Strasbourg, 23 March 2004                                                                                   CCJE (2004) 8

[ccje2004/docs/CCJE(2004)8e]                                                                                                                    English only

CONSULTATIVE COUNCIL OF EUROPEAN JUDGES

(CCJE)

QUESTIONNAIRE ON MANAGEMENT OF CASES,

JUDES’ ROLE IN THE PROCEEDINGS,

AND USE OF ALTERNATIVE DISPUTE SETTLEMENT METHODS

Reply submitted

by

the delegation of United Kingdom

(The answers follow the paragraph numbering in the Questionnaire.)

A. ACCESS TO JUSTICE

1. The Courts are operated by the Court Service (a branch of the Department of Constitutional Affairs, formerly the Lord Chancellor’s Department). The Court Service issues to potential and actual litigants written and oral guidance, primarily through the various court offices) about how to proceed. The Court Service website has a great deal of information about issuing and pursuing proceedings, or being involved in them as a witness, an accused or a juror. The publicly funded Citizens’ Advice Bureau also fulfils a useful service in advising and representing litigants, and has its own valuable website.

2. To some extent, yes. Litigants in person (i.e. appearing for themselves without a lawyer) are permissible and have the right of audience at every level of the UK system. Impoverished litigants can obtain relief from court fees.

Claims are allocated to one of three “tracks” – small, fast and multi, according to their size and to some extent complexity. “Small claims” are basically claims for up to £5,000 (with some restrictions where the claim includes damages for personal injuries or landlord’s repairs). Procedures are highly simplified, with short very time limits and the costs recoverable by a winning party from a losing party are very limited. Fast track cases also attract a simplified and speedy procedure, with slightly more generous costs provisions (up £350 for claims up to £3,000, up to £500 for claims between £3,000 and £10,000 and up to £750 for claims over £10,000). Multi-track cases are more complex, and the indemnity in respect of costs payable by a losing party awarded can be much higher. Lawyers’ costs are probably the UK system’s biggest unresolved problem.

3. Legal aid is generally available, subject to a means test, in criminal cases. In civil cases, the legal aid system is administered by the Legal Services Commission, with a regional offices responsible for granting it, their decisions on eligibility being subject to review by funding review and costs committees. The cost of providing legal aid falls however on (and became expensive to the point where it has undermined the finances of) the Lord Chancellor’s Department, now the Department of Constitutional Affairs. As a result, the availability of legal aid in many civil cases has been sharply curtailed and alternative means of funding encouraged (e.g. conditional fees and legal costs insurance). The criteria for eligibility for “Legal Help” and “Help at Court” (basically everything short of detailed investigation and litigation) are now capital of less than £3,000 combined with income which is less than £2,288 in terms of gross income and less than £621 in terms of disposable income per month. The criteria for litigation (other than before an immigration adjudicator or appeal tribunal) are slightly more generous. Any sums recovered from the other side (other than by way of maintenance) go first to satisfy sums paid out in legal aid.

4. Legal expenses insurance can be sought on the market to cover (a) costs ordered to be paid to the other side, if the other side wins and/or (b) one’s own costs, if one loses. It is available for certain claims under some regular householders’ insurance policies. Alternatively, it can be sought on an individual case basis – but whether it will be available and at what price depends on the nature of the claim/defence and its prospects.

The alternative funding means in respect of one’s own costs is a conditional fee arrangement – a contract allowed by legislation under which the lawyers get nothing if they lose, but can recover up to 200% of the normal fee, if they win. This gives the lawyers an interest in the litigation, which many criticise as unhealthy. It also gives them every incentive to assess as high a “normal” fee as possible, although of course the court has power to review any figure they agree with their client, in order to determine whether it is reasonable.

B. REDUCTION OF EXCESSIVE WORKLOAD IN THE COURTS

1. Yes. Basically, United Kingdom judges are able to concentrate on judicial functions, although in recent years a number of judges have become increasingly involved in liaising with the Court Service.

2.  There are some small arbitration schemes. Mediation is the other new system, which has gained considerable impetus in recent years.

3. Yes. This subject is examined statistically as well as by practical observation. A Unified Court Administration has been introduced this Spring, bringing all courts (i.e. Magistrates Courts, County and Crown Courts and High Court and Court of Appeal) under the Court Service. The aim will be to combine and consolidate courts in single buildings, where appropriate. The judiciary has been involved in the discussions, both locally and centrally. A judge sits both on the Court Service National Property Board, and on the Court Service Central Executive Board.

4. Only a limited role in direct administration. But, increasingly, judges are involved in consultations and discussions on these subjects. There is still considerable room, however, for further progress in this area.

