01 Mar 2019
The Civil Procedure Rules in England and Wales are the subject of continual debate, scrutiny and evolution. A set of changes are pending which address Litigants in Person, with a consultation on further changes underway which concern the enforcement of possession orders.
These developments will affect all lenders engaged in borrower litigation in England and Wales.
Changes to the Civil Procedure Rules are anticipated to be effective from 6 April 2019. The proposed changes introduce new rules aimed at assisting Litigants in Person and increasing open access to justice for all. This is relevant to lenders who often have to pursue claims against borrowers who act as Litigants in Person.
One of the changes requires parties to copy in other parties to all correspondence with the court. This is to address a perceived concern that litigating parties who are represented by a solicitor may communicate with the court without notifying opposing Litigants in Person, putting the Litigants in Person at a disadvantage.
The proposed changes also enable the court to give directions to encourage the represented parties to co-operate in providing an informal record of the proceedings while the formal approved transcript is awaited. This is intended to enable Litigants in Person to seek legal advice as to the merits of an appeal, without a delay in having to wait for a formal approved transcript and at less cost to the Litigant in Person.
The proposed changes are currently awaiting Parliamentary approval. Although they may seem relatively minor additional burdens which lenders and their solicitors will have to comply with, they are part of a wider trend aimed at levelling the playing field for Litigants in Person, such as borrowers, and assisting them in accessing the justice system.
The systems for enforcing possession orders in the High Court and the County Court contain some distinct anomalies.
In short, the County Court process is largely an administrative action with no judicial involvement. County Court Bailiffs carry out evictions, occupiers of premises are provided with advanced notice and costs are relatively low. But there are often delays and it is not uncommon for occupiers/borrowers to use the advanced notice to file last minute applications to suspend the eviction. This can lead to further time delays and costs and often serves only to delay the inevitable.
In contrast, the High Court process requires a degree of judicial involvement, with external third party High Court Enforcement Officers being instructed to undertake the eviction, rather than court appointed bailiffs. The system is usually quicker, but more costly and there are limited provisions for the giving of notice to occupiers.
The Civil Procedure Rules Committee (CPRC) has opened a consultation which is attempting to address the anomalies.
The vast majority of lenders in the residential mortgage context obtain possession orders in the County Court and use the County Court enforcement process. There are circumstances in which they may wish to “transfer” an order to the High Court for enforcement to take advantage of some of the unique features of the procedure in the High Court. However, the process of “transferring up” to the High Court in itself causes delay and additional cost.
From a borrower perspective, the practical effect is the same: an eviction takes place. But the two systems can lead to confusion and in some cases cause unnecessary delays with increased and inconsistent costs.
Ultimately, the consultation in question, in which Aberdein Considine is taking part as a stakeholder within the lender services sector, could lead to a harmonisation of the rules across the County Court and High Court. The logical approach would be to take the best parts from each system and dispense with the worst parts in order to create a harmonised hybrid system which functions across both the County Court and the High Court.
The consultation is likely to result in a change in the Civil Procedure Rules, with any future changes affecting all lenders who seek possession orders from the courts in England and Wales. It is important to maintain a watching brief on the consultation and its outcome to ensure that changes are understood and implemented as quickly as possible.
Thomas Lillie is a Partner in the Banking Litigation team based in Newcastle.