The process that the District Court uses has been substantially changed as from 1 November 2009 (for all new proceedings). If you are contemplating filing a proceeding in the District Court you need to be aware of these changes, and how they will affect your claim.

The District Court has jurisdiction to deal with civil disputes of up to $200,000.00. This would cover most commercial disputes dealing with supply of goods and services. The philosophy of the change is to make the District Court more accessible, and less costly. Previously, debts of up to $50,000.00 sometimes went uncollected, because taking a case right the way through the District Court against a determined opponent had the potential to cost almost that much in legal fees. The aim of the change is to speed matters through the Court, ensure that each side has quick and convenient access to all the relevant documents, and encourage early settlement.

The Old and the New

The old District Court process (applying to all matters filed before 1/11/09) involved filing a statement of claim and certain supporting documents at the beginning of a District Court case. In practice this required starting from a blank piece of paper and building the claim up from that. Unsurprisingly, this could be an intimidating prospect to people who were not represented by a lawyer.

The first notable change is that the Statement of Claim has been replaced by a document called a Notice of Claim. The Notice of Claim is a “standard form” document with a variety of questions, which encourage litigants to set out all the relevant information without formal legal training being strictly necessary. For instance, one question asks the parties to describe what the nature of the relationship between the parties was. Another question requires the Plaintiff to say what the legal duty between the parties was and how it has been breached. If these questions are fully answered, this should (in theory) lead to a full picture of the legal relationship between the parties and the nature of the dispute.

However, there are pitfalls to be concerned about in this process. Firstly, there is little scope to amend pleadings (i.e. Notice of Claim or Notice of Defence) once they have been filed. If a claimant omits a relevant piece of information they may be required to go back to the start of the process if the other party can successfully object to an amendment to the pleadings.

Secondly, unqualified litigants are more likely to “have a go”, encouraged by the more user friendly structure of the Notice of Claim. There is likely to be an increase in litigation, where aggrieved litigants who do not properly understand the strengths or weaknesses of their claim muddle their way through the system. This will put defendants to the cost of defending unmeritorious claims, or put lawyers to the expense of trying to construct a viable case out of a mishmash of allegations, irrelevant matters, and missing facts if a litigant in person realizes that they are in over their head, and seeks help.

Once the Notice of Claim has been filed in the Court and served on the other party, certain very strict time limits start. Firstly, there are 30 working days for the defendant to file a response to the plaintiff’s Notice of Claim. The Notice of Defence has certain strict obligations attached to it. In particular, the defendant is required to specifically deny any allegations that it does not want to admit. Any allegations that have not been denied are deemed to be admitted.

Therefore there is a risk that a defendant who is not legally savvy, or who finds themselves presented with a disjointed or confusing Notice of Claim, may inadvertently admit contentious facts unless they are very careful to identify and deny each and every allegation. The Notice of Defence is not filed in the Court. Instead, it is simply served on the plaintiff. Once this happens, the plaintiff is obliged to serve what is called an information capsule. The plaintiff must serve the capsule within 30 working days. The information capsule is another standard form, and must be accompanied by every single document that the plaintiff intends to rely on to prove its case. Unlike the current District Court process, the plaintiff is not under any obligation to disclose documents that it thinks are unhelpful or that it does not intend to rely on. Once again, it is extremely important to understand which documents are legally significant, because an incomplete information capsule could jeopardise the whole case.

For instance, consider a case of misrepresentation where a business is sold, and the plaintiff claims that the defendant told them that the business made a lot more money than it turned out to make. One of the necessary elements that the plaintiff has to prove is that it relied on the defendant’s misrepresentation. Evidence of this reliance might be emails between the parties setting the misleading figures out as part of a budget. If there was no evidence on this very specific point, the plaintiff’s case could be struck out, or fail at trial.

Once the plaintiff’s information capsule has been served on the defendant the defendant has an obligation to serve a similar capsule on the plaintiff within 30 working days, enclosing every document it intends to rely on.

If the plaintiff does not comply with the timelines, the claim is automatically ended, and they would have to start again. If the defendant does not comply with the timelines the plaintiff can seek Judgment by Default (if the claim is for a specific sum of money) or Judgment by Formal Proof (if the plaintiff claims an uncertain amount of money).