C. QUALITY OF JUSTICE AND ITS ASSESSMENT: QUANTITIVE STATISTICAL DATA; MONITORING PROCEDURES

1. Not really. Appeal Courts soon come to know of judges whose standards seem to be falling. Such judges also get to know because all judges are sent copies of judgments on appeals from them, and in less formal ways (the local presiding High Court judge might for example speak to a judge about obvious failures in his or her performance). The media from time to time investigate and report on the perceived quality of various judges, e.g. commercial or Crown Court, usually based on court users’ reports and record on appeal.

There are some other indicators of efficiency (such as throughput of cases or time taken to issue judgments) but none related to the quality of the judgment produced.

2. See 1.

3. Courts have “target times” within which to handle cases or appeals. In civil cases, applications for permissions to appeal should be disposed of within a few months, and appeals within a year. Annex C below is the current direction showing the detailed target dates for different types of case. Judgments on appeal should ordinarily be produced within 3 months (in practice they are usually much quicker) In criminal cases the target times for dealing with applications for leave to appeal are 5 to 6 weeks in respect of applications relating to sentence and 3 to 4 months in respect of applications relating to conviction. The target times for the total time elapsing until disposal of appeals (i.e. including both the time taken before and the time taken after leave to appeal is given) are 5 months (sentence) and 8 months (conviction). Complex cases can of course take longer. Very urgent cases can take almost no time to go through the system from bottom to top.

D. ALTERNATIVE DISPUTE RESOLUTION

a) in general

1. There are a number of schemes, the main private one being run by CEDR (Centre for Dispute Resolution). There are court sponsored schemes, e.g. the Central London County Court scheme and the Court of Appeal scheme. Costs have to be borne by the parties, but, if mediation is undertaken to resolve litigation, the costs may form parrt of the litigation costs. Legal aid may also cover mediation costs. More generally, see also the paper on ADR annexed as A.

2. No.

3. Yes.

4. (First question) Yes. (Second question) No.

5. Refusal even to try ADR may be taken into account in litigation costs orders. But refusal to accept an amicable settlement proposed during mediation is a confidential matter, into which the court cannot go. There are, however, ordinary litigation procedures whereby a party may offer to pay a sum on account of the claim, or to accept a lesser sum than he is claiming, and the court may after deciding the case take into account in various ways (in particular in costs and interest orders) the other side’s refusal to accept such an offer, if the other side has not done better than the offer.

b) in court ADR

1. A judge may order parties to use their best endeavours to mediate their dispute, even without their consent. Article 6 of the Human Rights Convention means, however, that this can only involve a temporary stay - the judge cannot absolutely refuse to hear their case, if they refuse mediation.

The judge may not himself serve as mediator in UK practice. He may, if parties request, give a assessment of the merits on the basis of the material before him e.g. without hearing witnesses, but then he can no longer try the case.

2. CEDR has established extensive training course for mediators, and codes of conduct.

3. A binding agreement is a binding agreement, whether it is the result of mediation or any other process of negotiation leading to settlement. It can be made into a court order.

c) out of court ADR

1. They are no doubt subject to ordinary principles governing the making of any contract. In other words, if induced by fraud or simple misrepresentation, or (in rare cases) by common mistake or by the exercise of undue influence, an agreement concluded in out of court mediation could be set aside.

d) ADR in administrative law disputes

1. This is a relatively new area, just developing. An administrative proceeding would not be necessary to conclude such a settlement.

e) criminal law and ADR

Basically, this does not exist. The Crown Prosecution Service may (subject to judicial approval) agree to accept a plea of guilty to a lesser offence. A judge may before a trial indicate that he would (or would not) pass a custodial sentence, whether the defendant pleaded guilty or entered a plea of not guilty but was found guilty by the jury. But a judge may NOT say that, if the defendant pleads not guilty and is found guilty he will go to prison, whereas if he pleads guilty the judge will not send him to prison. All defendants know however in practice (if only because their lawyer will tell them) that a plea, especially an early plea, of guilty is going to attract a less severe sentence (even if the reduction is only in the length of sentence, by usually about 20% - 30%). (Rendering assistance about other offending by other people also attracts a diascount.)

E. CASE  MANAGEMENT

a) in general

1. English litigation is generally quick. Small claims take a few months. Fast track somewhat longer. Multi-track can take much longer, depending on complexity, but even the most complex commercial cases should be tried within a maximum of say 2 years after commencement. Urgent cases will be tried quicker.

2. Yes, very extensive powers under the new Civil Procedure Rules 1998 as amended.

3.   Yes, save of course on appeals.

b) in civil disputes

Please see the paper annexed below as B, delivered at last November’s CCJE conference, which covers most of the points.

As to 4.2, a summary judgment has the force of res judicata. An order for interim payment (which is made on the basis of a provisional assessment of the likelihood of success) does not.

As to 4.3, the answer is yes.

