investment going ahead, Raymond Cox and Patrick Goodall examine the changing role of
It has been two years since the Civil Procedure Rules (CPR) came into effect on 26 April 1999. In March 2001, the Lord Chancellor's Department published 'Civil Justice
Reform Evaluation: Emerging Findings' (the LCD report), which sets out an early evaluation of the CPR. When read in conjunction with the 'Report on the Commercial Court – End of Year Statement, 30 September 2000', a number of interesting conclusions can be drawn on the CPR at this infant stage and, more particularly, its impact on the work and the operation of the Civil Justice Reforms in the Commercial Court.
The first, and perhaps most important, point to note is the decline in the number of claims issued. Even before the CPR were introduced, the number of writs issued in the Queen's Bench Division (QBD) and Chancery Division had been in substantial decline. In 1993-94, more than 50,000 writs were issued in the QBD. By 1997-98, that figure was some 22,500, and by 1998-99 that figure had fallen by a further 5.5 per cent to just over 21,000. The LCD report confirms that there has been a significant “step change” decline in the number of claims issued in the QBD, with no signs of the pre-CPR level of claims returning.
The Commercial Court has not escaped this decline. As highlighted by Mr Justice Rix in the 'Report on the Commercial Court – End of Year Statement 30 September 1999', in the five months from May to September 1999, 565 new cases were commenced in the Commercial Court against 768 in the corresponding months of 1998, a decline of 26 per cent. Indeed, as detailed by Mr Justice Longmore (now Lord Justice) in the 2000 report on the Commercial Court that decline has continued. In the 12 months ending 31 July 1999, 1,808 claims were issued in the Commercial Court, whereas for the year ending 31 July 2000, that figure was only 1,160, a decline of almost 36 per cent.
As suggested in the LCD report, the decline in new claims is likely to be as a result of the fact that the emphasis in the CPR is on pre-claim form work, such as complying with the pre-action protocols. However, if that were the sole explanation, one would expect to have seen the level of claims rise to its pre-CPR level, which as yet has just not happened. Alternative dispute resolution (ADR) may also have caused some claimants not to fire off a claim form when they might otherwise have done so, or to have settled claims at an early stage. That is particularly the case given that, according to Judge Longmore, there is no doubt that the introduction of the CPR “has increased the cost at the initial stages of a case for all cases”, and that “overall, the rules have increased the cost of litigation”; likewise, the LCD report recognises that the CPR have resulted in the frontloading of costs. Alternatively, it may just be that, as Judge Longmore recognises, there is “a greater reluctance to litigate under the new rules”. At this infant stage of the CPR, it is probably too early to draw any definitive conclusions and it may be that the decline is only temporary.
“The Civil Procedure Rules have increased the cost at the initial stages of a case for all cases”
Lord Justice Longmore
In line with the fall in the number of claims being issued, there has also been a drop in the number of applications issued in the Commercial Court. In the five months from May to September 1999, 553 applications were issued in the Commercial Court against 808 in the corresponding months of 1998, a decline of 32 per cent. Likewise, in the 12 months ending 31 July 1999, 2,044 applications were issued in the Commercial Court, whereas for the year ending 31 July 2000, that figure was only 1,563, a decline of almost 24 per cent (although such applications have taken comparable judge time). While it may be that such a drop can be explained away as a result of the parties taking the overriding objective and spirit of cooperation to heart, with the result that more issues are agreed between them with a view to saving both costs and time, a much more likely explanation is that, as Judge Longmore recognises, applications now tend to be addressed at the Case Management Conference (CMC) rather than at standalone hearings. Moreover, the court usually makes a summary assessment of costs – which have to be paid within 14 days – for applications outside the CMC, whereas the usual order at the CMC will be costs in the case.
While the summary assessment of costs procedure was originally limited to short interlocutory hearings that did not exceed one day (Practice Direction (Costs: Summary Assessment)  1 WLR 420), under the CPR the court can make a summary assessment of costs in any case, although the general rule is that the court should make such an order at the conclusion of any hearing that has lasted less than one day. The Commercial Court has embraced the procedure with much enthusiasm. However, there is generally not the time or the material available before the court for any kind of thorough examination of the costs that have been incurred, although they may often be very substantial. Judges may reduce claims by, say, 50 per cent or not at all on very little information and without giving reasons. The LCD report recognises that the summary assessment of costs has provoked controversy, but asserts that “it is likely that this will decrease over time as judges and practitioners become more familiar with the new rules”.
With regards to ADR, it is certainly on the increase in the Commercial Court and, as Judge Longmore states, it is “an important feature of the court”. According to the LCD report, more than 130 ADR orders were made in the Commercial Court between 26 April 1999 and June 2000 compared with 43 in the preceding 12 months. Likewise, since the introduction of the CPR, the Centre for Dispute Resolution (Cedr) has recorded a 141 per cent increase in the number of commercial mediations. A review of the ADR scheme in the Commercial Court has recently been undertaken by Professor Hazel Genn, and her report is due to be published shortly.
In the same vein, according to the LCD report, there is evidence that there are now fewer settlements at the door of the court and that settlements before the hearing day have increased. That is partially consistent with the data available for the Commercial Court: in the year ending 31 July 2000, 155 cases were given dates for trial within the year, of which 86 were settled or adjourned by the parties; whereas for the previous 12 months, the corresponding figures were 113 and 19 respectively. In contrast to trials, far fewer applications settled than in previous years in the Commercial Court: of the 1,563 applications issued in the 12 months ending 31 July 2000, 1,325 were heard, whereas in the previous 12 months the corresponding figures were 2,044 and 1,355 respectively.
