Posts Tagged ‘civil litigation’
Review of pre-action protocols in civil litigation – consultation from the Civil Justice Council
When Lord Woolf published his landmark report, Access to Justice, way back in 1996, one of his aims in making his recommendations for changes to civil procedure was to encourage parties contemplating litigation to put their cards on the table. This way, Lord Woolf thought, litigants might be able to come to their own settlement of the issues in dispute between them, rather than incurring the costs of an actual court hearing. Woolf argued that the courts should be the ‘forum of last resort’.
One of the methods for encouraging parties to come to the negotiating table was through the creation of pre-action protocols (PAPs) – steps that should be taken before formal legal proceedings started. Over the years 17 separate pre-action protocols have been developed for different categories of proceeding.
There have, however, been criticisms of PAPs. For example, it was argued that they created additional expense; they caused delay (both things Woolf sought to avoid); they were not effectively enforced by judges.
In October 2020, the Civil Justice Council announced that it was going to review the operation of PAPs.
According to the Press Release issued at the time: “The review will look at all aspects of PAPs including their purpose, whether they are working effectively in practice and what reforms, if any, are required.”
It went on to state that the Civil Justice Council was particularly interested in looking at how PAPs are working for litigants with limited means; the costs associated with PAP compliance; the potential of PAPs in online dispute resolution, and the potential for PAPs to be streamlined.
Although the Civil Justice Council did set out provisional Terms of Reference for their inquiry, it also said that the focus of the review was not closed. As a first step, the CJC decided to conduct a preliminary survey to obtain feedback and suggestions about what ought to be the focus of the review, and the priorities for reform. This was started in October 2020, and ran until December 2020.
The announcement of the review is at https://www.judiciary.uk/announcements/civil-justice-council-launches-review-of-pre-action-protocols/
The results of the initial survey are awaited.
How to develop the use of Alternative Dispute Resolution – Civil Justice Council report
In December 2018, the Civil Justice Council (CJC) endorsed a report from a Working Group chaired by William Wood QC on how the use of ADR might be further encouraged.
The report concludes that it does not currently think that the use of ADR should be made compulsory – a conclusion that some will find disappointing. But the Working Party argues that there is still work to be done to prepare the ground for the possible introduction of compulsion at some future date.
There are three general matters which the Working Party argues should form the basis for a strategy for the development of ADR:
- The awareness of ADR, both in the general public and in the professions and on the Bench;
- The availability of ADR, both in terms of funding and logistics and in terms of quality and regulation of the professionals involved;
- The encouragement of ADR by the Government and Courts.
These are very similar to the issues which the ADR Sub-Committee of the CJC (which I used to chair) identified over 10 years ago.
But the latest report adopts a positive attitude arguing that
- Citizens must be aware that when civil disputes arise there are alternatives to the present choice of capitulation or litigation.
- Citizens must be aware that those alternatives include approaches involving neutral third parties to assist settlement.
- Those neutrals must be available in a practical and affordable form and operate in accordance with transparent standards of practice such that there is confidence in their training, their competence and their integrity.
- Far from being a sign of weakness the use of and the offer of the use of such techniques is wise, culturally normal and indeed would be expected by the Court.
- The Court should promote the use of ADR techniques to the extent that they would impose cost sanctions on those who did not agree to take reasonable steps toward settlement and reasonable steps towards the use of ADR. (The Parties would always be free to settle or not and the Court would never sanction a failure to do so.)
The Working Party says that increasing public awareness of ADR is the most difficult challenge. It concludes:
- The promotion of ADR must be seen as part of the wider challenge of public legal education;
- Initiatives such as peer mediation in schools and colleges and the annual Mediation Awareness Week should be applauded.
- There must be a more complete embrace of ADR in law faculties and professional training and disciplinary codes.
- There should be greater coordination between the different ADR areas, including restorative, family, civil, workplace and community, to provide a single “voice of mediation”.
- A new website (perhaps to be called “Alternatives”) should be created as a central online hub for information about ADR to include videos of the different types of ADR techniques being demonstrated;.
