Archive for the ‘Chapter 8’ Category
More fixed costs in civil litigation?
Lord Justice Jackson is indefatigable. He has not abandoned the issue of the cost of litigation on which he produced a major report at the end of 2009. Since then the Government has taken steps to implement some of Jackson’s proposals. But in his opinion, these have not yet gone far enough. So he has taken a recent opportunity to argue that now is the time for much greater use of fixed costs in the course of litigation.
He set out his views in a lecture delivered in January 2016. You can read the lecture at https://www.judiciary.gov.uk/wp-content/uploads/2016/01/fixedcostslecture-1.pdf
It is not yet known how far the Government is likely to take his proposals, but with the ferment of reforms currently surrounding the civil justice system (among others) it is reasonable to suppose that at least some further extension of fixed costs will be introduced in the not too distant future.
Regulation of Claims Management Companies
One of the documents published with papers relating to the March 2016 Budget statement was a report of an independent review of Claims Management Companies (CMCs). Unusually, CMCs are regulated by a dedicated Unit which operates within the Ministry of Justice, rather than by a body more independent of a government department.
The review offers three options for the way forward: 1, creating a wholly now external regulator; 2, leaving things within the Ministry of Justice, while building on the reform programme currently being developed by the Unit; or 3, transferring the function to the Financial Conduct Authority.
The review concluded that the first option would be unlikely to be approved by Government, as it would be too expensive and disruptive. The second option would be the least disruptive to the market; option 3 would permit a new, refreshed approach.
The Government has now announced that it will transfer this function to the FCA – but as this will require legislation to achieve, it is unlikely to take place before 2018.
Details of the review are at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508160/PU1918_claims_management_regulation_review_final.pdf
Court closures: the details
In July 2015, the Government launched a consultation on closing under used courts. 91 possible buildings were earmarked for possible closure. (See this blog 26 July 2015)
We know that reduction of the court estate is a key component needed to fund the investment needed to modernise the court estate. (See this blog 3o Nov 2015).
The Government has now announced the buildings that are to be closed – together with an indicative timetable showing that the closure programme will run over 2 years.
In the end only 64 of the sites originally identified will close as proposed. A further 22 closures will take place, but modified from the original proposals. 5 escape the axe altogether.
The details can be found at https://www.gov.uk/government/consultations/proposal-on-the-provision-of-court-and-tribunal-estate-in-england-and-wales
Opening up the Court of Protection
On 29th January 2016, a pilot scheme was launched designed to give greater publicity to the work of the Court of Protection.
This is a specialist Court which makes decisions about the personal welfare (e.g. medical treatment) and the property and affairs of persons who lack capacity to make them themselves, applying a best interests test. The Court of Protection’s main base is in London but it also sits throughout England and Wales.
The Court of Protection was established by the Mental Capacity Act 2005. It is responsible for:
- deciding whether someone has the mental capacity to make a particular decision for themselves
- appointing deputies to make ongoing decisions for people who lack mental capacity
- giving people permission to make one-off decisions on behalf of someone else who lacks mental capacity
- handling urgent or emergency applications where a decision must be made on behalf of someone else without delay
- making decisions about a lasting power of attorney or enduring power of attorney and considering any objections to their registration.
- considering applications to make statutory wills or gifts
- making decisions about when someone can be deprived of their liberty under the Mental Capacity Act.
It deals with about 25,000 applications under the Act each year. A high percentage of applications relating to property and affairs are not disputed and they are dealt with on paper without a hearing.
A new Pilot Practice Direction will apply to new proceedings issued from 29 January 2016. The Practice Direction effectively changes the default position from one where hearing are held in private to one where hearings are held in public with reporting restrictions to protect identities. This means that when an order has been made under the pilot, both the media and the public will be able to attend, unless a further order has been made which excludes them.
The work of the Court has not been totally hidden from public view.
- Court of Protection judgments have been routinely published since 2010.
- Serious medical cases (such as a decision to stop life support) are held in public, with the identities of those concerned kept anonymous.
- Committal hearings where a custodial sentence is imposed are also held in public.
