary (Plymouth, Sutton)

Taylor, Mr. John M. (Parliamentary Secretary, Lord Chancellors Department)

Maclennan, Mr. Robert (Caithness and Sutherland)

Thomspson, Sir Donald (Colder Valley)

Vaz, Mr. Keith (Leicester, East)

Dr. C. R. M. Ward, Committee Clerk.

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3 Third Standing Committee on Statutory Instruments, &c. Tuesday 25 May 1993

[MRS. GWYNETH DUNWOODY in the Chair]

Draft High Court and County Courts Jurisdiction (Amendment) Order 1993

10.30 am

The Parliamentary Secretary, Lord Chancellor's Department (Mr. John M. Taylor): I beg to move, That the Committee has considered the draft High Court and County Courts Jurisdication (Amendment) Order 1993. The order is made under section 1 of the Courts and Legal Services Act 1990 and makes three amendments to the High Court and County Courts Jurisdiction Order 1991. Article 3 provides that appeals against decisions of auditors under section 19(4) of the Local Government Finance Act 1982 shall be commenced only in the High Court. At present, such appeals are commenced in the county courts whereas other proceedings under sections 19 and 20 are commenced in the High Court. That anomaly may cause practical difficulties for auditors involved in such proceedings. It will be removed by the amendment. The effect of article 4 of the draft order is that a county court judgment or order for the payment of a sum of money arising out of an agreement regulated by the Consumer Credit Act 1974, for which enforcement is being sought by execution against goods, may be enforced only in a county court. At present such judgments can be transferred to the High Court for enforcement where the sum for which judgment has been given is £2,000 or more. The policy behind article 6 of the jurisdiction order was that in all cases where it was sought to enforce a judgment arising out of a consumer credit agreement by execution against goods, enforcement should be carried out only in a county court. The proposed amendment will implement that policy by extending the rule to judgments for £2,000 or more. Perhaps the most interesting feature of the order is article 5, which confers sole jurisdiction on Cardiff county court in proceedings to enforce certain road traffic debts. They arise under the new regime for the enforcement of on-street parking charges in London, established by the Road Traffic Act 1991. The role of Cardiff county court will be to make an order enabling a local authority to recover the charge as if it were payable under a county court order. It will also authorise the issue of a warrant of execution at the request of local authorities. Cardiff's function will be largely administrative, rather than judicial, and the site was chosen primarily on logistical grounds. In no circumstances will the driver be expected or required to attend the parking enforcement centre in person, and the fact that Cardiff is given jurisdiction to deal with the proceedings should not inconvenience drivers in any way. The order was approved in another place on 17 May 1993. 4 10.30 am

