Rules of Civil Litigation

The ethos of litigation is created by the rules governing litigation, the courts and the approach of participants in the system, including lawyers. Lord Woolf’s reform of civil litigation sought to create a more co-operative ethos.

A. Civil Procedure before the Woolf Reforms

Before the Woolf reforms lawyers had considerably more control of the civil litigation process. Prior to the Courts and Legal Services Act 1990 the overlapping jurisdiction of the High Court or the County Courts was often exploited by lawyers seeking the quicker procedures and generous fee scales of the High Court. The Act placed respon­sibility on lawyers for assessing the suitability of the case for the venue, giving courts encouragement to change the venue.

The High Court process began with an originating process, a writ or other docu­ment. A statement of claim could be included with the writ or followed shortly after. The defendant was required to acknowledge service. If they did not do so, judgment could be entered in default. Having, acknowledged service, the defendant could file a defence. The statement of claim and defence constituted ‘pleadings’. After a defence was filed, both sides could seek further particulars and the formal responses became part of the pleadings.

When the formal exchange of pleadings was complete, the parties provided lists of relevant documents that were or had been in their custody or control. These included those for which privilege was claimed. Inspection and exchange of documents fol­lowed. Completion of these steps meant that the case could be listed for trial.

Where standard directions applied, the court’s involvement in the preparation of cases was instigated by the parties. This might occur, if, for example, one side failed to deliver a document in the allotted time, or a claim for privilege was disputed, or an extra expert was required. In these cases, court directions tailored to the circum­stances of the case were issued by a judicial officer, called a Master. In most cases, no court involvement was required. In fact, most cases were settled. The litigation process provided a backdrop to negotiation. Trial was a default option if settlement failed.

The pre-Woolf system of litigation provided ample opportunity and incentive for lawyers to deploy strategies and tactics. Litigation strategies generally involve psycho­logical pressure on the opponent, manipulating the key variables of unpredictability, delay and cost. Repeat player defendants might slow down litigation hoping, for example, that claimants would lose interest or witnesses would disappear before trial. The approach calculated that many claimants would either give up or settle claims cheaply. They could use payment into court to increase the risk of litigation for claim­ants and the pressure on them to settle.

Claimants' lawyers might try to avoid the risks that their client may be pressurised into cheap settlements by proceeding rapidly with litigation, incurring as much cost as possible before payment in. This so-called ‘litigation first' strategy advanced cases nearly to trial as quickly as possible. It gave claimants a good negotiating position.

Prior to the Woolf reforms, changes to the civil justice system often suffered from a problem of unintended consequences. An example of this was preventing costs recov­ery in County Court small claims. This probably reduced legal assistance in bringing small claims^[2796] without necessarily increasing use of courts.^[2797] It may have encouraged procedural compromise.^[2798] The absence of potential costs penalties may have encour­aged ‘nuisance claims' or encouraged litigation. Small businesses often find that low costs regimes encourage chronic debtors to defend claims.^[2799]

To avoid unintended consequences, reformers must identify clear objectives and consider how they will be achieved. The pre-Woolf litigation system was seen to suffer from particular problems of delay and cost. Despite timetables for the various stages to be completed, there was often no pressure on either side to move swiftly. Delay was common and sometimes tactical. Piecemeal reforms had tried to increase efficiency and place tighter constraints on lawyers' discretion. Lord Woolf's brief was to exam­ine the whole civil litigation system and expand access to justice without additional public expenditure.^[2800]

B. The Woolf Reforms

i. Aims

Lord Woolf’s report concluded that the existing litigation system was costly and slow, and that lawyers exacerbated its faults by their behaviour.^[2801] It identified a substantial risk that the system undermined the competitive position of national courts in the global market for legal work.

