Price check

The court system needs to address the high costs of lower-end commercial
disputes if it wants to service the business community effectively.

Price checkThe ;Commercial ;Court’s long trial working party ­recommendations and the development of the business courts at the Rolls Building would ­suggest a bright future for the courts.

Despite these positive moves for the ­modernisation of the court process, ­concerns remain about the ability of these and other courts to respond to the needs of the business community, particularly in lower value commercial disputes.

According to reports, Lord Justice ­Leveson, the Senior Presiding Judge for England and Wales, has written to judges and ­magistrates indicating that there is a severe cash crisis in the justice system and a £90m shortfall in the budget over a three-year period.

According to reports, the judiciary has been warned that no part of the court ­system will be protected from having to find savings. Already practitioners complain of the level of service available at county courts and despite the best efforts of those ­working at the courts, the position appears to be about to get worse.

It is the natural order that any problems felt in the criminal justice system will find their way almost immediately into the civil justice system. The High Court is, of course, not immune to these budget strictures, ­particularly ­outside the Royal Courts of ­Justice.

The budget problem, however, is only one of the issues surrounding the way that the courts service the business community. While the Commercial Court deals with high-value and technical claims, the Chancery Division covers ordinary business disputes of relatively modest value. The problem remains that the costs of ­pursuit and the potential ­liability for adverse costs can make the process uneconomic and thereby access to justice for the business community can be severely restricted.

The business community is calling out for a process that is effective and efficient in resolving disputes. The Master of the Rolls recently addressed this issue by proposing the appointment of a Senior Lord Justice to conduct an inquiry into the whole issue of the costs of litigation. Although this is to be welcomed, the process needs to be ­undertaken on a collaborative basis to examine the causes of the high costs of lower value litigation in front of the business courts.

The Commercial Court itself may have pointed the way in the working party report. It has examined again the procedure for the litigation process and has proposed ­sensible changes in the approach to ­pleadings, disclosure and witness statements.

As with the Commercial Court generally, however, the changes depend on a hands-on approach by the judge to an individual piece of litigation. This attention is not necessarily available in the Chancery Division and certainly wholly unavailable in the courts outside the Royal Courts of Justice.

Lord Woolf sought to address some of these costs issues in his ‘Interim and Final Report’ and then translate them into the Civil Procedure Rules. It would be fair to say that most would acknowledge that the one failing of the post-1999 system has been in relation to costs.

Lord Woolf envisioned that the court would be able to take a hands-on approach to the process. The judge dealing with the matter would determine how the process should be managed and what was necessary to bring it to trial. In the event, as became clear quite quickly after the introduction of the reforms, the resources were simply not available to allow judges to take that hands-on approach. The budget warnings from Lord Justice Leveson drive home the fact that those resources are unlikely ever to be available.

Despite the differing resources, the ­Commercial Court has thrown down a ­challenge to the other courts dealing with commercial disputes to try to establish a process that is cost-effective and allows the business community access to the court process. While the Commercial Court may want to maintain its distinctive nature, it seems ­sensible that all of the courts dealing with commercial disputes should follow a procedure that really addresses the cost issues.

If the courts and the profession are to serve the business community, they have to address the issues of procedure to examine the ­incidence of costs and how that ­procedure can be honed for all claims. The business courts must marry up the need to ensure a just resolution with a process that is cost-effective for all levels of business ­disputes.

David Greene is president of the London Solicitors Litigation Association and a partner at Edwin Coe