May 03, 2017

International Disputes Reform: Recent and Proposed Innovations in the U.K.

Reform and innovation continue to be at the forefront of judicial thinking on maintaining the position of England and Wales as the premier jurisdiction for dispute resolution, as demonstrated by three recent and proposed changes to the management of commercial litigation.

Leveraging Judicial Expertise

From June 2017 the specialist courts of the High Court, which primarily deal with international business disputes, will be brought under the single umbrella of the “Business and Property Courts of England and Wales.” The courts affected include the Commercial Court, the Technology and Construction Court, and the courts of the Chancery Division dealing with financial services, intellectual property, competition and insolvency.

The existing procedural requirements and formalities of each separate court will remain but their integration under the “Business and Property Courts” banner will allow for increased cross-deployment of judges. Ultimately, this will mean that business users are more likely to have their cases heard by the most experienced and expert judges according to the particular issues in dispute.

Controlling Costs

In November 2016, Lord Justice Jackson was commissioned to conduct a review of fixed recoverable costs in civil proceedings. The scope of the report includes developing proposals for extending the present civil fixed recoverable costs framework and to consider the types of litigation and the value of claim to which fixed costs may be applied.

The final report is not due until 31 July 2017. However, in a lecture given prior to the announcement of the review, Lord Justice Jackson advocated fixed recoverable costs for all fast track claims and lower value multi-track cases up to a value of £250,000. As an illustration of how significant a change fixed recoverable costs would be, Lord Justice Jackson, in his lecture, suggested that in a claim for £250,000 the maximum total amount of costs recoverable would be £70,250 (subject to, inter alia, a 15 percent uplift for London-based work).

A fixed costs pilot scheme (likely to be for cases up to £250,000) is proposed to commence in summer 2017 in London (Mercantile Court) and Manchester (Chancery Division, TCC and Mercantile Court). The purpose of the pilot is to gauge demand and to evaluate how fixed costs would work in practice. Although it is unlikely that Lord Justice Jackson’s final recommendation will be as radical as first mooted, businesses will clearly welcome increased transparency on costs prior to commencing litigation.

Streamlining Procedure Through Technology

Finally, a speech by the Lord Chief Justice, Lord Thomas, in autumn last year suggests that there is considerable appetite for continued reform of civil procedure to the benefit of users. Lord Thomas identified three key features of a “radically reformed approach”: (1) the design of a common IT system, (2) the use of a single generic procedural code, and (3) the proportionate and tailored application of a generic code.

Practically speaking, the aim is to leverage technology to simplify legal procedure in England and Wales. Lord Thomas argues technology means that procedural compliance could become a matter of “completing the requisite stages in a web-based process, which can be facilitated through the use of automatic prompts to litigants.” Such an approach could make procedural compliance easier, reduce costs and facilitate service. Such advances could allow for the creation of a single, generic procedure that can be used regardless of type of claim. This single procedure could be supplemented by practice directions (e.g. Commercial Court Guide) to allow the single procedural code to work effectively in a particular case context.

There is still a long way to go before Lord Thomas’ proposal becomes a reality but we have already seen the first steps towards this goal with the introduction of the new CE-File system for the Rolls Building jurisdictions. This became mandatory from 25 April 2017 and means that all issuing and filings must be electronic and not in paper-based format.

Together, these three recent and proposed reforms demonstrate that the Courts of England and Wales are determined to improve civil dispute resolution to the benefit of their business users.

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