The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.
Kerry Underwood offers consultancy services in relation to this and other matters and details are here.
Regulation (EC) No 861/2007 of the European Parliament and of the Council establishing a European Small Claims Procedure (the Regulation) substantially came into force on 1 January 2009.
It only applies to cross-border disputes and thus cannot be used by a person in England and Wales suing another person or body in England and Wales.
Under the transitional provisions following the United Kingdom’s exit from the European Union on 31 January 2020, the Procedure will remain in place until at least 31 December 2020.
The European Small Claims Procedure (the Procedure) is available to litigants as an alternative to the procedures existing under the laws of the Member States.
The Procedure covers claims up to €5,000 in any EU country except Denmark.
The Procedure includes claims other than for payment of money and can be used where a claim is defended or undefended.
The Procedure is intended to be a relatively speedy and less costly procedure.
A judgment given in the European Small Claims Procedure is recognised and enforceable in another Member State without the need for a declaration of enforceability and without any possibility of opposing its recognition.
The Procedure does not apply to:
- Disputes entirely within one jurisdiction.
- Revenue matters
- Customs matters.
- Administrative matters.
- A state’s liability for acts and omissions in the exercise of its authority.
- The status or capacity of natural persons.
- Property rights arising out of marriage.
- Maintenance obligations.
- Wills and succession.
- Bankruptcy and insolvency.
- Social security.
- Arbitration.
- Employment.
- Tenancies of immoveable property.
- Privacy claims.
Thus it does apply to personal injury claims and this will potentially be a significant jurisdiction if, as planned, the personal injury small claims limit goes up to £5,000 for road traffic accident claims and £2,000 for other claims.
At present, these increases are due to come in on 1 August 2020, no details has yet been given – for example whether the key date is the date of the cause of action, or date of placing on the portal, or proceeding to Stage 3, or issuing Part 7 proceedings.
However, the Procedure may have a very short life as the transitional provisions following the United Kingdom’s departure from the European Union end just five months later on 31 December 2020.
It may be that this is one area which is made a permanent feature of relations between the jurisdictions of the United Kingdom, including England and Wales, and the members of the European Union.
Watch this space.
Process
To start the procedure, “Form A” must be filled in.
Any relevant supporting documents, such as receipts, invoices, etc. should be attached to the form.
Form A must be sent to the court that has the jurisdiction.
In most EU Member States, it will be necessary to pay a fee to the court for lodging the application commencing the Procedure.
Once the court receives the application form it must fill in its part of the “Answer Form”.
Within 14 days of receiving the application form, the court should serve a copy of it, along with the Answer Form, on the defendant.
The defendant has 30 days to reply, by filling in his or her part of the Answer Form.
The court must send a copy of any reply to the plaintiff within 14 days.
Within 30 days of receiving the defendant’s answer (if any) the court must either give a judgment on the small claim, or request further details in writing from either party, or summon the parties to an oral hearing.
An oral hearing takes place only in those cases where it is not possible to give judgment on the basis of the written evidence or if one of the parties requests an oral hearing and the court takes the view that this is necessary to decide the case or in the interests of fairness.
If there is an oral hearing, it is not necessary to be represented by a lawyer and if the court has appropriate equipment the hearing should be carried out through videoconference or teleconference.
With the certificate issued by the court and a copy of the judgment, the judgment is enforceable in all the other Member States of the European Union, without any further formalities.
The only reason that enforcement in another Member State can be refused is if it is irreconcilable with another judgment in the other Member State between the same parties.
Enforcement takes place in accordance with the national rules and procedures of the Member State where the judgment is being enforced.
The court will usually award expenses at the end of the case to the person who is the successful party.
The expenses awarded must be proportionate to the claim and the court should not award any disproportionate expenses to cover lawyers’ fees.
Apart from payment of the court fee, parties should bear in mind that there are expense implications if they request a hearing and the court agrees to this.
In such an event, parties can expect to have to pay the costs of any expert and other witnesses, of translation of documents and of any special procedure used for the hearing, such as video-conferencing.
The court must bear in mind the extra costs involved if the case requires oral testimony from the parties and any witnesses, and will take expert evidence or oral testimony only if it is not possible to give the judgment on the basis of other evidence.
Subject to the provisions of the Regulation, the Procedure is governed by the procedural law of the member state in which the procedure is conducted (Article 19).
For England and Wales the majority of the relevant procedural rules are in Section II of Civil Procedure Rule 78.
The CPR 78 provisions dealing with the European Small Claims Procedure came into force on 1 January 2009, at the same time as the substantive provisions of the Regulation came into effect.
CPR 78 is divided into two sections:
- Section I – European Order for Payment Procedure.
- Section II – European Small Claims Procedure, and it is Section II, paragraphs 12 – 22 that deal with the Small Claims Procedure.
CPR 78.28 deals with mediation in Small Claims.
In England and Wales claims for £100,000 or less must be commenced in the County Court.
Therefore, with the €5,000 limit, Procedure claims will be County Court claims.
CPR 78.14(1) provides that Procedure claims are treated as if they were allocated to the small claims track.
Separately, article 5 of The High Court and County Courts Jurisdiction (Amendment) Order 2008 (SI 2008/2934) allows the County Court jurisdiction over Regulation claims.
Further, article 7 of that order provides that claims brought under Article 4 of the Regulation “must be commenced in [the] [C]ounty [C]ourt”.
Practice Direction 78 – European Procedures – supplements CPR 78, paragraph 10 onwards applies.
Costs
The unsuccessful party will generally pay the costs of proceedings to the other party as long as they were necessarily incurred and proportionate.
The court will appraise the costs on the basis that costs will not be awarded if they are disproportionate to the value of the claim or were incurred unnecessarily and that includes the costs incurred by the successful party if that party had instructed a lawyer.
This is in contrast to the general position with a claim on the small claims track in England and Wales in which only limited costs are usually recoverable.
Proportionality and Costs in the Procedure
In
Senior v Blue Air Management Solution SRL, Liverpool County Court ,11 September 2019
a Circuit Judge gave guidance on costs and proportionality in flight delay claims brought under the European Small Claims Procedure, where costs are recoverable in what would otherwise be a small claim.
Here the District Judge had cut the costs from £1,401.24 including court fees, to £205 as being the “necessarily and incurred proportionate costs” but gave no reasons.
The Circuit Judge held that following the Court of Appeal’s decision in
West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220
this short form of decision was unacceptable and that a reviewing court must be able to see why a substantial costs reduction had been made and gave guidance on how costs in low value flight delay claims under the European Small Claims Procedure should be dealt with.
I dealt with the West case in my blog –
ASSESSING RECOVERABLE AFTER-THE-EVENT INSURANCE PREMIUMS AND PROPORTIONALITY GENERALLY .
The Costs Schedule should first be considered on a line by line basis and only after that exercise should the judge consider whether the resultant total is disproportionate, having regard the factors in CPR 44.3(5) and 44.4(1).
If the total is disproportionate, then the judge should look again at the various stages of the litigation to see if a proportionality reduction can be made without touching unavoidable elements, such as court fees.
There should be a clear and transparent explanation of the exercise.
The appeal here succeeded for lack of reasons.
In another article I will look at the use of the European Small Claims Procedure and the costs implications of doing so.
I am grateful to Jatin Patel, a Trainee Solicitor at Underwoods Solicitors, for much of the research and work in relation to this piece.