Therefore, although in a number of respects the Commercial Court is in line with the findings contained in the LCD report, there is divergence in two important areas. First, the LCD report concludes that the use of single joint experts appears to have worked well, with 36 per cent of trials in 2000 involving expert evidence, but with only 22 per
cent involving expert witnesses instructed by one party. In contrast, in accordance with paragraph H2.4 of the 'Commercial Court Guide', the use of single joint experts in the Commercial Court is extremely limited, if not non-existent. Secondly, according to the LCD report, while the time between issue and hearing for those cases that go to trial has fallen, in the Commercial Court the story is different – lead times have extended. For the 12 months ending 31 July 2000, the lead times for hearings lasting half a day, one to two days, one week, and two weeks and upwards were three months, four to five months, six months and 12 months respectively. In the previous 12 months, the corresponding times were two months, three to four months and eight months respectively. This discrepancy can be explained on the basis that, unlike in other courts and divisions, in the Commercial Court the judges do all their own interlocutory work and, as stated by Judge Longmore, “the appearance on the procedural scene of case management conferences in every case has required the expenditure of much judicial labour in the handling of these conferences and subsequent management of cases before trial”; in short, “judges now have to give more time to managing and therefore less time to trying cases”.
Another point to note from the last 12 months is the publication by the Lord Chancellor's Department of the 'Commercial Court Feasibility Study'. That study, undertaken by Cap Gemini Ernst & Young, explored whether a compelling business case could be made for the establishment of a new Commercial Court, which would encompass work currently undertaken by the Commercial, Admiralty, Patents and Technology and Construction Courts. Having considered four options – a new building, a new building plus IT investment, an integrated dispute resolution centre and a legal services electronic hub – the study concluded that the second of these was the most favourable. Therefore, the proposal is that there will be an integration of the work of a number of courts, with a consolidation of accommodation and a significant investment in IT (in accordance with the Court Service's consultation paper, entitled 'Modernising the Civil Courts' and published in January 2001). On 26 March 2001, the Lord Chancellor, Lord Irvine announced that he accepted such a proposal and that he would “take forward plans to enhance the court with modern IT and videoconferencing systems in a building close to, or in, the Royal Courts of Justice”, and that he would “examine the potential to house the Commercial, Admiralty, Patents and Technology and Construction Courts in a single building”. However, the Lord Chancellor does not appear to accept that there should be any change in the way in which the courts are currently funded. As for the next 12 months, the most important feature of the Commercial Court's civil procedure will be the introduction of a new rule and practice direction, specifically addressing commercial claims. Although such a change is intended to bring the Commercial Court's procedure more in line with Lord Woolf's original intention of removing unnecessary distinctions of practice and procedure between different courts and divisions, it seems likely that in many important respects, the Commercial Court will be able to justify departures from the CPR, which will be embodied in the new rule and practice direction with the resulting downgrading of the 'Commercial Court Guide'.
Raymond Cox and Patrick Goodall are barristers at Fountain Court Chambers
|A recent case has provided a striking example of a court imposing a Draconian penalty on a party for delay in serving its witness statements, disallowing that party from calling any evidence at trial.
Under the Civil Procedure Rules (CPR) Part 32.10 if a witness statement for use at trial is not served in respect of an intended witness within the court's specified time, the witness may not be called to give oral evidence unless the court gives permission. Part 32.10 is a sanction within CPR Part 3.8, under which, where a party has failed to comply with a rule, any sanction for failure to comply imposed by the rule has effect unless the party in default applies for and obtains relief from the sanction.
It is for the applicant to satisfy the court, supported by evidence, that relief from the sanction should be granted (CPR Part 3.9(2)). When hearing an application for relief from sanctions, the court is required to consider all the circumstances, including the matters set out in Part 3.9.
In Mealey Horgan plc v Timothy Horgan, Mr Justice Buckley said that it would be only in “fairly extreme circumstances” that the court would exclude a party from adducing evidence at trial, and so deal with a case in effect on one side's evidence only. A recent decision provides perhaps the first example of the court refusing to grant any relief under Part 32.10. In Coombes v Georgiades, the defendant had been directed to serve his witness statements by 10 November 2000. However, he failed to do so until 4 April 2001, two weeks before the trial date.
A week before trial, the defendant applied under CPR Part 32.10 for permission to call witnesses to give oral evidence at trial. The district judge dismissed his application, after considering individually each of the matters set out in CPR Part 3.9. In particular, he found: the application for relief had not been made promptly; the failure to comply was intentional; there was no good explanation for the failure; the failure to comply was caused by Mr Georgiades himself; the trial date could not still be met if relief was granted; the late service of Georgiades' statements had a prejudicial effect on the claimants; and the granting of relief would prejudice the claimants.
The defendant's appeal against that order was heard by Mr Justice Crane the day before trial. After satisfying himself that the trial date could not be met if an edited version of the witness statements was prepared, he dismissed the appeal.
This decision will please those who argue that for the change in the CPR to be effective, it must be reflected in a change of mind-frame of the judiciary to the need for strict compliance; there is no scope for any presumption that apparently Draconian provisions should be interpreted narrowly or applied sparingly, and the courts must begin as they propose to end, laying down the law and rules of practice which the new system requires, and not be squeamish or promulgate fine distinctions, which will only muddle and confuse the law in years to come. Lawyers, take note.
Daniel Lightman is a barrister practising at Serle Court Chambers. He appeared on behalf of the claimants in both Mealey Horgan plc v Timothy Horgan and Coombes v Georgiades