- The ADR community must continue to push, as we know it has tried to do for many years, for references to ADR into the broadcast media and into social media.
On availability of ADR:, the Working Party concludes:
- There is a need to ensure the availability of judges for Judicial Early Neutral Evaluation particularly at the fast track level. (We encourage the Financial Dispute Resolution approach – used in family disputes – in low value cases).
- The small claims mediation scheme should be fully resourced so that it can fulfil its potential.
- The Civil Mediation Council should consider the accreditation of cheaper more proportionate forms of mediation such as 3 hour telephone mediations.
- The CMC should look carefully at emulating the regulatory approach of the Family Mediation Council.
- The role of the case officer under the online court system is crucial as is the importance of appropriate recruitment and training.
- Steps should be taken to promote standards for Online Dispute Resolution as a necessary step towards its further promotion and acceptance.
As regards Court/Government encouragement of ADR, the Working Party concludes, among other things, that:
- There should be a review of the operation of the Consumer ADR and ODR Regulations to ensure that the existing rules are complied with and careful thought should be given to their further reinforcement;
- The Rules and the case law have to date been too generous to those who ignore ADR and in our unanimous view under‐estimate the potential benefits of ADR. The present ethos is most clearly embodied in the Halsey guidelines but its approach is embedded in the rules and the court machinery as a whole. These require review.
- Court documents, protocols, guidance material for litigants and case management should all express a presumption that ADR should be attempted at an appropriate stage on the route through to trial.
- The terms of the claim document (potentially also the Defence document) should include a requirement to certify attempts to contact the other party and achieve settlement.
- There should be earlier and more stringent encouragement of ADR in case management: there should be a perception that formal ADR must be attempted before a trial can be made available; we should explore the possibility of applying sanctions for unreasonable conduct that make sense at the interim stage.
The Working Party also states that it has been keen to identify an acceptable mechanism under which a mediation could be triggered without the intervention of the Court. It thinks the British Columbia Notice to Mediate procedure is the most promising option for a first step in this direction.
Where these proposals will go next are very hard to say.
It would be good to see the development of the proposed website. This might be achieveable pretty quickly and at modest cost.
It seems to me that the highly critical references to the Halsey decision – which have been a real drag on positive developments in practice – amount to a clear invitation for the issue to be revisited in the courts, assuming that a suitable case can be found.
When I chaired the ADR sub-Committee, a specific issue was what was the attitude of the judiciary to ADR, and whether or not it was right for them to participate in, for example, Early Neutral Evaluation. This is likely to need further work and training for judges to gain the confidence and experience to undertake this work.
The calls for public legal education sound fine – but can they be made effective without funding?
Notwithstanding these reservations, ADR remains an issue which remains important in the developement of civil justice practice and procedure.
The report can be accessed at https://www.judiciary.uk/announcements/new-report-on-alternative-dispute-resolution/
Consultation on extending Fixed Recoverable Costs
Historically the civil justice system in England and Wales has operated under a ‘loser pays’ model, whereby the unsuccessful party to litigation covers the costs of the successful party. This can lead to high costs for the unsuccessful party.
In recent years, increasing consideration has been given to the idea that the costs paid by the loser should be fixed. Fixed Recoverable Costs (FRC) prescribe the amount that the winner can claim back from a losing party in civil litigation. These legal costs are set in advance by reference to grids of costs. Thus FRC have the advantage of giving both parties certainty as to the maximum amount they may have to pay if they are unsuccessful in their case. FRC can also ensure that the costs of cases are proportionate to the sum in issue.
FRC currently operate in most low value personal injury cases. The government and senior judiciary announced their support for extending FRC in November 2016, and Sir Rupert Jackson, then a judge of the Court of Appeal, was commissioned by the senior judiciary to develop proposals. Sir Rupert’s report, which was published in July 2017, follows on from his major report of 2010 looking at civil costs more widely, which led to significant reforms to controlling costs, including ‘no win, no fee’ reforms in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).