As to 10, most appeals require permission (or “leave” – the same thing), given either by the court below or by the appellate court. To go to the Court of Appeal, the test is whether there is a real prospect of success or some other reason (e.g. an important point of principle or practice or some other reason). To go to the House of Lords, the case must be sufficiently significant – the Lords only decide about 100 case each year. The system is very successful in reducing the work-load, and eliminating hopeless appeals, although of course it involves some court time to operate. Initially, permission is sought and granted or refused on paper. There is a right to a (brief) oral hearing (usually only before the judge who dealt with the matter on paper, though (s)he may direct that another judge or even judges sit with him/her.

c) in criminal matters

1 and 2. Various procedures have been introduced to make the system more efficient, e.g. (a) plea and directions hearings, when a judge will set timetables and make orders for the progress of cases to trial, and when a defendant may indicate whether he pleads guilty or not guilty at an early stage, (b) the requirement that the defence state its case and produce statements of any expert evidence in advance.

3. (i) Whether there is sufficient evidence to prosecute (i.e. offering a reasonable prospect of a conviction) is a matter for the Crown Prosecution Service (“CPS”) to assess. In some (e.g. minor) cases, the police or the CPS or Attorney General may also decide that the public interest would not be served by a prosecution. The police may, instead of taking a matter further, administer a caution to a person who admits guilt. Such a caution will be recorded and may later be taken into account for certain purposes, e.g sentencing for a later offence.

(ii) and (iii) Certain minor offences are decriminalised, e.g. parking offences and speeding offences carry fixed fines, provided that these are paid within a certain number of days, and some revenue offences carry penalties (although still criminal in the sense of article 6 of the Human Rights Convention).

(v) Such a procedure exists. An early plea dispenses with any need for witnesses or a trial (and lead to a discounted sentence).

(viii) Not applicable in the jury system. The judge’s summing up is recorded (and will be transcribed whenever there is an application for leave to appeal). The jury’s verdict is always in unreasoned, general terms.

4. The juror are the judges of fact, in any issue of guilt or innocence. The judge directs the jury on law in his/her summing up, and passes sentence (giving brief reasons) on defendants who plead guilty or are convicted by the jury. The judge may also hear evidence and oral argument in the absence of the jury on such questions as for example (a) the propriety of the Crown’s conduct in bringing the prosecution (e.g. if there has been great delay, or if the Crown has obtained the presence of the defendant within the jurisdiction by a trick), (b) the admissibility of evidence or of particular questions put to witnesses, and (c) whether the Crown evidence discloses a sufficient case to go before the jury.

ANNEX A

(ADR paper)

ALTERNATIVE DISPUTE RESOLUTION

THE ENGLISH POSITION

(Lord Justice Mance)

1. Slowly, but surely, alternative methods of dispute resolution (“ADR”) are beginning to have a real impact in England. English litigation tends to be quite quick, but it is adversarial and expensive. In practice, the principal method of ADR is mediation[1]. Its main advantage is a less adversarial approach and the possibility of a cheaper and even quicker resolution of their disputes by agreement. Where there is or may be a continuing relationship, e.g. as between commercial concerns or even as neighbours, mediation is often easier to agree, and can have the positive benefit of assisting to continue or improving that relationship. Mediation can lead to remedies that courts cannot offer, whether in the form of a new or revised agreement regulating the parties’ position or in as simple a form as the making of an express apology.

2. There are a number of professional bodies offering extensive training and accreditation to mediators. It is a measure of the gradually increasing popularity of mediation that one or two well-known lawyers have even abandoned their former litigation practice and devoted themselves either exclusively or largely to practice as mediators.  However, a recent survey concluded that, outside the commercial sphere, the legal profession “remains very cautious about the use of ADR”[2]. For this reason, court encouragement and pressure is important, and has in some well-known cases yielded successful results which surprised all those involved. In general, the earlier such pressure the better, since costs will not by then have built up.

3. Under the new procedural rules of 1998 (Civil Procedural Rules – CPR), the court’s overriding objective is to deal with cases justly, which expressly includes, so far as practicable, saving expense, dealing with cases in ways which are proportionate to the amount involved, their importance and complexity and the financial position of each party and ensuring that they are dealt with expeditiously and fairly. CPR 1.4 requires the court to further that objective “by active case management”, which expressly includes:

“(a) encouraging the parties to co-operate with each other in the conduct of the proceedings;

(e) encouraging the parties to use an alternative dispute resolution procedure if the court considers that appropriate and facilitating the use of such procedure;

(f) helping the parties to settle the whole or part of the case[3]; ….

The court also has specific powers to adjourn a hearing and stay the whole or part of any proceedings generally or until a specific date or event (CPR 3.1(2)(b)) and stay proceedings to allow for settlement of the case (CPR 26.4).

4. Even before CPR, courts (particularly the Commercial Court) were encouraging mediation, but the CPR has given a boost to its promotion by courts. A number of local courts have developed mediation schemes in the court buildings, e.g. after court hours between 4.30 and 7.30 p.m., so that litigants can be encouraged to go next door, where a trained mediator (not one of the judges) will be available for fixed charges[4]. When a court considers that mediation may yield fruit, it will raise the subject with the parties and encourage them to mediate. If both parties agree, the proceedings will then often be stayed for a period (to save expense and give the parties the opportunity to focus on settlement). Even if both parties do not agree, experience indicates that an order encouraging mediation combined with a stay may encourage an unwilling to change his, her or its mind.