Mr. Paul Boateng (Brent, South): Articles 2, 3 and 4 of the order are of merit and, on behalf of the Opposition, I do not have any comment to make about them. I am obliged to the Minister for his explanation—those articles are wholly unexceptionable. A number of matters arise in relation to article 5. Its aims and objectives are laudable and we support them. If the article leads, in effect, to the decriminalisation of such proceedings and relieves the considerable burden on the magistrates courts—which those of us who have practised there know only too well—arising from those proceedings, that is all to the good. However, I am concerned about several matters arising from a memorandum from the Lord Chancellor's Department in response to a letter to it dated 27 April from the Commons Clerk to the Joint Comittee on Statutory Instruments. Members of the Committee will have the memorandum before them. I have had an opportunity to consider the responses therein and, as I said, several matters are of concern to me. It is clearly envisaged that judgments will be entered in the Cardiff county court arising from such proceedings in order to enforce payment of road traffic debts. As a result, warrants of execution will be issued and distress caused to those against whom a judgment has been made in order to recover the debt. We want to be reassured about several matters. The first is the effect of the issuing of a judgment. Will the judgments be placed on the register of judgments? If so, has thought been given to the implications of that for the organisation responsible for keeping that register? It will involve a considerable increase in the amount of work carried out by that agency. It would be helpful to be reassured about that so that those responsible for keeping the register have the means and wherewithal to ensure that it is up to date and that its other functions are not undermined by their having to keep a record of such judgments. If such judgments are to be registered as county court judgments are, has thought been given to the implications of that process on obtaining credit? There can be numerous reasons why such debts arise, not all of them due to wilful unwillingness or inability to pay road traffic debts. Again, anyone who has practised in the magistrates courts and who has sat in on such hearings will know that there are various reasons—many of which are bona fide—why people become encumbered with road traffic debts. It would be potentially disastrous for people if, as a result of a road traffic debt and the provisions of the order, they were incapable of obtaining credit because those factors counted as a judgment against them of which the credit authorities were aware. Is it proposed that any such entry in the register of judgments should specifically note that the debt relates to road traffic legislation? That would enable the credit agencies to draw the appropriate conclusions. If not, I envisage considerable adverse ramifications from the introduction and application of the order. 5 A second matter arises from considering the memorandum. We are all too frequently made aware of the anxiety about the activities of local authority certified bailiffs. Acting at the instigation of local authorities, certified bailiffs have made terrible mistakes in enforcing another form of debt caused by the poll tax—or community charge—and, more recently, by the council tax whereby innocent people have been the recipients of their attentions. The Minister's Department is being tardy in dealing with the long-awaited regulation of certified bailiffs. It has promised action for a long time, but that has not been forthcoming. I am particularly worried by the massive extension of county court jurisdiction which will lead to greater use of certified bailiffs. We must have an assurance that they will be properly regulated soon. Another issue gives cause for anxiety. We know from the way in which road traffic debts arise that people often move on. It is possible that people who accumulate debts will move house and the new occupiers will not know that the previous owner or tenant had acquired a road traffic debt. One morning or afternoon they may hear knocking at their door and be faced with bailiffs who have come round to enforce an order issued as a result of a warrant of execution from Cardiff. If that method of enforcement does not have careful safeguards, I can envisage the extremely red faces of innocent people. What steps will the Minister's Department take to prevent such embarrassment? I welcome the safeguards and opportunities to make representations—culminating in the opportunity to object by statutory declaration, even after the order has been made. That is welcome and necessary. However, I suggest that that novel approach to enforcing road traffic debts will require careful monitoring to ensure that, in trying to meet the desirable objective of reducing the burden on magistrates courts and to improve cost effectiveness and value for money, the Lord Chancellor's Department and the Government have not created a Frankenstein or a juggernaut that will roll on remorselessly, crushing everything in its path, when the nut that it is designed to crush is relatively small and insignificant. When the full rigour of county courts, the entering of judgments, the execution of warrants and the action of bailiffs are involved, unless the safeguards are adequate, the results are potentially horrendous. I have given the Minister an idea of one of my concerns, to which I shall no doubt return later, either in a Committee considering a statutory instrument or elsewhere. A considerable increase in the burden of work will be imposed on the Cardiff county court. I understand the justification for that. I hope that the Minister can assure us that the court has been properly resourced to meet the increased burden of work so that the people living within its jurisdiction will not suffer as a result. That is a concern of Opposition Members who represent Cardiff constituencies. I hope that in due course the Minister will come to the House to reassure us that, when the Government, Government agencies or commercial enterprises have the use of the county court jurisdiction, the additional costs imposed on the system as a result will not add to the burden of the ordinary member of the public who seeks to use the county court system in anything other than a commercial way. Increasingly, for one reason or another, the county court system is being used by commercial and other agencies to enforce and obtain judgments. It is important that they do not clog up the county court machinery. It is 6 also important that they make a fair and equitable contribution to the costs of the county court so that the ordinary consumer does not suffer an additional burden. We intend to give the measure a fair wind, subject to a satisfactory answer from the Minister on those points and reservations. 10.47 am

