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Civil justice in the 21st century

3 This Chapter outlines the broad policy principles that we believe should underpin civil justice reform and explains the background to our decision to embark on a major review of our civil courts.

3.1 As Chapter 1 explained, civil justice covers a range of services, mechanisms and institutions. They share a common aim to provide people, businesses and public bodies with ways to resolve legal problems and to sort out legal disputes in a fair and just way, and taken together, they can be said to form the civil justice "system".

3.2 Since devolution, the Executive has driven forward a radical programme of reform to the criminal justice system, which has to some extent meant that reforms to civil justice, while still continuing, have had a lower profile. Over the last few years, however, the Executive has become increasingly convinced of the need to direct more attention at the civil side of the justice system. This has been driven by a number of factors. A growing awareness of public dissatisfaction with aspects of civil justice, as brought out in research, ³ the emergence of interest in mediation and other new methods of dispute resolution, ⁴ and the clear success of new procedures in some parts of the court system ⁵, showing the benefits of new ways of working, have all suggested that there are opportunities to improve the delivery of civil justice for the people of Scotland.

PRINCIPLES OF REFORM

3.3 We need to be clear about the principles which will underpin future reform. There are two key principles that we believe should inform all proposals for change in civil justice: proportionality and value for money.

PROPORTIONALITY

3.4 Like any system, the civil justice system has to balance a number of different demands upon its processes and resources. The civil justice system deals with problems and disputes which concern civil legal rights or responsibilities; typically there will be doubt or disagreement as to which of a number of competing legal rights and interests should, in law, prevail. The challenge for the civil justice system is to provide mechanisms which will enable problems or disputes to reach outcomes which are correct in law, which strike the appropriate balance between competing legal rights, or which, if they involve a compromise of legal rights, do so with the informed agreement of the party or parties involved. It also has to try to provide such outcomes within a reasonable time, and at a reasonable cost to the parties involved and to the public purse.

3.5 What is reasonable in terms of time and cost will vary according to the circumstances of the case. The test is proportionality - whether the level of legal and, where appropriate, judicial resource applied to an issue is proportionate to the importance and value of the issue to the parties and to society in general. In a child abduction case for example, or where a decision is urgently needed about a medical intervention, time may be of the essence, but it will also be extremely important that the outcome is correct in law; the need for difficult and complex legal decisions to be taken within a short timescale will mean that a high level of legal and judicial input is needed quickly; containing costs may therefore be difficult, and should in any event, many would argue, be a secondary consideration in such a case.

3.6 A case involving a novel point of law that will have an impact on a number of other cases will also merit time and care being expended on it, even where the monetary value of the case is small. In many other cases, however, where the value of the issue in dispute is small and there are no complex legal issues, the proportionality principle will mean that the priority should be to ensure that a fair determination is reached quickly and at a reasonable cost.

3.7 To a large extent the proportionality principle is already incorporated into the civil legal aid scheme, in the form of the "reasonableness" requirement which has to be satisfied before public funding is provided for a court case. The same is not, however, true when we come to look at the allocation and use of other public resources in the form of judicial and court time. At the moment it is all too easy for a party who has the desire and resources to do so, to pursue (or defend) a case for an indefinite period, on the basis of little or no valid legal argument, even where the sums involved are insignificant, causing expense to his or her opponent and using up valuable public resources in the form of court time.

3.8 We believe that this needs to change. We also believe that the court itself is best placed to make the judgment about how a case should be initiated and presented to it, what processes it should follow, and how much of the court's time and other resources should be allocated to it. The civil courts review will have the task of identifying how best to reform court processes so that our judges have the tools to ensure that cases are dealt with in ways which are proportionate to their monetary value and the importance and complexity of the issues raised.

VALUE FOR MONEY

3.9 Civil justice is a public service. The public is entitled to expect that the services provided by the different parts of the civil justice system deliver value for money. They are also entitled to expect that they meet reasonable expectations based on other, more difficult to measure values, such as treating people fairly and with respect, and being accessible. We want to try and develop indicators which will help us to assess and compare the extent to which different types of service within the civil justice system provide value and efficiency, in terms of their monetary cost both to the public purse and to the people and businesses using them, and in terms of how well they meet public expectations. This will be a complex task, involving considering what are desirable outcomes and reasonable expectations.

3.10 There are choices to be made about priorities for investing in the civil justice system. One of the key considerations is where the balance should lie as between supporting the provision of advice and early resolution services, and investing in formal structures such as courts. It is not a question of preferring one to the other - both are needed. But we think it makes sense to pursue policies that work towards the early resolution of disputes, preferably by negotiation between the parties involved and without resort to the courts. So one of the factors that we believe should be incorporated in any assessment of value for money is the extent to which a service or a process helps or hinders the resolution of a dispute.