5. The Commercial Court remains a leader in the field, frequently making orders, sometimes against one or even both of the parties’ wishes. A typical order might, for example, be that parties (1) exchange lists of three neutral individuals available to conduct ADR procedures, (2) endeavour “in good faith” to agree a neutral individual or panel to conduct ADR procedures, and (3) take serious steps to resolve their dispute by ADR and (4) if the case does not settle, to inform the court by letter what steps have been taken and why they have failed. Step (4) does not however require or entitle parties to disclose to the court any exchanges or events that may have occurred within the context of any mediation. Mediation is of its nature a confidential process with a view to settlement, and settlement negotiations are generally protected from disclosure in public.

6. Judicial pressure in appropriate cases is in practice successful in England in persuading parties to try mediation. But there is a stick as well as a carrot. In exercising its powers to award costs, the court is entitled to have regard to the conduct of the parties both before the commencement of and during any proceedings: CPR 44.3(4)(a) and (5)(a); and to have regard to any efforts made before and during the proceedings to try to resolve the dispute: CPR 44.5(3). See also Dunnett v. Railtrack Plc [2002] EWCA 303; 1 WLR 2434 (CA), where the court said that it was a misunderstanding of the purpose and often the effect of mediation to refuse it on the ground that the party could not contemplate paying more than it had already offered, since skilled mediators were often able to achieve solutions which were beyond the powers of lawyers and courts to achieve (and, I would add, which the parties never expected, when they embarked on mediation). A successful party who has unreasonably refused to consider or embark on mediation may therefore be deprived of all or part of the costs that would otherwise be awarded in his, her or its favour.

7. Mediation is also encouraged at the appellate level, although the heavy incidence of costs in the court(s) below makes it more difficult, and there is a larger class of case at the appellate level which is not usually suitable for it: e.g. often judicial review cases, insolvency cases and commercial law cases raising significant points of principle. However, the standard information pack sent to all parties to appeals always expressly invites attention to the existence of the court of appeal’s ADR scheme, and the supervising judge will where appropriate also emphasise this to the parties.

8. As to statistics, in the Central London Civil Justice Centre, one of the courts with an in-house ADR facility, in the period between May 1996 and March 1998 62% of the cases mediated settled during the mediation (and a further 30% after the mediation), while only 57% of the other cases settled. In the Commercial Court, between July 1996 and June 2000, 233 ADR orders were made, leading to 52% of the cases settling during the mediation, with a further 20% of such cases settling thereafter, and only a further 5% proceeding to trial, the result of the remaining 23% being unknown at the time of the survey.

 

22 October 2003

ANNEX B

(CASE MANAGEMENT PAPER)

CCJE CONFERENCE

(Strasbourg, 24-25 November 2003)

EARLY SETTLEMENT OF DISPUTES AND THE ROLE OF THE JUDGE

INTRODUCTORY SESSION

Lord Justice Mance

During the 1980s the publicity brochure issued by a set of barristers’ chambers in London showed a barrister with a lion’s face sitting behind a desk and exclaiming to a client: “Settle!? What’s the fun of that?”  Nowadays, many barristers are also accredited mediators. Within a short space of time, the legal professions and the public have become conscious that litigation can no longer be regarded as an interesting occupation, which provides income for lawyers. It is an expensive, time-consuming and often highly stressful occupation for clients, and it is also very costly for governments, who have the social obligation to provide a viable and efficient system of justice, but who have to maintain often elderly buildings, to support and modernise their facilities and to pay judges and staff. So litigants and governments alike have begun to insist on changes and on value for money.

It is the purpose of this conference to examine in this light the role of judges in the early settlement of disputes. To some, this title may suggest a conference focused on that fashionable topic, mediation. And it does include it - but only in our second day. When mediation is ordered or encouraged, the matter passes out of the immediate control of judges. The real purpose of this conference is to show how judges and judicial procedures can in the course of litigation encourage settlement. Judges administer court procedures, and often they are in a position to change them, or to influence or encourage their change. So it is also of value not just to examine ways in which judges may assist early settlement within the confines of existing national procedures, but to examine the procedures and rules developed in particular countries – to see whether they might usefully be adapted to other countries. Each of us will of course be speaking about what we know about – which will mostly be our own system. But I hope that we will interest ourselves in each other’s experience and procedures, with a view to gaining ideas from them.

In this brief introduction, I propose to summarise some of the techniques which have been developed in England to encourage early settlement. They start even before litigation is begun. The code-name under which most of them fall is Woolf – Lord Woolf, our present Chief Justice, having promoted and given his name to a new civil procedural code (“CPR”).