Mr. John M. Taylor: I am grateful to the hon. Member for Brent, South (Mr. Boateng) for his review of some of the issues at stake. I shall do my best to answer his questions explicitly. The hon. Gentleman and other members of the Committee will be reassured to know that there is no question of such parking matters finding their way on to the register of county court judgments. Parking enforcement orders will not be registered, as they are not considered an indicator of credit worthiness. As the hon. Gentleman suggested, people might resist a claim for a parking charge for reasons whose merits require examination and have nothing to do with the credit worthiness of those seeking to challenge the charge made against them. I may be able to take a few steps towards reassuring the hon. Gentleman about the role of bailiffs. At present, local authorities use private bailiffs to enforce debt repayments. There is no current requirement for local authorities to use certificated bailiffs for general credit collection. Under the procedure that we are introducing, bailiffs carrying out such work are required to be certificated by a judge. I remind the Committee that complaints about certificated bailiffs can be made to the county court which originally granted the certificate. A circuit judge will deal with the complaint and may require a bailiff to appear before him to give good reason why his certificate should not be cancelled. Therefore, there is a redress process, and I am sure that most right-minded people would want there to be such a complaints procedure. Cardiff is to be congratulated on being chosen as the venue because the process was competitive. The 12 circuits were asked to proffer candidates and Cardiff advanced extremely good arguments about the necessary staffing and procedures, and the buildings that could be made available. Quite simply, it is a success story for Cardiff, which won the competition and is to have the facility. That will be for Cardiff's convenience and, paradoxically, for the convenience of London.

Sir Dudley Smith (Warwick and Leamington): I am glad that my hon. Friend has explained that matter as I was going to ask him why Cardiff succeeded. I did not realise that there was competition. I know about devolution, but it seems strange that something of such character is not done in the capital. I have nothing against Cardiff—it is the capital of Wales—but why was not London chosen?

Mr. Taylor: I understand my hon. Friend's question. I am always hesitant about answering for or about London because I am not a Londoner and do not represent a London constituency. For me, London is an away fixture. The advice that I have received is that a number of London magistrates courts are, to use the vernacular, close to being clogged up by parking business. I have not the slightest reason to doubt that advice, and it could be that I have the support of the hon. Member for Brent, South, who has considerable experience of appearing in London courts, which I do not. 7 There is a growing appreciation and anxiety that traffic parking penalty business is taking up an unacceptable amount of time and imposing an unacceptable strain on the summary jurisdiction of London magistrates courts. We have treated parking hesitatingly and unsatisfactorily as part of the criminal order of business. To that extent, other serious matters which come before the summary jurisdictions in London have been inconvenienced. I took comfort from the hon. Member for Brent, South seeming to pre-empt me in advancing the argument for decriminalising parking matters before the courts and regarding unpaid parking penalties as collectable as civil debts. Such a process would place such matters within county court jurisdiction and—rather as with the bulk centre for the issue of county court summonses at Northampton—gather them in a specialist jurisdiction. My hon. Friend the Member for Warwick and Leamington (Sir D. Smith) helped the Committee when he questioned me about Cardiff, which won a competition. It voluntarily rose to a new challenge and I am sure that it will do well. The final point raised by the hon. Member for Brent, South was about bulk users of the county court facility for debt collection. I am sure that he will intervene and correct me if I am wrong and not seized of his point. He asked about those who come to the county courts in a commercial sense, and use them extensively. I expect that he had in mind the utilities such as the water, gas and electricity undertakings, and finance houses including banks, credit charge card firms and mail order companies. The present position is that the same scale of fees applies whether the plaintiff issues thousands of summonses a year or only one. Major plaintiffs do not get a bargain. In addition, although the same rules of court apply to all types of plaintiffs, major plaintiffs, as experienced court users, are generally encouraged to make maximum use of provisions in the rules to prepare originating documents themselves. Plaintiffs who benefit from the facilities offered at the summons production centre and the county court bulk centre are required to invest in computer equipment that is compatible with that of the county court and to comply with codes of practice. We do not provide a bargain basement for the major users. They pay the same unit costs as the person who issues one or two summonses.

