John Airey v Computer Services

Informality in statutory small claims arbitration does not displace the adversarial character of the hearing. The District Judge must allow both parties to present evidence, listen to their arguments, identify the issues, and explain the decision in terms appropriate to the case.

A full transcript is unnecessary, but a general record of the evidence and the issues decided is ordinarily required. Legal issues should be identified because an award may be set aside for error of law. Failure to record the evidence and reasons amounts to misconduct only where it is a serious breach affecting the fairness of the proceedings.

Mr Airey claimed £230 and the return of his laptop after a dispute with Computer Services concerning the installation of replacement hard disks. The claim was referred to statutory small claims arbitration, and the District Judge dismissed it on 12 January 1996 without a written record of the evidence or reasons.

Mr Airey applied to set aside the award, alleging misconduct and failure to hear his case. Deputy Circuit Judge Hammerton dismissed the application on 8 March 1996, treating the matter as a simple issue of fact. The appeal concerned whether the absence of a note, reasons, and identification of legal issues amounted to misconduct under Order 19 of the County Court Rules.

The appeal was allowed unanimously. The circuit judge was wrong to dismiss the application to set aside the award and to conclude that no question of law arose. The original claim was referred to the District Judge for a further hearing.

1. The small claims arbitration procedure is statutory and governed by Order 19 of the County Court Rules. There is no ordinary right of appeal, but an award may be set aside for misconduct by the arbitrator or error of law under rule 8(1).
2. The District Judge, whether sitting as judge or arbitrator, must allow both parties to present evidence, listen and pay attention to their arguments, and give a decision appropriate to the relatively informal but adversarial nature of the hearing. Afzal v Ford Motor Company [1994] 4 All ER 720 established the informal character of the procedure, while Chilton v Saga Holidays plc [1986] 1 All ER 841 confirmed its fundamentally adversarial character.
3. A full transcript is not required. As a general rule, the District Judge should record the general nature of the evidence, and should state the decision by reference to the issues identified. Legal issues should be identified because there is a statutory right to set aside an award for error of law.
4. A failure to record evidence or reasons constitutes misconduct only where it is a serious breach affecting the fairness of the proceedings. The absence of any note, reasons, or identification of the factual and legal issues crossed that threshold. The possible issues included rescission and refund, delivery of the computer, the distinction between a repairer and supplier, and any repairer's lien or storage charges.
5. The costs of the appeal and the hearing before the circuit judge were awarded to Mr Airey. Costs before the District Judge were reserved to that judge.

1. Court of Appeal (Civil Division) — On appeal, the court allowed the appeal, set aside the circuit judge's dismissal of the application, and referred the original claim to the District Judge for a further hearing. Leave to appeal had been granted on 18 April 1997.
2. Brighton County Court — The District Judge dismissed the claim after the small claims arbitration hearing on 12 January 1996. Deputy Circuit Judge Hammerton dismissed the application to set aside the award on 8 March 1996.