The overriding objective: This new code, the CPR, was implemented in England and Wales on 26 April 1999 with the overriding objective of “enabling the court to deal with cases justly” (CPR1.1(1)). But that uncontentious aim was spelled out by definition (CPR1.1(2)) to include, so far as practicable:

“(a) ensuring that the parties are on an equal footing;

(b) saving expense;

(c) dealing with the case in ways which are proportionate-

(i) to the amount of money involved;

(ii) to the importance of the case;

(iii) to the complexity of the case;

(iv) to the financial position of each party;

(d) ensuring that it is dealt with expeditiously and fairly; and

(e) allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases.”

Of course, some may be suspicious of references to economic considerations in the judicial context. The Consultative Council of European Judges has itself commented in its second opinion that “unfortunately economic aspects may dominate discussions concerning important structural changes of the judiciary and its efficiency”, and that “the courts as one essential arm of the State have a strong claim on resources”. But it also observed that no country “can ignore its overall financial capability in deciding what level of services it can afford”. The CPR’s references to the need to deal with cases proportionately, allocating an appropriate share of the courts’ resources, reflect an undeniable fact. Courts have to work as best they can within existing financial constraints, however much they would wish and are seeking more money. It is unfair not only to the particular litigants, but also to other litigants if one piece of litigation is allowed to develop out of all proportion and without regard to such financial constraints.

It has to be said that the Woolf reforms have probably been more successful in eliminating delays in the progress of civil litigation than in reducing cost. In part, this was the result of intentional ‘front-loading’ of costs. If parties were intent on litigating, then they should prepare properly and pursue the litigation diligently. That costs money. It was hoped that this would bring home to parties the desirability of considering settlement at an early stage. In part, it is also because it is extremely difficult to control costs under a system like the English, where in the larger cases there is full costs recovery, in the sense that the loser pays all the costs that the winner reasonably incurs. (In smaller cases, we have introduced a fixed costs system, adopting therefore a system more like the German.)

The duty to cooperate: The Woolf rules go on to impose on the parties to litigation a requirement to help the court to further the overriding objective. Their complexity was ameliorated through a root and branch re-writing in simple, easy to understand English. The use of Latin phrases was discouraged. However, it has to be said that, in my experience, Latin phrases (like prima facie, ratio decidendi, etc.) remain part of the European legal linqua franca, so once again England is perhaps not fully in accord with the rest of the continent!

Case management: CPR1.4 also state the general principle of case management in broad terms, as well as listing detailed powers. The general principle reads thus:

(1)	“1.4(1)The court must further the overriding objective by actively managing cases.

(2)	(2) Active case management includes –
	(a)	(a) encouraging the parties to co-operate with each other in the conduct of the proceedings;
	(b)	(b) identifying the issues at an early stage;
	(c)	(c) deciding promptly which issues need full investigation and trial and accordingly disposing summarily of the others;
	(d)	(d) deciding the order in which issues are to be resolved;
	(e)	(e) encouraging the parties to use an alternative dispute resolution procedure if the court considers that appropriate and facilitating the use of such procedure;
	(f)	(f) helping the parties to settle the whole or part of the case;
	(g)	(g) fixing timetables or otherwise controlling the progress of the case;
	(h)	(h) considering whether the likely benefits of taking a particular step justify the cost of taking it;
	(i)	(i) dealing with as many aspects of the case as it can on the same occasion;
	(j)	(j) dealing with the case without the parties needing to attend at court;
	(k)	(k) making use of technology; and
	(l)	(l) giving directions to ensure that the trial of a case proceeds quickly and efficiently.”

So the rules state clearly that the court’s role in relation to settlement exists both in encouraging alternative dispute resolution (ADR) and, quite independently, in “helping the parties to settle the whole or part of the case”.

The Woolf rules allow English judges to deal with matters on paper, or for that matter by electronic communication, to a greater degree than previously. But I would like to say a word about the traditional English approach, which has been to decide matters on the basis of oral argument and to do so immediately by an ex tempore oral judgment (later of course transcribed from the tape recording or transcript). To some European eyes, the extent to which English judges intervene and participate in the oral debate with advocates is surprising, and to many the idea of an impromptu oral judgment is both unfamiliar and perhaps even frightening. I have to say that, to newly appointed judges, it can also be worrying. But the oral tradition is bred into English advocates who becomes judges, and I have to say that the impromptu oral judgment is a remarkable instrument for making oral hearings relevant and focuseed, for dealing with a case and the arguments raised while they are fresh in the mind and for despatching business with expedition. The tradition goes back to a great English Chief Justice, Lord Mansfield, a great procedural reformer who dragged English common law out of the mists of the Middle Ages and made it fit for the newly expanding commercial empire. On the very first day of his 32 years in office in 1756, he introduced it in order to start to clear a backlog of unresolved cases. It has survived to this day. I would commend to you the idea that judges can, without losing their impartiality, and should, where relevant and may be helpful, express thoughts they have and difficulties they may perceive in the course of oral submissions. I would also commend to you for consideration the concept of the impromptu oral judgment.