3.11 We also of course fully recognise that some disputes can, or should, only be resolved by the determination of a court, or by the prospect of such a determination. We see no reason why the same principle should not apply to those cases. Where court processes are necessary, we believe they should be as swift and straightforward as possible, and should work in ways which promote early clarification of the points at issue and prevent the escalation of expense.

Key principles for civil justice reform

• Proportionality - systems and processes that are proportionate to the importance, complexity and monetary value of the issues involved; and
• Value for money - making sure civil justice services are efficient, meet reasonable public expectations, and promote early resolution of disputes.

SCOTTISH CONSUMER COUNCIL CIVIL JUSTICE ADVISORY GROUP

3.12 These principles give us a benchmark against which to judge proposals for future reform. The next stage is to identify the scope for reform. A review of civil justice with too broad-ranging a remit may risk becoming unwieldy to manage and unfocussed in its work. It could also end up duplicating or contradicting reforms already under way. We believe that any review needs to focus on the areas most in need of change, and to have a remit which sets out clear parameters within which it is to work, and clear objectives which can be fulfilled within a reasonable time. It is also vital that such a review commands wide-spread confidence and support.

3.13 We were therefore very pleased to support the initiative of the Scottish Consumer Council, under the auspices of the Nuffield Foundation, to hold a series of seminars to examine the case for and against a review of civil justice in Scotland, and to bring out suggestions for change. Under the energetic and experienced leadership of the Rt Hon Lord Coulsfield, the SCC's advisory group, which included representatives of all the key stakeholders, produced a detailed and thoughtful report in November 2005. The report called on the Executive to establish a civil justice review and identified a number of key issues which it considered should be the main focus of that review. These were:

• The disproportionate cost of litigation, particularly in cases of lower financial value;
• Disruption to civil cases because of the priority given to criminal cases in the court system;
• The potential benefits of increased specialisation among courts and judges;
• The possibility of increasing the role of the courts in case management, which may reduce time taken and costs;
• Payment arrangements for lawyers including fixed fees;
• Increased powers to ensure court judgments are observed.

OUR RESPONSE TO THE REPORT

3.14 The Report has been extremely helpful in highlighting the issues and stimulating debate on civil justice and we agree with the general thrust of its conclusions. We would identify the first four of the key issues as being the ones where we see the most urgent need for review.

Disproportionate costs

3.15 The identification of the disproportionate costs of litigation as a major issue is very much in line with our own thinking. The relatively low level of the small claims limit - currently £750 - means that the procedure is now not available for use for many consumer claims. This undermines the purpose for which the procedure was originally intended and means increased costs for many court users who have to raise actions under the more complex and time consuming summary cause or ordinary cause procedures. The low threshold for raising actions in the Court of Session - currently £1500 - is also now questionable. It is clearly time for a close look at how straightforward cases of relatively low value should be handled, as well as a detailed examination of the factors that merit cases being brought before the higher courts.

Specialisation and balancing the demands of civil and criminal business

3.16 In recent years there has been an increasing tendency to look to specialised courts or tribunals, or specialist judges, as a way of tackling some of the perceived failings within the current system. This has been evidenced by calls for more judges specialising in areas such as family law, ⁶ by proposals for housing tribunals ⁷ and by the setting up of new tribunals to deal with specific types of case, such as the Mental Health Tribunal, and the Additional Support Needs Tribunals.

3.17 It is argued by those promoting such specialisation that a tribunal is likely to be more accessible and to operate in a more "user-friendly" way than the ordinary courts. The special knowledge and experience of the members of a tribunal, or of a specialist judge, are seen as ensuring that they will more readily understand the issues coming before them and so the quality of the decisions they make will be better than would be made by people without that knowledge and experience.

3.18 The argument about accessibility and user-friendliness is a strong one, but it does not necessarily require a whole new structure to achieve these - changing the way the existing processes work so that our ordinary courts become less intimidating and more accessible may be an equally good, or better, way of achieving the desired result.

3.19 As regards specialist courts, we agree that the development of a body of judges with special knowledge and experience in particular areas may well enhance our civil justice system. We also agree that there is a need to look at how the courts balance the pressures of criminal and civil business, and examine whether there should be more separation. We must not, however, lose sight of the fact that Scotland is a relatively small country with a mix of urban and rural courts, and a limited pool of judges. The current system where the local sheriff courts are able to deal with the whole range of business has distinct advantages as well as disadvantages. The issues surrounding how we achieve an appropriate balance between greater specialisation and local delivery clearly merit detailed examination.

