Cabinet approves concept to introduce “SMALL CLAIMS COURT” in Sri Lanka

Cabinet approves concept to introduce “SMALL CLAIMS COURT” in Sri Lanka

The Cabinet of Ministers on 14th June 2021 has in principle approved the concept of a SMALL CLAIMS COURT which has been proposed by the Justice Minister, M.U.M. Ali Sabry PC.

The Small Claims Court is a novel Court, proposed to be set up and expanded throughout the Island to hear and determine disputes below the sum of Rs. 1.5 Million.

The Committee appointed in October last year, by the Minister of Justice to explore the possibility of establishing a Small Claims Court in Sri Lanka, comprised of Justice Dr. Ruwan Fernando – Judge of the Court of Appeal (Chairman), and Mr. Nishan Sydney Premathiratne, Attorney-at-Law as the Convener. The other distinguished members of the Committee comprised of Hon. Justice Mayadunne Corea – Judge of the Court of Appeal, Hon. High Court Judge, Lakmal Wickramasooriya, Hon. High Court Judge, R. L. Godawela, Hon. District Judge, Aruna Aluthge, Hon. District Judge, Chandani Dias, Mr. Kaushalya Nawarathna, Attorney-at-Law, Mr. Milinda Pathirana, Attorney-at-Law, Mr. Chandima Muthukumarana, Attorney-at-Law, Mr. Lasitha Kanuwanaarachchi, Attorney-at-Law, Mr. Rasika Dissanayake, Attorney-at-Law, Mr. Ruwantha Cooray, Attorney-at-Law, Mr. Nuwan de Alwis, Attorney-at-Law, and Mrs. Ruwanadini Kuruppu – Assistant Secretary (Legal), Ministry of Justice along with the research assistants: Mr. Vikum Jayasinghe, Attorney-at-Law, Mr. Sajana de Zoysa and Miss Narthana Wevita.

The Small Claims Court, which has been proposed by the Committee is to be empowered to hear and determine matters in respect of inter alia liquid claims, recovery of money, movable property and delictual claims below the threshold sum of Rs. 1.5 Million.

A maximum time limit of 18 months is given to the proposed Small Claims Court to conclude a matter and a further time limit of 1 year has been proposed for the Civil Appeal Court to conclude final appeals from the Small Claims Court.

The Convener of the Committee, Mr. Nishan Premathiratne was of the view that the implementation of the Small Claims Court would benefit the entire country at large as it would help to reduce the backlog of cases in the District Courts and reduce delays in the overall legal system. The Justice Ministry intends to setup these Court Houses with additional carder of Judges being recruited. Mr. Premathiratne, was also of the view that the Small Claims Court would also be an integral part of Sri Lanka’s overall ranking in the World Bank Doing Business Index especially in respect of Enforcement of Contracts, as disputes which are to be construed to be below Rs. 1.5 Million are a pivotal factor in ascertaining the time taken to enforce a contract as per the World Bank. Specifically, when the Small Claims Court Act has attempted to limit the time period to hear and determine a matter within 18 months from its commencement, and if such restriction can be strictly adhered to, it would entail Sri Lanka’s overall standing in the Doing Business Index being elevated from Sri Lanka’s present rank of #164. Presently the rank is a reflection of the time taken to resolve a dispute in respect of a contract which as estimated by the Doing Business Index to be taking over 1,300 days.

The Committee, which drafted on this Act for an extended period of time, presented the Committee’s Report with the draft Small Claims Court Act along with proposed amendments to the Judicature Act to the Honourable Minister on the 30th of April 2021. The Ministry has obtained observations from stakeholders including the Bar Association of Sri Lankan which are to be considered by the Committee prior to the Act being submitted to the Legal Draftsman’s Department by the Justice Ministry.