I will summarise the other main features of English litigation which encourage early settlement in chronological order.

Pre-action protocols. Pre-action protocols are documents giving guidance as to steps which should be taken before proceedings are even commenced. Their purpose is to achieve early identification of the issues, by exchange of information and evidence, which may enable parties to avoid litigation and reach a settlement. If settlement cannot be reached they ensure that parties are in a much better position to respond to timetables imposed once proceedings are issued.

The most significant areas where pre-action protocols have been formulated are clinical negligence and personal injury. But there are also protocols for construction and engineering disputes, for professional negligence andf for judicial review. All such protocols are formulated by co-operation between the representatives of those interested on both sides of such disputes, e.g. insurers, lawyers and interested associations or bodies. Of course there must be some sanction, if a pre-action protocol is not observed. Otherwise, parties could and would simply ignore them. The sanctions which the court may impose include an order that a party who failed to follow a pre-action protocol should pay the costs of the proceedings even if successful; and an order that a successful party be deprived of interest, or, where the party at fault is an unsuccessful defendant, an award of interest at an enhanced rate.

Further, the practice direction governing pre-action protocols makes clear that even in cases not covered by any approved protocol, the court will expect the parties to act reasonably in exchanging information and documents relevant to the claim and generally in trying to avoid the necessity for litigation.

Pre-action information. The CPR also aims to avoid unnecessary litigation, by enabling parties to obtain information which will show whether it is worthwhile beginning litigation, as well as to preserve evidence for use if litigation is begun. Under CPR25.1(1)(i) and 31.16, the court may, before litigation is begun, order disclosure of documents by a person likely to be a party to such proceedings, where desirable, amongst other reasons, in order to assist the dispute to be resolved without proceedings.

Provisional measures. Some litigants profess only to be interested in the principle involved in their case. But most are interested in an efficient remedy. An efficient system of provisional remedies can act as a very strong incentive to settle. To take two examples:

(i) The success or failure of an application for an injunction to restrain a breach of contract or other wrong-doing pending trial will often give a very good indication of the likely ultimate result of the litigation at trial, and so lead to early settlement.

(ii) When I started practice, it was a truism of English procedure that a party had no right to attach another party’s asset until he had obtained a final judgment in his favour, unless he had a proprietary claim to the asset. One of Lord Denning’s greatest innovations was the development, as judge-made law, of new procedures, whereby a party could be restrained from disposing of or dealing with his or its assets, if there was a risk that they would otherwise be hidden or dissipated before the litigation concluded. This relief was formerly granted by Mareva injunction (now re-named a freezing order). Such relief can be granted in advance of the commencement of litigation. Because its normal basis is a risk of concealment or dissipation of assets, it is normally granted in the first instance in the absence of and without notice to the party whose assets are affected. Once granted, notice is given not only to him, but to any known or likely holders of his assets, such as his bank. So, from being the jurisdiction which offered no such facility, England has become a jurisdiction to which litigants in foreign litigation sometimes resort simply to obtain interim protection. Because the relief operates in personam (if I may be forgiven the Latin), it can be granted in relation either to specific assets or all a person’s assets, known or unknown, inside or outside the English jurisdiction. It can be combined with an order that he disclose on oath what such assets are and where.

 

The commencement of litigation. A novel feature of the case management process is the allocation questionnaire which all parties are required to complete at the outset of litigation. On the basis of this questionnaire the courts will allocate the case to one of three tracks. Each of the tracks requires a different degree of case management. In the most general terms the pace at which a case must progress to trial and the degree to which it will be subjected to hands-on judicial management increases as one moves from the small claims to the fast track and from the fast track to the ‘multi-track’. In definitional terms the divisions between the different tracks are essentially (though not wholly) financial. The questionnaire therefore requires the parties to provide detailed preliminary details on the action which include the following:

(i)                 whether they wish to have a one month stay to attempt to settle the case;

(ii)               whether they consider that the case is most suitable for the small claims track, fast track or multi-track or for a specialist list; whether they have complied with any pre-action protocol;

(iii)             whether they intend to issue an application for summary judgment;

(iv)             whether they intend to apply for the court’s permission to issue a claim against someone not yet a party to the proceedings;

(v)               what witnesses of fact they intend to call at the hearing and which facts they will deal with;

(vi)             whether there is any reason why the case needs to be heard at a particular court;

(vii)           the estimated length of trial and whether the parties intend to be represented by solicitors or counsel;

(viii)         an estimate of costs (both legal and overall costs including disbursements).