Pursuit of Claim

After the defendant has served its information capsule the plaintiff has to decide whether or not it wants to proceed through the Courts. If the plaintiff does want to proceed through the Courts, it is required to file a Pursuit of Claim form in the Court within 90 days, along with the Notice of Defence and both information capsules. A further fee ($750) will be payable at this point. Presumably this is to encourage settlement once the parties have fully disclosed their positions to one another.

Once the Pursuit of Claim form is filed, any relevant third parties are added to the litigation, on request, and have a chance to file a defence, and their information capsules.

Before the Pursuit of Claim form is filed, the Court will not manage or supervise the proceedings. This is another change from the current rules, and will cut down the Court’s administration time. Once the Pursuit of Claim form is filed, the matter goes before the Court for the first time. This will be an allocation hearing before the Court Registrar who will determine how the matter should proceed from then. The change in the District Court process coincides with the expansion of the Disputes Tribunal’s jurisdiction up to $20,000 by agreement or $15,000 otherwise. If the claim is within this range the Registrar can allocate it to the Disputes Tribunal. Otherwise, the Registrar has two choices. They can allocate the matter to a Short Trial, or to a Judicial Settlement Conference (“JSC”).

A party can request a short trial, and the other party may object. If so it is a matter for the Court to decide whether a short trial is appropriate. A Short Trial is an option where each side only has a few witnesses and very few or no documents. Strict time limits are enforced in relation to examination in chief, cross examination, and re-examination of witnesses. Submissions are also limited to 30 minutes. This will only be suitable where the dispute is extremely simple, in particular where it is a matter of deciding between two witnesses’ versions of events. Other than Default Judgment, this is the quickest way of resolving District Court litigation under the new rules. If you have a matter that may be suitable for a short trial, you need to take care from the start that you do not overcomplicate the matter by having an excessively detailed Notice of Claim, or filing documents in your information capsule that may not be directly relevant, or which might confuse the issue. This is another area where good legal advice is essential. If the matter is not suitable for a Short Trial it must go to a JSC.

JSC’s

A Judicial Settlement Conference is essentially a mediation held in front of a Judge. It has a time limit of 90 minutes. In this time the parties must present their opposing view points to each other and to the Judge, and attempt to settle the dispute. There is no obligation to settle if the parties cannot reach an agreement. The Judge will not make a formal binding determination of the matter unless the parties agree and consent to this. JSC’s are an option under the current rules, but after 1 November will be mandatory (except where a matter is sent to the Disputes Tribunal or a Short Trial). At the JSC the Judge has the option of ordering that a matter be discontinued if this is in the interests of Justice. This is likely to be the fate of obviously meritless cases.

Hearings

If the JSC is unsuccessful in reaching an agreed conclusion, the matter is allocated to a hearing. There are three options for this. The first option is a Simplified Trial. This is an option in between the current District Court trial process and the new Short Trial process, where the hearing would not be drawn out. It would apply to simpler cases, and there would be an obligation on everyone involved to restrict the time that the hearing took.

The second option is Summary Judgment. Under the current rules Summary Judgment is applied for from the very start of the process, and is often used as a shortcut to Judgment. Under the new rules it is only available after the JSC. Summary Judgment is available where one party claims that the other party cannot possibly succeed. This is quite a high test to meet, and it is likely that a massive number of cases that would currently go to Summary Judgment would be allocated to a Simplified Trial under the new rules.

The third option is a full District Court trial. This would be run in much the same way as the current District Court trial is run, with no time limits, or limits on the number of witnesses (providing that they have relevant evidence to give). The District Court full trial process will be run according to the High Court rules. This would include the rules relating to discovery and any other pre-trial applications which have previously been available to District and High Court litigants.

While the change in the rules is aimed at making it easier and cheaper to start a proceeding in the District Court, lawyers will still have an important role. The District Court is still a place of law and of procedure, and while it is now more accessible, it is, in our view, more important than ever to work with a lawyer early on to isolate key documents and elements of the claim (or defence). We can help you fully understand the legal issues surrounding your case, and the procedural expectations that are put on you by the rules. If you take matters into your own hands, there are a number of ways that proceedings could go terminally wrong, either as the plaintiff or defendant.