Her Majesty’s Courts and Tribunals Service (HMCTS) is also amending the way in which court lists are displayed, so that they provide a short descriptor of what the case is about, allowing the media and members of the public to make an informed decision on whether to attend the hearing. Lists will be published on a weekly basis in court buildings and online at www.courtserve.net.
This follows on from the development of practice in the Family Court where, for the last 6 years, accredited media have been able to report on proceedings. It is accepted that many will want these proceedings to be private; the pilot is designed to provide evidence about how the balance between publicity and privacy might be improved.
For further information see https://www.judiciary.gov.uk/announcements/court-of-protection-prepares-to-open-up/
Civil Courts Structure Review: Interim Report
Lord Justice Briggs has been asked to undertake an urgent review of the structure of the civil courts, to accompany the court reform programme currently being undertaken by the Ministry of Justice. He has recently (12 Jan 2016) published an interim report.
It is clearly work in progress, in that it poses rather more questions than makes provisional recommendations as to what changes should be made. However, the following key issues are identified:
Urgent Priorities
- Prepare the civil judiciary to play their part in the management of the HMCTS reforms from April 2016, including Judicial College training and staff to support the leadership judges.
- As soon as possible design the structure and software which will be needed for the re-organised courts, particularly the Online Court.
- Ease the burden on the Court of Appeal.
On on-line Courts, his provisional view is that
- There is a clear and pressing need to create an Online Court for claims up to £25,000 designed for the first time to give litigants effective access to justice without having to incur the disproportionate cost of using lawyers.
- There will be three stages: Stage 1- a largely automated, inter-active online process for the identification of the issues and the provision of documentary evidence; Stage 2 – conciliation and case management, by case officers; Stage 3 resolution by judges.
- The court will use documents on screen, telephone, video or face to face meetings to meet the needs of each case.
He raises a number of further questions, e.g. whether the on-line court should use the current Civil Procedure Rules, or work to new bespoke rules.
On the role of Case Officers, his provisional view is that some of the existing judges’ more routine and non-contentious work should be transferred to Case Officers supervised by judges. Parties should have the right to have a Case Officer’s decision reconsidered by a judge.
He then asks questions about how case officers should undertake their work: by mediating? or by written early neutral evaluation? He also asks what qualifications case officers should have.
He wants to see more civil work being dealt with in the regions outside London, and the development of expertise in dealing with civil cases in more centres outside London.
These issues are summarised in the Press Release, available at https://www.judiciary.gov.uk/civil-courts-structure-review/civil-courts-structure-review-ccsr-interim-report-published/press-summary-of-the-ccsr-interim-report-from-lord-justice-briggs/
The full report is downloadable through links at that page.
Interesting footnote: In line with his on-line vision for the Courts, Lord Justice Briggs is refusing to accept any written submissions on paper – all comments and ideas have to be submitted on-line.
Public expenditure review: impact on the Justice system (2): the future of personal injuries litigation
A totally unexpected announcement in the 2015 Autumn Statement relates to how personal injuries cases are to be dealt with in future. The statement says (at p 125):
3.103 Motor insurance – The government will bring forward measures to reduce the excessive costs arising from unnecessary whiplash claims, and expects average savings of £40 to £50 per motor insurance policy to be passed onto customers, including by:
••removing the right to general damages for minor soft tissue injuries (Claimants will still be entitled to claim for ‘special damages’, including treatment for any injury if required and any loss of earnings);
••removing legal costs by transferring personal injury claims of up to £5,000 to the small claims court.
This announcement has caused consternation amongst PI claimant lawyers since, by moving many more cases into the small claims track, they will not be able to claim their costs from the insurers when they win. This will result in many claimant lawyers giving up this type of work.
Two consequences seem likely to follow:
First, insurers will be able to put more pressure on claimants to settle on terms dictated by the insurers.
Second, claims management companies may well try to find ways to move in to this work.
Despite the fact that many claimants may end up with a lower level of damages than they might have done had they been represented by a lawyer, many will think that the estimated reduction in insurance premia is a price worth paying to ensure that the costs of small claims are more proportionate than they currently are.