Identification and verification of parties’ cases. No doubt it is a feature of all or almost all legal systems that parties should have to exchange details of their respective cases. But there is a risk that one or other party may seek to use such exchanges to obfuscate or delay, rather than to promote transparency and insight. Importance attaches to (a) a strict time-table for exchanges, (b) a limit on the number of exchanges and (c) rules regulating their content and (d) the extent to which a party is required to commit himself or itself to such content (so that any discrepancy could later be held against him or it). The modern English requirement is that any claim should state the facts relied on “concisely” and that any defence should state which of the allegations in the claim he denies, which he admits and which he is unable to admit or deny, but requires the claimant to prove; further, where he denies any allegation, he must state his reason for doing so; where he intends to put forward a different version of the facts he must state his own version; and, where he fails to deal with an allegation, he shall be taken to admit it. The sanction attaching to failure to file a proper statement of case is that the claim or defence (if any) may be struck out and judgment entered in default of defence.

Summary judgments (CPR24).  The early definition of the real issues between the parties is often a prelude to an application for summary judgment[5]. Summary judgment is defined as “ a procedure by which the court may decide a claim or a particular issue without a trial”. It thus covers both points of fact and points of law. Under the new rules an application can be made by either the claimant or the defendant.  The question of summary judgment can also be raised by the court though the court will of course hear the parties before entering any judgment. Unless the court gives permission a claimant cannot apply for summary judgment until a defendant has responded to the claim by filing either an acknowledgement of service or a defence. If the defendant does neither of these then a default judgment may be applied for. The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if it considers that he has no real prospect of succeeding on (or, in the case of a defendant, of defending) the claim or issue and there is no other reason why the case or issue should be disposed of at trial.

“Interlocutory” judgments. One case management power has proved of very considerable importance in assisting the early settlement of larger litigation. That is the power to “direct a separate trial of any issue” (CPR 3.1(2)(i)). English litigation has always believed that matters fundamental to jurisdiction (e.g. whether the proceedings have been correctly brought in England under what was the Brussels Convention and has become for most purposes Council Regulation (EC) No.44/2001) should be resolved by a separate judgment at the outset of proceedings. This avoids the need for unnecessary, costly and time-consuming argument and investigation on the merits. But it is not the invariable procedure elsewhere in Europe.

In other respects, particularly on the merits, English litigation tended to favour a “big bang” approach. Everything came to a head in one trial. But modern judicial thinking has recognised that there are very often key issues of fact or law. Their determination of which is likely to enable the parties to resolve the remaining issues by agreement. In rejecting a submission that that the trial of separate issues deprived the claimant of his expectation of a full trial, the House of Lords said this in Ashmore v. Lloyd’s [1992] AC 446, 454:

“the control of proceedings rests with the judge and not with the plaintiffs. An expectation that the trial would proceed to a conclusion upon the evidence to be adduced is not a legitimate expectation. The only legitimate expectation of any plaintiff is to receive justice”

The court’s ability to identify a separate issue of fact or law and to determine it in advance of any other is closely linked with the need to define the issues at as early a stage and in a concise and precise a way as possible. There is of course a risk that the separate issue may be separately appealed and that the overall progress of the litigation may in the end be delayed. The magnitude of this risk depends on the speed of the appellate system – which is a different topic. But it is a risk that has to be taken into account, and balanced against the potential advantages. In the English experience, interlocutory judgments have gained a very real importance, but especially in the larger commercial cases, of which London sees many.

Disclosure of documents (formerly known as discovery). As is well known, the English requirements obliging each party to make disclosure of relevant documents (that is documents on which he relies in support of his contentions or which materially affect his case or support the other party’s case) is considerably more extensive than the continental European, but is also much less vexatious and expensive than the United States model. But the CPR aimed at a “culture change”, seeking to limit the extent of discovery at least in the normal case, and to make it more proportionate. Nevertheless, the requirement to disclose unfavourable as well as favourable documents often proves a considerable incentive to settlement - either before or after disclosure has had to be made!

Trial timetable. CPR29.8 requires each party to file a pre-trial check list, after which the court holds a listing hearing or a pre-trial review, and then normally sets a timetable for the trial (if not already set). The court’s powers of strike out is strengthened and parties can expect cases to be struck out simply for failure to comply with a directions timetable, particularly if this will jeopardise a trial date for a case in the fast track. It is particularly important that time limits are complied with if the overall efficacy of the system of justice is to be upheld, and if there is to be an incentive on both parties to settle. Extensions of timetables at the parties’ discretion or simple request ought no longer to be acceptable. That is so in the interests both of the particular litigants, and of other litigants in other litigation. No state’s resources to carry unresolved litigation are indefinite. Nor are those of the European Court of Human Rights, to deal with complaints about delays in member states of the Council of Europe.