The Woolf Report proposals, implemented in April 1999 with the CPR, were radi­cal by the standards of its predecessors, bringing together a host of ideas in a ‘big bang’. The CPR swept away the previous system, and the aims of the civil litigation system were newly articulated. Dealing with cases justly was conceived as ensuring equality of the parties, saving expense, ensuring expedition and fairness and allocat­ing appropriate resources. Procedures were to be proportionate to the issue, decisions were to be just and predictable, litigants were to be treated fairly, appropriate proce­dures provided and cases processed speedily.^[2804]

The CPR increased the transparency of the system and tightened up a number of existing procedures. For example, claimants would have to clearly state their case, or risk having it struck out,^[2805] and defendants give reasons for denying liability, and either deny, admit or require proof of each allegation.^[2806] Revised timetables and mechanisms for information exchange, disclosure and agreeing joint experts were introduced.

ii. Measures to Control Litigant Behaviour

a. Pre-action Protocols

The scope for using a ‘litigation first’ strategy was reduced by the introduction of pre­action protocols. Henceforth, these would have to be completed before litigation was commenced. Lawyers would be forced to disclose information early on so that parties were better informed before litigation commenced. This enabled defendants to value claims more accurately at an early stage and prevented claimants’ lawyers incurring litigation costs before settlement could be attempted.

b. Judicial Case Management

One of the key strategies of the new regime, judicial case management, shifted the responsibility for controlling bigger and more complex cases from lawyers to judges. Judges were to take a much more proactive role, forcing the pace of cases and facili­tating settlement by encouraging mediation. The allocation questionnaire allows par­ties to seek a month’s stay of the operation of the timetable to allow for settlement efforts.^[2807] Judges were key to implementing one of the most important principles introduced by the CPR; proportionality. This concern reflected the fact that in over 40 per cent of claims for £12,500 or less the costs exceeded the amount in dispute. Procedures were therefore matched to the sums involved, the importance of the case, the complexity of the issues and the financial positions of the parties.

In order that cases received proportionate treatment, the court structure was recon­figured, with the introduction of three tracks. A small claims track was for low value cases, currently those below £10,000, a fast track for those with higher value and multi-track, currently for cases valued over £25,000.^[2808] Both sides complete a direc­tions questionnaire shortly after defence is filed, so that the court could place cases on one of the three tracks.^[2809]

Fast track cases were heard in the County Court. The fast track incorporated fixed timetables and a fixed cost regime. Once the case had been allocated to the small claims track or fast track the fixed timetable applied. On the fast track, the target was to reach trial within 30 weeks. Trial hearings were kept to one day by dispensing with openings by lawyers and having witness statements stand as evidence in chief. Multi-track cases were heard in the High Court only and subject to individual case management by the judge.^[2810]

The courts’ responsibility to manage cases actively included, inter alia, encouraging the parties to co-operate in conducting the proceedings.^[2811] The parties, and their rep­resentatives, were obliged to ‘help judges’ with furthering the overriding objective.^[2812] Directions most suited to the particular case were made following allocation to the multi-track. Experts could only be called in the court’s discretion^[2813] and the order was likely to be that they be jointly appointed, except for multi-track cases.^[2814] Joint experts owed an overriding duty to the court rather than the party paying their bill.^[2815]

c.

One of the policies promoted by the CPR was promoting settlement. Particular empha­sis was placed on alternative dispute resolution (ADR), particularly mediation. Courts were allowed to suspend the proceedings for a period to allow the parties to hold settle­ment discussions or pursue ADR. This is considered further in chapter twenty.

d. Rules on Awarding Costs

The rules on costs were changed to enable the court to penalise litigants as appropriate. While the principle that costs follow the event was retained, the discretion was refined. The court was to consider the conduct of the parties and their success in different parts of the case.^[2816] In 2007 the requirement for formal payment into court of a sum offered in settlement was removed from Part 36. Thereafter, claimants were poten­tially at risk on costs when they refused a reasonable offer even in the period before commencement of litigation.^[2817]

Decisions in early cases showed willingness to sanction aggressive litigants, those leaving ‘no stone unturned’ or acting unreasonably.^[2818] In MBI Incorporated v Riminex Investments,^[2819] for example, a landlord’s rejection of proposed terms, including rent, was found to be unreasonable. The landlord was ordered to contribute towards costs the tenant had incurred since making the settlement offer.

