West Country Renovations Ltd v McDowell & Anor (Rev 1)

This case has thrown up an administrative issue which affects the practice in the TCC in the High Court in London, albeit that it is a relatively standard disputed final account-type claim. Essentially the issue is the extent to and circumstances in which relatively low value claims should be accommodated as High Court Judge business within the TCC.

The undisputed background to the current case is that the Claimant, which is a relatively small builder, was engaged by the Defendants to do work at the Defendants’ flat in Draycott Place, London, SW3. It seems that the Defendants owned the property between August 2009 and April 2011; having purchased it for some £1.955 million, it was then sold for £3 million. The Claimant asserts that, although there had been an estimate provided by it beforehand for £140,931, there was a signed contract which entitled it to payment broadly on a cost plus basis for instance of materials, plants, sub contracts, scaffolding, accommodation and various other cost heads on top of which a profit overhead mark-up of 15% was to be payable; preliminaries and labour were allowable at given rates. It asserts that there were variations, delays and escalation in cost. It alleges that a total of some £161,542.20 was paid but that a further £104,473.14 is due and unpaid. This claim is set out in about 70 A3 pages of the Claimant’s final account.

The Defence is that there was an agreed cap of £140,931, subject to any established variations beyond the original scope of work. A variety of complaints are made, for instance that the Claimant’s workmen stayed at the premises and that there should be no charge for plumbing and other alterations executed to facilitate this. Issues are taken as to alleged overcharging, for instance in relation to certain rates; other types of issue include whether the cost of putting right the Claimant’s own poor workmanship should be recoverable. A counterclaim is raised provisionally if it is established that there has been an overpayment.

The first Case Management Conference took place on 17 February 2012 the Claimant and the Defendants with their solicitors had fully and properly prepared for it with a case management bundle provided and skeleton arguments. Agreement was reached on directions apart from whether a Scott Schedule should be issued; I ruled that this was not appropriate, at least at this stage, for costs and convenience reasons as well as it not being obviously needed.

I raised with Counsel the point as to whether this relatively small claim should be transferred to the Central London County Court and the TCC designated judges at that court. Politely but forcefully, Counsel made the following points as to why their clients would prefer to stay in the High Court:

Having heard what the parties had to say, I informed the parties at the CMC that I would transfer this case to the Central London County Court. I explained that there were practical as well as policy reasons why this claim would have to be so transferred. Given that a Practice Direction cannot readily be given, this judgment will have to suffice as to the likely new practice in the TCC in the High Court in London.

Historically, the Official Referees (ORs) were not High Court judges although they sat within the High Court. Following the Courts Act 1971, which created circuit judges as such, the ORs in London were designated as Senior Circuit Judges (SCJs). By the time that the ORs Court became the TCC, there were some 8 SCJs sitting in the High Court in London. A High Court judge was appointed, Mr Justice Dyson (as he then was), to be in charge. Following the appointment of Mr Justice Jackson (as he then was) in 2004 to this role, and given the importance of the TCC and its business, it was decided that the London TCC would become fully staffed by High Court judges. This was generally welcomed by solicitors, barristers and court users. Over the last 7 years, the active SCJs have been redeployed or retired or otherwise moved on, with the last two retiring over the last 12 months. There had been a de facto division in the work, whereby broadly the SCJs tended to try and case manage the lower value claims whilst the High Court judges did the rest. This allocation or division of cases between High Court judges and SCJs was sanctioned by the then Lord Chief Justice (see his statement dated 7 June 2005 recorded at http://www.judiciary.gov.uk/media/media-releases/2005/tcc05). Thus, the Court, with up to 6 or 7 judges, could accommodate both high and low value claims.

The work of the TCC in London has since 2004 increased by a factor of about 75% with just under 550 new claims issued last year. Although active case management does reap dividends in that there is a high level of settlements, there remains a very real risk that there will be insufficient judges to deal with the business. There are now 4 High Court judges albeit that a new appointment is anticipated later this year. Those judges have other responsibilities which include the need to sit elsewhere from time to time. In simple terms, there are currently, given their other responsibilities, the equivalent of less than four judges to handle in numerical terms not far short of twice what some 8 TCC judges handled 7 years ago. Additionally, there is a strong feeling that High Court judges should deal with substantial cases. Whilst a certain amount of the smaller cases could be handled by the excellent TCC Deputy High Court Judges and Recorders, current financial constraints have limited that option to some extent.

There is thus a real risk that the progress made and efficiency established by the TCC over the last 7 years could be impacted by having to handle an excessive number of low value claims.

With that in mind and having consulted with the other High Court judges of the TCC, the approach in the High Court in London will be as follows:

It must be emphasised that a claimant can issue a claim in any Court but if he, she or it selects an inappropriate Court or division in which to do so, they run the risk that the Court on its own motion or on application may transfer it elsewhere. This Court does not intend to transfer cases which are already well under way here but, if the lower value claims are issued here, the judges reserve the right primarily at the first CMC (and possibly before) to review the question of transfer.

The TCC in London will normally consider transfer to the Central London County Court where there are currently three TCC designated judges; however, if there is a court which is more convenient, that will be considered also.

The case under consideration is a very standard construction case, namely a disputed final account with issues about proof of cost, recoverability of certain types of work, the reasonableness of various rates and the applicability and impact of a possible cap. Without in any way belittling the importance of the case to the parties themselves, there is nothing of general public importance, such as some novel point of law or construction of a standard building contract. There is no good reason to think that the Central London County Court TCC designated judges will not effectively case manage and then try this case within a reasonable time. The parties had indicated an agreed and reasonable timetable which would secure a trial in December 2012; I have no reason to believe that a trial could not be secured there by about that time. There is as good a chance of the parties settling there as here. The quality of justice will, I am confident, be comparable to that which the parties could have secured here.

It follows that this case will be transferred to the Central London County Court.