Case management

3.20 We are very much in sympathy with the suggestion that the potential benefits of case management should be examined in depth. We have already seen the value of case management in the High Court reforms and in the Commercial court procedures in the sheriff court, and believe that there are further benefits that could be attained. We would agree that there are a number of possible options for changes to existing procedures, whereby the court is given greater control over the way cases are dealt with, that a review might usefully consider. These could include the possibility of a procedure to deal with multi-party actions or to group similar cases together, greater powers to control the amount and nature of evidence presented and whether this is done in written submissions or by oral argument, and powers to refer disputes to mediation or another form of alternative dispute resolution.

3.21 As regards the other two issues highlighted by the report, i.e. payment arrangements for lawyers, and the enforcement of court judgments, we agree that these certainly merit further examination.

Payment arrangements for lawyers

3.22 Lawyers, like any other profession, are entitled to seek fair remuneration for their services, which are largely provided on an open market basis. We would be happy to see the growth of fee arrangements which improve the transparency and predictability of legal costs and increase choice for consumers, and will welcome any moves made by the profession to control costs. The Report of the Research Working Group on the Legal Services Market in Scotland, published in May 2006, considers a number of issues in relation to payment for lawyers. We and the relevant stakeholders are now considering these further. The Executive's remit to intervene directly in payment arrangements is, however, limited to those areas where payments are funded from the public purse, or ancillary areas where there is a public role to be performed, such as the taxation of costs by the auditors of court.

Enforcement of court judgments

3.23 We have already undertaken an overhaul of our system of court enforcement in the Bankruptcy and Diligence etc. (Scotland) Act 2007. Reform will strike a better balance between the interests of debtors and creditors, and provide for independent review of the effectiveness of the reformed system by the Scottish Civil Enforcement Commission to be set up under that Act. Decisions on the operational date for the Commission will be taken by the incoming Administration. We would therefore not rule out new reforms that will further improve the effectiveness of the system.

THE FUTURE DIRECTION OF CIVIL JUSTICE REFORM

3.24 Following the publication of the Consumer Council's report, we held a number of meetings with a broad range of stakeholder interests to discuss its conclusions and help us to reach a decision on what our next steps should be. We also brought the issues before the Scottish Parliament in a broad-ranging debate on Civil Justice Reform on 20 April 2006. The report, the meetings and the debate have all helped us to re-assess our priorities for future civil justice reform and to identify where there are gaps which need to be filled. They revealed a clear consensus on two main issues:

• It is vital that people have access to good quality information and advice, and in some cases representation, particularly at an early stage in a dispute in order to try and prevent problems escalating and positions becoming entrenched;
• The civil courts do not, on the whole, currently provide processes which help to resolve disputes at the earliest possible stage, or at a proportionate economic cost. In fact current court process are able to deal fairly quickly and economically with undefended cases, especially low value debt cases in the sheriff court, but there is a widely held view that disproportionate costs and unacceptable delay are an inevitable consequence when a case is defended.

3.25 We believe the priority for civil justice in the foreseeable future should be to address these issues. Chapters 4 and 5 explain what has already been done and what is currently in progress or planned. The detailed development of plans for long term reforms will be for a future Administration to decide.

Information and advice

3.26 We are already doing a great deal to improve access to advice and information and will continue to pursue the programme of work already under way, as set out in Chapter 4. We will increase access to good quality legal information, advice and representation, including publicly funded legal assistance, and continue to support and raise awareness of mediation and other processes that promote early dispute resolution.

The civil courts

3.27 Chapter 5 sets out a number of recent and current initiatives aimed at improving court processes. We have, however, come to the conclusion that there is a need for an in-depth look at the structure and procedures of our civil courts, with a remit to produce recommendations for changes to achieve a system which deals with cases justly, within a reasonable time and at a reasonable cost, i.e. which provides proportionate dispute resolution. We believe that such a review needs to be led by a senior member of our judiciary and are delighted that Lord Gill has agreed to take on this extremely important task. We envisage that the remit will be broad enough to encompass an examination of the issues raised by the four conclusions of the Scottish Consumer Council report which we discuss at paragraphs 3.15 to 3.20 above.

Modernising civil justice - our priorities

• we will continue our work to increase access to good quality legal information, advice and representation in civil matters, including publicly funded legal assistance; and
• we will establish a review of our civil courts under the leadership of Lord Gill.

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