There might, however, be another way of looking at the issue.
In Ireland, the Injuries Board – established by Act of Parliament in 2003 – can deal with all personal injury claims on line. The injured party submits details of the accident and the injury; the insurer makes an offer; and this is assessed by an independent assessor with practical experience of PI and familiar with current trends on the awards of damages by the courts.
There is no compulsion to use the system, but it is free to claimants who win their case, and the services costs much less for the insurers (though still makes an annual surplus).
An analogous scheme already operates in the UK for dealing with tenancy deposit disputes.
The full statement is downloadable at https://www.gov.uk/government/publications/spending-review-and-autumn-statement-2015-documents.
For the Irish Injuries Board, go to http://www.injuriesboard.ie/eng/
Public spending review: impact on the Justice system (1): Court closures and investment in IT
The long awaited announcement that there would be significant investment in prisons and also in the IT infrastructure for the Courts and Tribunals service, paid for by selling existing old prisons and little used court buildings, was made by the Chancellor of the Excehquer in the Autumn Statement and Spending Review, announced on 25 November 2015.
More specifically, the Ministry of Justice website notes:
On prisons
£1.3 billion will be invested to reform and modernise the prison estate to make it even more efficient, safer and focused on supporting prisoner rehabilitation. The government will build 9 new, modern prisons – 5 of which will open this Parliament – with better education facilities and other rehabilitative services, while selling ageing, inefficient prisons on prime real estate to free up land for new homes.
By investing in the prison estate, the government will reduce running costs in prisons by £80 million a year when the reforms are complete. New investment will also fund video conference centres, allowing up to 90,000 cases to be heard from prison instead of court, and will deliver more safety improvements in prisons, including body scanners and mobile phone blocking technology.
The Government states its hope that these reforms will reduce reoffending through more effective rehabilitation, and will reduce the cost of transporting prisoners between courts and prisons, stamp out the organisation of crime from within prisons, and stem the availability of drugs and other illicit substances.
The Government also states that these developments will build on the probation reforms undertaken in the last Parliament, which will reduce the costs of the system and reinvest them into extending probation support to 45,000 short-sentence offenders for the first time, to tackle reoffending.
On courts and tribunals
Over £700 million will be invested to fully digitise the courts and create a more modern estate. This will generate savings to the taxpayer of approximately £200 million a year from 2019-20. The government will also look at changes to court fees as it continues to put the courts on a more sustainable financial footing.
The text of the statement and other documents may be accessed at https://www.gov.uk/government/topical-events/autumn-statement-and-spending-review-2015
The impact on the Ministry of Justice is at https://www.gov.uk/government/news/ministry-of-justices-settlement-at-the-spending-review-2015
The financial list – recent developments
On 1 August 2015, I noted the decision to create a new financial list and set out a diagram explaining how this would operate in the High Court.
In October 2015, further guidance on the financial list was published, and a formal event to launch the new list was held on 21 October 2015.
It will be overseen by the Chancellor of the Chancery Division and the Judge in charge of the Commercial Court of the Queens Bench Division. Cases will be heard in the Rolls Building in London.
This is an important strategic move by the judiciary, in collaboration with those groups of the legal profession who deal with these major financial cases, to try to ensure that London remains the litigation forum of choice for these kinds of cases.
One of the interesting points that was made at the time of the launch was the extent to which judicial decisions emanating from these arrangements will (or will not) align with rulings from Financial Regulators.
To read the guide, go to https://www.gov.uk/government/publications/financial-list-guide
To read some remarks of the Lord Chief Justice on the launch of the list go to https://www.judiciary.gov.uk/announcements/financial-list-press-release/
Housing disputes – court or tribunal? Civil Justice council review
The Civil Justice Council has asked Judge Siobhan McGrath to take another look at the best ways for resolving housing disputes. This will follow up work done some years ago by the Law Commission. The Commission argued that a wider range of issues could go to what was then known as the Residential Tenancies Property Tribunal.