Sir Rupert’s July 2017 supplementary report which focuses on the extension of FRC, completes his recommendations. (See this blog, 29 September 2017) The Government has now decided that the time is now right to consider the extension of FRC to more cases, on the lines recommended by Sir Rupert.
The Government is not planning to take forward all Sir Rupert’s recommendations. This Consultation focusses on three specific matters:
- Extending FRC to cases valued up to £25,000 in damages in the fast track. (This principle has already been adopted for Clinical Negligence claims);
- A new process and FRC for Noise Induced Hearing Loss;
- Expanding the fast track to include the simple ‘intermediate’ cases valued £25,000–£100,000 in damages.
The Consultation runs until 28 June 2019.
For details go to https://consult.justice.gov.uk/digital-communications/fixed-recoverable-costs-consultation/
Post-implementation review of Legal Aid, Sentencing and Punishment of Offenders Act 2012, Part 2 (The ‘Jackson’ reforms on costs)
Part 2 of LASPO introduced changes recommended by Lord Justice Jackson on the rules relating to the costs of civil litigation. The Post-Implementation Review (PIR) report, also published in February 2019, covers the following five changes made by the Act:
- non-recoverability of conditional fee agreement (CFA) success fees;
- non-recoverability of after the event insurance (ATE) premiums;
- the introduction of Damages-Based Agreements (DBAs);
- section 55 changes to Part 36 offers; and
- banning referral fees in personal injury (PI) cases.
These changes came into effect in April 2013. Other changes – dealing with different issues, and which came into effect at different times – were not within the scope of the PIR
According to the PIR review, the changes had five objectives:
- reducing the costs of civil litigation (Objective 1);
- rebalancing costs liabilities between claimants and defendants (Objective 2);
- promoting access to justice at proportionate cost (Objective 3);
- encouraging early settlement (Objective 4); and
- reducing unmeritorious claims (Objective 5).
The review drew on evidence presented to the review team by a range of stakeholders involved in civil litigation. Data were also subject to empirical analysis by Professors Fenn and Rickman – two researchers with a long track record of empirical analysis of court and process data.
The overall conclusion of the Review was that, in general, the objectives of the legislation had been met.
There was concern that the regulations relating to Damages Based Agreements were not as clear as they might be; the Government will consider whether to amend them in due course.
The Review did not consider other reforms made by Lord Justice Jackson, in particular relating to much greater use of fixed recoverable costs. The Report states that the Government is not currently minded to introduce these further changes.
Practitioners had expressed the view, during review, that a period of regulatory stability would be welcome. It seems that the Government has largely accepted this.
The Press Release and Report can be accessed at https://www.gov.uk/government/publications/post-implementation-review-of-part-2-of-laspo
Civil Liability Act 2018
The Civil Liability Act 2018 makes significant changes to the personal injury compensation system. In outline, it has three principal objectives.
First, it changes the rules relating to claims for injury for whiplash (which arise when someone drives into the back of your car). Measures in the Act will:
- provide for a tariff of compensation for pain, suffering and loss of amenity for whiplash claims. The final tariff will be set in supporting regulations via the affirmative procedure following Royal Assent.
- enable the court, subject to regulations, to increase the compensation awarded under the tariff
- introduce a ban on seeking or offering to settle, whiplash claims without appropriate medical evidence
The purpose of these changes is to try to reduce the cost of motor insurance for motorists in general by reducing the numbers and amounts of such claims.
Second, it makes changes to the way in which what is called the Personal Injury Discount Rate is set. The new rules will
- retain the 100% compensation principle which has long been a central part of the law, but modernise the calculation of the discount rate so that it reflects the reality of how claimants actually invest money. This provides a fairer and better way to set the rate for both parties
- put the process of setting the rate on a statutory footing, with expert independent advice and a requirement for the Lord Chancellor to set it at least every 5 years, giving clarity and assurance to claimants and to those underwriting costs. The regular setting of the rate will ensure vulnerable people suffering life-changing accidents have their compensation adjusted by an up to date rate
- create an independent expert panel, which the Lord Chancellor will be required, from the second review under the new legislation, to consult in relation to the factors he or she may consider in setting the rate. This will bring a wider range of expertise into the process
Thirdly. the Act requires insurers to provide information to the Financial Conduct Authority so that the government can assess whether they have passed on savings as a result of the Act to their customers.
