21 June 2012
Government Cuts Hit TCC Business
In the recent decision of West Country Renovations v McDowell and another the Technology and Construction Court (TCC) has provided guidance that claims valued at less than £250,000 should not be issued in the TCC, contrary to the Civil Procedure Rules, which allow claims worth over £50,000 to be heard in that court (being a Division of the High Court).
The case concerned a typical final account dispute worth an alleged £104,000. The allegations involve classic contractual litigation disputes, including whether there was a fixed price contract; the precise terms of the contract; and issues over the quality of the work carried out.
Proceedings were issued by West Country Renovations, which is a relatively small builder, in the TCC. On 17 February 2012 the matter came before Akenhead J for the first case management conference (CMC).
Despite both parties “politely but forcefully” arguing for the case to be heard in the TCC, the court informed them that the case was being transferred to the Central London County Court. The reasons behind this decision were explained as two-fold.
First, there appeared “no good reason” why the County Court could not effectively case manage and try the case within a reasonable time.
Second, the case did not have any issues of general public importance, such as a point of law or the construction of a standard building contract.
In addition to this reasoning, recent government budget cuts now to have spread to the TCC, and are having a clear impact on the TCC’s capacity. Akenhead J explained in his decision how the TCC has insufficient High Court judges to deal with its caseload. There have recently been several retirements from the court, so that there are currently only 4 judges, as opposed to the previous 8. The impact of this, combined with a 75% increase in the court’s workload and current financial constraints, have led the court to consider significant action to redress the balance.
Therefore, in spite of clear Civil Procedure Rules guidance allowing claims worth over £50,000 to be heard in the High Court, the TCC has essentially increased the limit five times over in the case of standard construction disputes.
Akenhead J issued a list of non-exhaustive exceptions to this rule, the most important being:
- Cases involving new or difficult points of law in TCC business;
- Public procurement cases;
- Complex nuisance claims;
- Part 8 claims;
- Claims for injunctions; and
- Cases involving adjudications, including enforcements and arbitrations, to build up a body of consistent case law in these important areas.
This decision is likely to have taken many by surprise, and will be a disappointment to those that appreciate the TCC’s reputation for efficiency and good judgment. Nevertheless it is evident that in light of the changes within the court itself, and the impact of Government budget cuts, a serious transformation was needed to uphold the competence and effectiveness of the TCC.