Just before Christmas last year the Ministry of Justice unveiled plans to stop refunds of hearing fees in county court cases from 6th of March 2017. Although these changes have come into effect only recently, the implications were already in place back in December for anybody who issued county court proceedings on a flight delay case under EC Regulation 261/2004.
Currently if a court case is issued against any airline and they file a defence the matter is transferred to Liverpool County Court who case-manage the matter at an early stage. This process – created and developed by Liverpool independently – is a fantastic resource for both passengers and airlines. Dedicated judiciary look at these cases and have an expert understanding of this evolving area of law and have the benefit of seeing hundreds of these cases on a daily basis. This means they can effectively case manage the matters, practise early intervention where appropriate and are able to best manage these cases to a final hearing if necessary.
From Liverpool the matter is the usually transferred to the defendant’s home court and the matter allocated to track and directions set down, unless it is a litigant in person in which case naturally it goes to their home court. One of the Ministry of Justice’s key changes which come into place is there is now an end to the refund of hearing fees, and the case management process set out above means that any court proceedings already issued will be affected if a case has not been allocated to track and listed for hearing.
This is bad news for claimants, defendants and the court service.
Under the old rules a claimant could obtain a full refund of the hearing fee if they notified the court more than seven days beforehand that a hearing was no longer necessary – be that because the case had settled or alternately a claimant wished to discontinue the matter having seen the evidence from the defendant. This allowed both parties that touch more time to take stock of their position and make a more informed decision.
In every claim there is now face an anxious 14 day wait to see the defendant evidence to find out whether a claimant even has any prospects of success.
The changes mean that a hearing fee must be paid at least 28 days prior to the final hearing date. This is all well and good until we consider standard directions on a small claims matter state that disclosure takes place 14 days before a final hearing. Claimants are now faced with the ludicrous position of paying for a hearing which may not take place and also have no prospect of a refund once they see the evidence.
In every claim there is now face an anxious 14 day wait to see the defendant evidence to find out whether a claimant even has any prospects of success. In theory this could encourage defendants to file ever more vague defences working on the basis a claimant would be reluctant to chance their arm paying the hearing fee on what amounts to the toss of a coin.
With hearing fees ranging from £25 to £335 on small claims track cases the amount claimants will be forced to pay to see any evidence from a defendant has more than doubled and it’s difficult to reach any other conclusion than claimants are being forced to pay more for their access to justice.
That having been said, it’s not all good news for defendants as these changes load more pressure on them to assess cases early or face excessive additional costs. Defendant airlines are currently struggling to deal with the sheer volume of claims put forward by passengers and Bott and Co still have to issue court proceedings on more than half the case we settle despite the clarity we have brought to the law with a succession of judgments.
Once court proceedings have been issued a defendant airline have time between defence and disclosure to consider their options and if necessary make offers to conclude matters and to better prioritise their work, with the safety net that a hearing fee could be refunded if settled in enough time.
That time has now been greatly reduced meaning defendant airlines have to make more decisions earlier or face hefty cost penalties as a hearing fee would usually be included in any settlement. For the larger airlines this amounts to a significant liability given they often have thousands of sets of court proceedings a year issued against them, and there is also the looming spectre of cases currently stayed pending the outcome of various lead cases working their way through the court system which haven’t yet been allocated to track.
When we consider litigants in person pursuing matters themselves, this liability is likely to go into six figures for them on just this one argument.
A number of flight delay cases are currently stayed pending the outcome of a referral to the European Court of Justice on the issue of bird strikes. These cases have not been listed for hearing as yet and I know of some defendant airlines that have almost a thousand Bott and Co client cases stayed pending the outcome.
If we take the typical hearing fee as being £80.00, some defendant airlines liability on bird strike cases has increased by £80,000 overnight now that the changes have taken place. When we consider litigants in person pursuing matters themselves, this liability is likely to go into six figures for them on just this one argument.
Whilst raising additional funds for the treasury this proposal does not necessarily equal good news for the court service. Claimants previously paid the hearing fee and had a seven day window after disclosure where they can consider the evidence and decide, if necessary, to discontinue and receive a refund of their hearing fee. With the hearing fee no longer refundable claimants will be tempted to chance their arm at a hearing, ‘in for a penny, in for a pound’, on the basis they’ve paid their hearing fee so nothing is lost.
This would mean longer waiting times for hearings from an already over-worked and under-funded court service, and is further bad news for defendant airlines as they face the prospect of the additional cost of sending representation to these hearings which would not ordinarily recoverable under the small claims rules.
The application of these proposals to the small claims track limit always seemed an accident waiting to happen given the current standard directions when allocating a claim to that particular track. One hopes that further thought has been given to the consequences, or any flight delays proceedings issued over the last six to eight weeks already create additional problems for claimants, defendants and the court service – a lose, lose, lose situation.