Mr. Boateng: Why should not such people pay more? When the Lord Chancellor's Department is imposing, by virtue of changes in the legal aid eligibility rules, a considerable burden on those least able to pay for the civil and criminal justice system, why should not those most able to pay—the commercial users—pay more? The question that I should like answered is not why they are charged the same, but why they should not pay more. If anyone is to pay more for the civil justice system it should not be-through the denial of eligibility for legal aid—the widower or the woman who is seeking access to her children. As the Minister knows, that is currently happening. The commercial, bulk user of the county court system should be the one to pay more.

Mr. Taylor: Perhaps the subject could be approached from a commercial point of view, or as if this were a debating society—although of course, under your chairmanship, Mrs. Dunwoody, our proceedings, the order, and the interests of those concerned are far more important than that. If I were a bulk, commercial user—it 8 was the hon. Member for Brent, South who introduced the word "commercial" into the discussion—far from considering the volume of business and the amount that I paid to be a bargain, I would make an argument for claiming a discount for volume. However, bulk users pay more because the cost per item of handling bulk work is less. The work is prepared in such a way that enormous volumes can be handled, but commercial users pay the same unit costs as the singleton user.

Mr. Boateng: Why should not they pay even more? If people are to be squeezed to fund the civil justice system, let it be those who can afford to pay, rather than those who cannot. The Minister constantly says that he and the Lord Chancellor are—at the Treasury's instigation, they tell us—looking for ways to reduce the burden on the public purse. The course that I have described would be one way to do so without going for the most disadvantaged and the least able to pay. The squeeze should be put on those who can afford to pay.

Sir Donald Thompson (Calder Valley) rose—

The Chairman: Order. We cannot have an intervention upon an intervention.

Mr. Taylor: I am disappointed, because I should like to hear my hon. Friend's remarks.

Sir Donald Thompson: Is it not a fact that bulk users pass all their costs on to the debtor eventually, and that if the bulk user were to pay more, the widow mentioned by the hon. Member for Brent, South would pay more?

Mr. Taylor: I am not sure whether it is not perhaps best at this stage to deal with my hon. Friend's question in a rather homespun way, by inviting the hon. Member for Brent, South to imagine for a moment that he is a shopkeeper in his admirable constituency—I know that, given all his professional attainments, that is improbable. Let him furthermore imagine that I am a customer. I come in and suggest that I might buy one unit from him. He tells me the price. I then suggest that I might buy 100 units, but he tells me that not only would it cost 100 times more to buy 100 units, but he will uprate the tariff because I am clearly a prosperous customer. If I were such a bulk customer, I would ask him, the shopkeeper, for a discount. In the end, the arguments neutralise themselves. The unit cost to the bulk user is the same as the unit cost to the singleton user. There is an element of equity being equality. I hope that that argument commends itself to the hon. Gentleman. 11 am

Mr. Boateng: It does not, but I have no intention of protracting the business of the Committee. However, I warn the Minister that we shall return to this issue because he well understands—although he feigns not to—the point I made. There is all the difference in the world between a free market and one in which the county court is the monopoly supplier of a service. My question was why should not the Lord Chancellor's Department—which is the monopoly supplier of processes for obtaining the enforcement of debt and which has a budget that is particularly stretched—seek to use that position to squeeze the commercial user of the county court system in order to 9 benefit the ordinary and small-scale consumer? Those who can afford to pay should do so in order to help those who cannot. I take the point made by the hon. Member for Calder Valley (Sir D. Thompson). If a judgment is entered against someone which must be enforced, that person should pay more than the ordinary user of the county court system. Having made that point and having undertaken not to pursue it at this stage, the Opposition give the measure a fair wind.

10

Question put and agreed to.

Resolved, That the Committee has considered the draft High Court and County Courts Jurisdiction (Amendment) Order 1993.

Committee rose at two minutes past Eleven o'clock.

THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

Dunwoody, Mrs. Gwyneth (Chairman)

Boateng, Mr.

Hutton, Mr.

Marshall, Mr. John

Pickles, Mr.

Richards, Mr.

The following also attended, pursuant to Standing Order No. 101(2):

Knight, Mrs. Angela (Erewash)

Rowe, Mr.

Smith, Sir Dudley

Streeter, Mr.

Taylor, Mr. John M.

Thompson, Sir Donald