Since then there have been at least two relevant and significant developments. First, disputes relating to disputed tenancy deposits are mostly determined by alternative dispute resolution procedures created by the introduction of Tenancy deposit Protection.
Secondly, in Scotland there are proposals for establishing a specialist housing tribunal. (There is also a specialist Residential Tenancy Board in Ireland).
The outcome of the review is expected early in 2016.
For further information go to https://www.judiciary.gov.uk/related-offices-and-bodies/advisory-bodies/cjc/working-parties/working-group-on-property-disputes/
Protecting Intellectual property rights: the Intellectual Property Enterprise Court
The UK economy depends heavily on innovation – in products, design, brands. All these key economic activities are underpinned by intellectual property rights. It is essential that those who create, research and design new things and ideas are able to protect the intellectual property they have created.
There is a lot of law which is designed to do just that. But the effect of the law is undermined if those who want to assert their intellectual property rights against those who want to deny them their rights cannot do so effectively.
Of course the traditional forum for the assertion of such rights is the Court. But as is well known, going to court is an extremely expensive business. Individuals and small and medium businesses may just not be able to afford to litigate, however meritorious their case and however unmeritorious their opponents might be.
Some years ago, a first attempt to make some forms of IP litigation more affordable was put in place with the introduction in 1990 of the Patents County Court (PCC). It had a ‘special jurisdiction’ to hear proceedings related to patents and registered designs, and the ‘ordinary jurisdiction’of a County Court to hear tortious actions, such as copyright infringement, trade mark infringement, and passing off claims (though initially not all IP matters, such as certain trade mark and designs issues),
But it never worked particularly effectively and did not attract much business.In particular, the PCC was perceived as featuring a number of major ‘procedural shortcomings’ which affected its ability to hear low value claims:
- The PCC ‘lacked any mechanisms for controlling what parties filed in a case or for keeping cases moving’
- The PCC lacked the ability to place limits on the value of a case brought before it.
- From 1999 onwards, the Civil Procedure Rules applied equally to the PCC and the High Court.
The cumulative effect of these three shortcomings was that litigation could be undertaken at the PCC and the High Court with the same procedures and at the same price. This was perceived as blurring the lines between the types of cases heard at the PCC and the High Court which did little to encourage SMEs to enforce their IP rights at the court.
- Procedural change,with the introduction of active case management (ACM), early identification of the issues by the judge,and a limit on the time to be taken at trial;
- Cap on recoverable costs: set at £50,000;
- Cap of £500,000 damages recoverable in cases before the PCC;
- The introduction of a small claims track to hear copyright, trade marks and passing off, databases, breach of confidence, and unregistered designs matters, but not cases concerning patents, registered designs and plant variety rights.
Finally, in October 2013, the Intellectual Property Enterprise court (IPEC) was created as a specialist court operating within the Chancery Division of the High Court of England and Wales. In accordance with CPR part 63 and Practice Direction (PD) 63 the IPEC can hear cases concerning patents, designs (registered/unregistered, UK/Community), trade marks (UK/Community),passing off, copyright, database right, other rights conferred by the Copyright Designs and Patents Act 1988 and actions for breach of confidence. It took over the work of the Patents County Court, which was abolished.
A recent research report suggests that these changes – particular on the control of costs and the increase in case management – have been effective in encouraging more SMEs to bring cases to the IPEC and have also increased the willingness of parties to proceedings to negotiate settlements to their disputes.
The researchers found:
the cumulative effect of the IPEC reforms 2010-2013 has been highly significant – in addition to an increase in the numbers of filed cases at the IPEC, the creation of the streamlined IPEC MT and SCT for litigating disputes has led to an overall increase in the amount of IP disputes that occur more generally i.e. pre-filing. In otherwords, now that IP holders have the ability to utilize the IPEC – a litigation forum that caps costs and damages, and makes use of ACM (and includes the SCT option) – IP holders are more confident about entering into disputes with potential infringers, where previously they would have not felt confident enough to do so.
Martin Partington: Introduction to the English Legal System 15th ed 2021
Oxford University Press Learning Link Resources
Martin Partington: Spotlight on the Justice System 