Post-implementation review of LASPO Part 2: the Jackson Reforms
I have noted elsewhere the fact that the Government has started a post-implementation review of the Legal Aid Sentencing and Punishment of Offenders Act 2012 (LASPO). (See this blog, March 2018 and September 2018).
The principal focus is on changes to the legal aid scheme – Part 1 of the Act.
Part 2 of the Act introduced changes to the costs rules relating to civil litigation proposed in the review led by Lord Justice Jackson.
Progress with this review has been slower than with the legal aid review. But in June 2018, the Government published a short statement on how it thought the changes were going, and set out a number of questions on which it sought evidence from practitioners and other civil justice stakeholders.
The focus of the inquiry is on the five principal reforms contained in the Act. They are
- (i) non-recoverability of Conditional Fee Agreement success fees;
- (ii) non-recoverability of After the Event insurance premiums,
- (iii) the introduction of Damages-Based Agreements,
- (iv) section 55 changes to Part 36 offers to settle proceedings,
- (v) banning referral fees in personal injury cases.
The preliminary view of officials is that while their introduction was very contoversial, they are working pretty well in practice.
In June 2018, the Government has published an initial assessment together with a list of questions to which it hopes practitioners will respond during the summer of 2018. A further report will be published in due course.
The document is available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/719140/pir-part-2-laspo-initial-assessment.pdf
What’s in a name? ‘Business and Property Courts’
From June 2017, ‘The Business and Property Courts’ will be the new name for England and Wales’ international dispute resolution jurisdictions and will act as a single umbrella for business specialist courts across England and Wales.
This is rather more than a simple re-branding. The main objective of the new arrangements is that it will enable appropriately qualified judges to be deployed more flexibly so that their expertise can be used in whatever forum it is needed.
Business and Property Courts brings under a single umbrella the following existing courts and lists:
- The Commercial Court (covering all its existing subject areas of shipping, sale of goods, insurance and reinsurance etc.)
- The Admiralty Court.
- The Mercantile Court.
- The Technology and Construction Court (covering all its traditional areas of major technology and construction cases).
- The Financial List (covering banking and financial markets).
- The Companies and Insolvency Court.
- The Patents Court.
- The Intellectual Property and Enterprise Court (the “IPEC”).
- The Competition List.
Other courts and lists will be added in future to include the existing business and property cases in the Chancery Division.
There will also be Business and Property Courts in Birmingham, Manchester, Leeds, Bristol and in Cardiff, with expansions to Newcastle and Liverpool likely in the future.
Although the framework will be new, existing practices and procedures will be retained, at least for the time being.
The details are in https://www.judiciary.gov.uk/announcements/business-and-property-courts-media-release/
Dealing with whiplash injuries: the Prisons and Courts Bill 2017
For some time the Government (under pressure from the Insurance industry) has been concerned about the numbers of claims and the aggregate amount of those claims for minor injuries arising from Road Traffic Accidents.
Between November 2016 and January 2017 the Government consulted on a package of measures to tackle the continuing high number and cost of whiplash claims and their impact on motor insurance premiums.
The Government’s concern was that the volume of road traffic accident related personal injury claims has remained static over the last three years and is over fifty per cent higher than 10 years ago (460,000 claims registered in 2005/06 28 compared with 770,000 in 2015/16) despite a reduction in the number of road traffic accidents reported to the police and improvements in vehicle safety, for example better head restraints.
It was noted that similar improvements in vehicle safety in other jurisdictions have led to a reduction in both the number of claims and motor insurance premiums.
The Government’s view is that the continuing high number of low value claims increases the cost of motor insurance premiums, paid by motorists in England and Wales. The Government has set out its view that the level of compensation paid to claimants for these claims is also out of proportion to the level of injury suffered. It has therefore decided to introduce measures to disincentivise minor, exaggerated and fraudulent claims.
