New Civil Procedure Rules in U.K.

June 1999

With effect from the 26^th April 1999 a new procedural code has governed the conduct of all cases before the Civil Courts in England and Wales. This includes the Commercial Court and the City of London Business Court in London both of which have traditionally dealt with shipping and shipping related matters.

It is important to note that the Civil Procedure Rules do not have any effect on the jurisdiction of the English Court. Further, although the new Rules apply to all court proceedings, including those commenced in relation to arbitration, the Rules do not in theory affect the conduct of arbitrations themselves in London although there are already some signs of arbitrators seeking to adopt some of the ideas/principles behind the new Rules.

The Overriding Objective

The very first part of the new Rules states the overriding objective of "enabling the Court to deal with cases justly". In the context of "justly", the new Rules makes specific reference to saving expense and to dealing with cases in ways which are proportionate to the amount of money involved, the importance of the case, the complexity of the issues and the financial position of each party, as well as dealing with the matter expeditiously. All of these objectives reflect concerns of Members, the Association and the Managers in relation to the resolution of legal proceedings.

Changes of Approach

The Courts consider that to achieve the overriding objective they must actively manage cases. Prior to the new Rules (and unlike many continental and US Courts) the English Courts operated an essentially adversarial system in which , to a large extent, the parties were free to agree between themselves the pace at which and the way in which a case should proceed. Thus the parties were free to agree extensions of time with each other (often general extensions subject to termination on notice) and areas of evidence and issues generally.

This freedom is now very severely restricted: Many steps in an ordinary action which must now be carried out within a particular timescale and cannot be deferred or delayed simply by agreement between the parties. The Court must also be consulted and give its agreement.

Prior to the new Rules there was already more "active" involvement in the management of Commercial cases by the judiciary, particularly at the stage of the Summons for Directions, however, the new regime is much more prescriptive.

Points of Note

This article cannot examine in detail all the changes that were effected by the new Rules but the main points of relevance to Members are:-

i) Pre-action Protocols - these are to be followed even before proceedings are issued. The Protocols require exchange of information and documents relevant to a claim with the aim of encouraging settlement without the need for proceedings. So far, two Protocols have been created, one for personal injury claims and the other for clinical negligence. It is anticipated that others will follow, but a practice direction for the Protocols makes it clear that even in cases not yet covered by a specific Protocol the Court will expect the parties to follow the example of existing Protocols, in keeping with the overriding objective. Failure to comply with the Protocols (including the time limits which they impose) can give rise to various forms of penalty in the proceedings which follow; ii) Statement of Case - this is the new name for pleadings. The intention of the Court is to encourage simple pleadings with a view to ensuring that the main issues are identified (see below). Statements of Truth now have to be provided by a party or his legal adviser confirming the truth of and belief in the party’s case; iii) Case Management Conference - six weeks after all defences have been served in an action a mandatory Case Management Conference must take place. This is a key step in the litigation. It is noteworthy that this conference, which may be compared in some ways to the previous Summons for Directions, takes place at a very early stage compared to the previous procedure. It takes place before disclosure of documents and its purpose is to enable the Court to define the issues and the future timetable and conduct of the case. The practical importance of this is that it appears that parties will have to be prepared in relation to their documents, factual witness evidence and expert witness evidence at a much earlier stage than has been the custom previously; iv) List of Issues - prior to the Case Management Conference the parties are obliged to file a list of important issues of fact and law which are to be determined if the case goes to trial. This has been designed to narrow down, if possible, or at the very least clarify, the issues which the Court will determine; v) Disclosure - this is the new name for what was discovery under the old Rules. There are two types of disclosure, standard and specified. Standard disclosure is generally obligatory in all cases subject to the Court’s direction at the case management conference. Special disclosure may be ordered by the Court on application if it can show that documents produced through standard disclosure will be adequate to enable the Court justly to resolve the matter. An important point which Members should bear in mind is that under the new Rules each party is required to make a reasonable search for documents of the type required to be disclosed. The list of documents required by standard disclosure must contain a disclosure statement confirming the extent of the search that has been made to locate the documents and a certificate confirming an understanding by the party of the duty as to disclosure and that that duty has been carried out. This has to be signed by a party himself i.e. the Member and cannot be signed by his solicitors. From a practical perspective, therefore, as soon as Members have knowledge of the facts which may give rise to a claim they should take steps to ensure that all relevant documents are preserved and designate a specific individual within the company to be responsible for this task being someone who can then sign the disclosure statement; vi) Expert Evidence - such evidence is now only permissible with the leave of the Court and there are now detailed provisions in the new Rules as to the basis upon which expert evidence is to be given. These follow recent Commercial Court authorities in which the Court has sought to make clear that an expert is there to assist the Court and not to argue the case of his or her client. The Court will also wish to know whether the parties can agree on a single expert and if not, why not. The instructions given to expert witnesses, although formerly privileged from disclosure, are now disclosable to the Court in certain circumstances; vii) Offers of settlement - the new Rules provide in Part 36 for a procedure by which not only the Defendant but also the Claimant can make a settlement offer in order to try to protect its position as to future costs and to make payments into Court. Previously such a procedure was only available to the Defendant. There are potentially severe costs consequences for unreasonable failure to accept a Part 36 offer; viii) Costs - Prior to the new Rules orders for costs made at interlocutory hearings during the course of the case were not generally payable or dealt with until the end of the case. Under the new Rules the Court will assess costs at the time of a hearing (even an interlocutory hearing) and will direct payment of such costs within a short fixed period. This is therefore a cashflow impact for parties to litigation; ix) Mediation - even prior to the new Rules the Commercial Court was increasingly inviting parties to consider forms of alternative dispute resolution such as mediation. It is clear from the background to the new Rules that the Courts will increasingly order the parties to try alternative dispute resolution and/or expect the parties to have already attempted it.

Summary

The new Rules have been in effect for just over two months at the time of preparing this article. The full impact of the changes is yet to work itself out but from the point of view of Members the implications are that if you are a Claimant you can put the Defendant under significant time pressure. If you are a Defendant you must bear in mind that if there is a risk of a claim then if you have not already collected your evidence and identified relevant witnesses then you will have a very limited time within which to do so once the Claimant starts his action. For both sides the ability to "buy time" by agreement or to manage the case by agreement with the other party is now almost non-existent. Almost everything is subject to the Court’s agreement and the Court will wish to bear in mind its overriding objective in not permitting continued delay.

 

With thanks to Richard Crump of Holman, Fenwick & Willan for preparing this article