Practising what’s preached

The Commercial Court in London is seen by many as the flagship of our civil justice system. Parties come from all over the globe to litigate their most complex and valuable commercial disputes there, even in cases that are not governed by English law. Recently the court has been criticised not only for its outdated facilities, but also for a perceived failure to exercise sufficient case management control.

The announcement that the Government has agreed to fund a brand new Business Court in Central London, projected to open in 2010, with state-of-the-art courtrooms and facilities, has gone some way to addressing the first of these criticisms. But what about the second?
The Commercial Court’s reputation has been dented recently by two of the largest and most high-profile civil cases of modern litigation history. Between them BCCI and Equitable Life involved sums totalling £3.6bn. Both came to abrupt ends and in both the Commercial Court was perceived to have allowed the litigation to run away with itself rather than grappling early on with issues that might have resulted in the early termination of weak claims and the saving of immense costs.

While the Commercial Court is renowned for its robust, analytical approach to weighing complex evidence, it simultaneously exposes itself to criticism for overly long trials and poor case management. The heart of the problem lies in the fact that the court’s procedures are attuned to a Rolls-Royce standard of investigation. To survive and flourish the court must ensure that its practices, not just its facilities, reflect the needs of the modern litigant. Right at the top of the list of most litigants’ concerns is costs.

Disclosure was one of the areas of civil litigation most criticised by Lord Woolf in the Access to Justice reports. The Civil Procedure Rules were intended to limit compulsory disclosure of documents to those that really made a difference to the resolution of the dispute. But in practice the approach of the Commercial Court to disclosure has not changed radically.

The issue of electronic disclosure has given further cause for concern. While the trend has been towards limiting disclosure, the developing technology has pushed in the opposite direction. The sheer number of electronic documents generated by even an average-sized business is huge.

Meanwhile, the need to ensure that disclosure is reasonable, proportionate and actually practical means that very often the hunt for electronic documents is carried out by way of limited keyword searches. However carefully keywords are chosen they are bound to bring up numerous documents that have limited bearing on the issues in the litigation. Yet they all still have to be considered.

All of this costs money and, in commercial cases, the costs involved can be very significant. And for what purpose? Usually in the forlorn hope of finding that one smoking gun document that will change everything and that in practice rarely exists.

This cannot be the most efficient way of resolving business to business disputes. In order to tackle the minefield that disclosure has become, we need a radical new approach. In most other European jurisdictions parties disclose only the documents on which they intend to rely. But no one suggests that justice cannot continued #+ continued be achieved in France, Germany or Russia.

While such an approach may superficially offend the UK’s sense of fair play, it is surely better than forcing parties to devote huge resources to a hunt for potentially adverse documents that may long since have been deleted from IT systems and to spend small fortunes on retrieval technology, only to discover that most, if not all, of the documents have no ultimate bearing on the outcome of the dispute.

Provided that the rules are well known and applied consistently, there is no reason why compulsory disclosure should not be limited to specifically identified documents that are absolutely necessary for the determination of an issue.

Witness evidence
The latest issue of the Commercial Court Guide (November 2006) made two significant changes to how witness evidence is dealt with. First, it has restricted the circumstances in which evidence additional to that initially served by the parties may be adduced. Second, it has reclassified expert evidence.

Additional factual evidence will now only be permitted by order of the court. Where an application to admit additional evidence is made late in the day, it will only be permitted in “compelling” circumstances. No doubt this provision is intended to reduce the amount of extra witness evidence as proceedings progress. However, it may have the opposite effect, encouraging parties to overdo the written witness evidence at the outset for fear of being precluded from supplementing it later, giving rise to yet further frontloading of costs and additional waste.

The second change introduced by the guide is the requirement that expert evidence should be split between that which is factual and that which is opinion. Factual evidence, including that from experts, must now all be served at the same time. The expert’s opinion evidence can be served later in an expert’s report.

Again the change is well-intentioned: the guide states that it is “to avoid postponing disclosure of a party’s factual evidence until service of expert reports”. In practice it is likely to lead to increased costs in preparing two documents comprising the evidence of a single witness, without necessarily reducing argument between the experts who will still await service of the report before being in a position to try to narrow the issues.

Justice should not be dispensed on a onesize-fits-all basis. Those responsible for the workings of the UK courts need to bear in mind their target audience. Litigants in the Commercial Court expect the highest levels of expertise and practice. Where procedures lead to increased costs and delay, parties will not feel they are getting value for money and may decide to look elsewhere.

The reputation of the Commercial Court extends far across the litigious world, but it cannot afford to stand still. Investment in the new Business Court is to be applauded, but it must ensure its own procedures and practices are up to the mark.

Mark Humphries is a partner and Jane Larner is litigation managing professional support lawyer at Linklaters