Part 5 addresses this matter.
Clause 62 enables the Lord Chancellor to specify in regulations, in the form of a tariff, the damages that a court may award for pain, suffering and loss of amenity (“PSLA”) for relevant whiplash injuries sustained in road traffic accidents, in those cases where the duration of the injury does not exceed or is not expected to exceed two years. The tariff will provide for an ascending scale of fixed sum payments with the relevant tariff for a particular case identified by reference to the severity of the injury. Regulations may specify different sums for different descriptions of injury.
There will be power to deviate from the tariff in exceptional circumstances.
Clause 64 bans regulated persons (basically solicitors and barristers, legal executives and alternative business structures) from making or accepting a payment in settlement, or inviting, or offering to settle an RTA related whiplash claim without appropriate medical evidence.
Whether these changes will actually lead to any reduction in insurance costs is currently hard to determine, particularly given other recently announced changes that may result in a general increase in awards of damages for personal injury.
Review of fixed recoverable costs
One of the central recommendations of Lord Justice Jackson’s 2010 Review of civil litigation procedures and costs was greater use of fixed recoverable fees. The principle of fixed costs had been advanced by the Civil Justice Council for a number of years; indeed they helped to negotiate an agreement that this was the way forward for certain low vale Road Accident claims. Jackson wanted to go further and apply the principle of fixed costs to a wider range of types of case and to cases of higher value. He has continued to advocate the need for many more cases to come within the fixed costs regime – in his view, cases up to £250,000.
Now the senior judiciary (The Lord Chief Justice and the Master of the Rolls) have commissioned Lord Justice Jackson to undertake a further exercise to test the practicability and wisdom of his ideas. His review has been given the following terms of reference:
- To develop proposals for extending the present civil fixed recoverable costs regime in England and Wales so as to make the costs of going to court more certain, transparent and proportionate for litigants.
- To consider the types and areas of litigation in which such costs should be extended, and the value of claims to which such a regime should apply.
- To report to the Lord Chief Justice and the Master of the Rolls by the 31st July 2017
It seems highly likely that this exercise will lead to an extension of the existing fixed costs regime.
For details of the announcement see https://www.judiciary.gov.uk/announcements/senior-judiciary-announces-review-of-fixed-recoverable-costs/
Damages based agreements: proposals for reform
One of the most innovative recommendations from Sir Rupert Jackson’s proposals for the reform of costs of civil litigation was that a new regime of ‘damages based agreements’ (DBAs) should be introduced. Known as Contingency Fees Agreements in other jurisdictions, they – in theory – enable a law firm to take on a case, on the basis that if the case is won, the firm can take a percentage of the damages awarded to cover the costs and fees of bringing the action. The intention was that DBAs would be an alternative to Conditional Fee Arrangements – which have been around for some years now.
Although introduced in 2013, they have not taken off as had been hoped. DBAs were subject to special regulations – the Damages-Based Agreements Regulations 2013, SI 2013/609. These regulations have had a chilling effect which has deterred litigators from using them as Jackson had intended.
The Ministry of Justice has drafted proposals for amending the regulations. It was also agreed that the Civil Justice Council should take a specialist look both at the draft revised regs and wider policy issues.
Its report on both these matters was published at the beginning of September 2015.
It seems likely that a version of the revised draft regulations will be brought into effect later in 2015, which should clear up some of the issues which have worried litigators.
But the wider policy issues seem unlikely to be addressed in the short term. The likely impact on civil litigation practice is thus currently very hard to determine.
For the CJC report see https://www.judiciary.gov.uk/announcements/damages-based-agreements-dbas-publication-of-cjc-recommendations/
For a professional commentary on the report see http://blogs.lexisnexis.co.uk/dr/revisions-to-damages-based-agreements-for-civil-litigators/
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Martin Partington: Introduction to the English Legal System 15th ed 2021
Oxford University Press Learning Link Resources
Martin Partington: Spotlight on the Justice System 