Posts Tagged ‘civil litigation’
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.
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.
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/
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/
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.
The following diagram can be seen at https://www.judiciary.gov.uk/you-and-the-judiciary/going-to-court/high-court/
It gives more information about how the recently announced specialist financial list will be structured within the High Court of England and Wales. Go to the website and click on each of the headings for more information.
The creation of this new list raises, in my mind, a more general question – should specialist facilities be available only for the rich litigating over large sums of money. Other areas are arguably worthy of similar treatment – e.g. housing. Given the investment in new technologies it might also be argued that access to specialist judges would not necessarily need to be in specific court buildings; they could be asked to deal with cases on-line via video links, for example. This may be an issue for Lord Justice Briggs to consider
In purely commercial terms, the civil justice and tribunals system operates at a financial loss. Many argue that this is as it should be – the provision of courts and tribunals is a public service that should be financed generally by the state, not just by those who have to use the courts. But the former Coalition Government and the current Conservative Government do not share this view. They argue that users of court and tribunal services should pay more for them than they historically they have done. Despite recent increases in court fees, the Government states that the Courts and Tribunals Service costs £1 billion more than the income received through fees.
In January 2015, I noted here the decisions of the Government to introduce new court fees – decisions which, when they came into effect in April, resulted in a great deal of complaint from the legal profession. Those decisions were also accompanied by a consultation on other proposed changes to court fees.
This incremental approach to policy making – linking decisions and consultations – has now been used again. In July 2015, the newly elected Conservative Government reached its conclusions on the issues it consulted on in January 2015, and at the same time set out further proposals for fee changes on which views are sought – nicely timed for the holiday period when Ministers and civil servants are away, leaving holiday homework for those who have to respond to these documents!
The July 2015 document sets out the following principal decisions and issues.
Court fees – general
We have carefully considered the concerns raised during the consultation and decided not to increase fees by 80% as originally proposed. Instead we will press ahead with a more affordable increase of about a third. We are also protecting the most vulnerable by ensuring that fee remission is available for those who need it, such as women in low wage households.
It cannot be said that the three changes listed above are going to impact significantly on the £1bn shortfall; the Government’s own estimates are that the increased fees will only raise around £60 million.
It is worth remembering that in determining the balance between what users pay towards the overall cost of the court and tribunal service as compared with the financial burden that falls on the taxpayer. That is why, in the last Coalition Government, section 180 of the Anti-social Behaviour Crime and Policing Act 2014 gave the government power to set fees at a level above the costs of proceedings to which they relate, i.e. in crude terms to make a surplus on certain types of proceedings which could be used to fund other types of process.
The Government has now set out further proposals relating to fees for proceedings.