Offers to Settle (CPR36). I come to one of the most radical incentives to settle under the new CPR. This consists in its new provisions relating to offers to settle and payments into court, and stipulating for severe financial consequences for a party failing at trial to do better than the other side’s previous offer. A claimant may offer to accept, or a defendant may offer to pay, less than the full claim[6]. (In the case of a money claim, the defendant must also follow up his offer, by paying the money into court.) If a claimant gets more than he offered to accept, or a defendant is ordered to pay less than he offered to pay, then save in the case of small claims, severely adverse consequences may follow in costs, and also, for a defendant, in interest[7].

If a claimant fails at trial to better a defendant’s pre-trial offer, the court will, unless it considers it unjust to do so, order the claimant to pay any costs incurred by the defendant after the 21-day acceptance period (CPR36.20).

If a claimant at trial does better his own pre-trial offer, then the court will, unless it considers it unjust, (a) award the claimant interest on the whole of part of the amount awarded at a rate not exceeding10% above base rate for some or all of the period starting with the end of the 21 day acceptance period and (b) order the defendant to pay the claimant’s costs on an indemnity basis from that date together with interest (again at a rate not exceeding 10% above base rate) on those costs. Indemnity costs involve a more favourable basis of assessment - the onus being on the paying party to show that any particular item was unreasonable and there being no limitation (at least, express) by reference to proportionality.

In deciding whether it would be unjust to attach any of these consequences to a failure to beat an offer, the court takes all the circumstances into account including the terms of the offer, the stage of the proceedings when it was made, the information available at that time, and the conduct of the parties in giving or refusing information to enable the offer to be evaluated. The last consideration reflects the co-operative spirit in litigation at which English procedure aims, although, of course, always achievable (take the case of the reluctant or impoverished payer).

I am not aware of any comparable system of financial incentives in other European countries. I note however information that in Germany, where lawyers’ fees are regulated by statute, the legislature, in order to provide an incentive for lawyers to encourage settlement, raised the statutory settlement fees for lawyers from a full fee to 150% of a full fee[8]. The provision for indemnity costs is of course indirectly beneficial to the claimant’s lawyers, and so involves a similar incentive.

Alternative Dispute Resolution (ADR/Mediation) (CPR1.4(2)(e) – set out above). The court must not only encourage and facilitate ADR if appropriate, but, even more generally, it must help the parties to settle the dispute either in whole or in part (CPR1.4(2)(f)). In most cases ADR will mean mediation. The question of ADR will most commonly crop up at the stage when the case is allocated to a particular management track (or, on an appeal, when the court of appeal first sees the case). The parties are asked in the allocation questionnaires at the start of any proceedings whether they would like the action to be stayed for a month to allow an attempt at settlement either by ADR or otherwise. But the possibility of a stay for mediation (even a second mediation) may arise, and not infrequently does arise, at a later stage in the history of the action, when the issues and facts have become clearer, and the case (and the parties) may be more malleable. The power to order a stay for mediation can be exercised even where one party objects.  

Summary. Inevitably, I have, as I said, had to look at the position through the eyes of my own jurisdiction. But I have spent time with German judges, and seen how they address their duty to resolve proceedings. This is a duty which has been interpreted in a similar sense to the modern English rules. It requires them to consider and encourage the possibility of settlement, wherever this seems appropriate and without imperilling their position as impartial arbiters of the disputes before them, if no settlement is reached. I believe that judges everywhere have now to recognise that litigation to trial is often wasteful and avoidable, although sometimes of course very necessary. It is our duty to frame our procedures and our management of cases with that in the forefront of our minds. I believe that this conference will give us many mutually beneficial insights into the possibilities.

ANNEX C

TARGET DATES FOR CIVIL APPEALS

Dates effective from 1 March 2003

PRACTICE NOTE

COURT OF APPEAL, CIVIL DIVISION

LISTING WINDOWS AND HEAR-BY DATES

1.         The hear-by dates for different classes of appeal were last revised and published in the Court of Appeal’s consolidated Practice Direction [1999] 1 WLR 1027 which has since been superseded by CPR Part 52 and its supplemental Practice Direction.  In my review of the legal year 1999/2000 I announced that the hear-by dates for certain appeals, which had previously stood at 15 months would, from November 2000, be reduced to 12 months.  The table below sets out further reductions in hear-by dates reflecting the very substantial progress made by the Court in improving the service it offers litigants.  The longest hear-by date will now be 10 months and most considerably less.  These dates will apply to all appeals filed on or after 1^st October 2001.

2.         In the exercise of its case management responsibilities the Court will strive to ensure that appeals are generally heard within their listing windows, many of which have now been enlarged.  Applications for an expedited hearing will continue to be determined by a single Lord Justice or the Master in accordance with the principles set out in Unilever PLC v Chefaro Proprietaries Ltd (Practice Note) [1995] 1 WLR 243.  Applications for permission for a hearing date to be fixed beyond a hear-by date will likewise be determined by a single Lord Justice or the Master, but will be granted only for the most compelling reasons. 

28^th February 2003                                        Lord Phillips of Worth Matravers MR