e. Wasted Costs Orders

The CPR specified a procedure for making wasted costs applications. It required iden­tification of what the legal representative was alleged to have done or failed to do. It also required the applicant to specify the costs sought from the legal representative.^[2820] The court then considered, first, whether there was evidence or other material which, if unanswered, would be likely to lead to a wasted costs order being made and whether the wasted costs proceedings were justified, notwithstanding the likely costs involved. Then, having heard from the accused lawyer, in writing or at a hearing, the court considered whether it was appropriate to make a wasted costs order.^[2821] The burden of showing that a wasted costs order should be made was placed on the applicant.

iii. The Impact of the Woolf Reforms

An important goal of the Woolf reforms was to change the litigation culture. The courts were to construe the CPR in light of the overriding objective of doing jus- tice.^[2822] Contemporaneously, the right to conduct litigation was subjected to duties ‘to the court to act with independence in the interests of justice and to comply with the rules of conduct of the authorising body’.^[2823] These duties were to ‘override any obligation which the person may have (otherwise than under the criminal law) if it is inconsistent with them’.^[2824]

Under the new ethos of ‘doing justice’, litigants were less likely to be denied access to the courts for technical, procedural breaches.^[2825] There was a higher expectation that lawyers would help the other side correct technical errors.^[2826] They could expect to be criticised for correspondence that might antagonise.^[2827] There were, however, mixed messages on the control of expense. For example, on one hand, it was decided that parties could not be prevented from hiring expensive lawyers because their opponents could not afford to.^[2828] On the other, some judges showed interest in limiting costs where one side had exercised restraint.^[2829]

The CPR was probably responsible for an immediate and dramatic reduction in the workload of the High Court by up to 80 per cent.^[2830] This might have been due to cases being delayed by the need to complete pre-action action protocols, earlier settlements and the transfer of business to the County Courts. This reduction in the volume of civil cases in the courts appears to be consistent and permanent. The argument that this, in fact, represents a denial of justice^[2831] is only one possible criticism of the Woolf reforms.

iv. Criticism of the Woolf Reforms

It was predicted that the Woolf reforms would result in a general deterioration of the court system, including less accurate judgments.^[2832] Some critics suggested, how­ever, that the reforms did not go far enough. In 2003, Mr Justice Lightman argued that, if the aim was to reduce the cost of litigation, the adversarial model could not be fixed.^[2833] Its use makes cost inevitable. Lawyers are expensive because they have to keep abreast of voluminous case law and analyse, collect and present evidence. Lightman J proposed that the only solution was to implement the inquisitorial sys­tem, relying on the skill and training of judges rather than that of lawyers generally.

Calls for consideration to be given to the introduction of an inquisitorial system were repeated in 2014, in the light of a continued boycott of courts by barristers. Lord Thomas, the most senior judge in England and Wales, said that an inquisitorial system would be an improvement for litigants in person. Such a change would involve ‘a greater degree of inquiry by the judge into the evidence being brought forward’.^[2834]

The fall in the numbers of High Court cases suggested other possible, negative consequences of the Woolf reforms. Speeding up cases reduces time for preparation, favouring wealthy clients whose lawyers can mobilise resources quickly^[2835] and poten­tially increasing inequality. The front-loading of preparation imposes investigation and disclosure costs, even on cases that might have settled without.^[2836] Lord Woolf did not think it a problem that the pre-action protocols could be an impediment to bringing viable claims. He argued that ‘the courts should not be used merely as part of the tactical equipment of a macho lawyer’.^[2837]

One of the aspects of Woolf’s report that did not prove particularly contentious was the promotion of mediation. There were very practical reasons why it might have been so. If settlement does not follow, mediation is an additional cost of the pro­ceedings. Even if settlement does follow, it is difficult to show that it was as a result of mediation. In fact, in some contexts, settlement rates and times may not change, except for the worse, as a result of mediation.^[2838]

The earlier experimentation with ADR in the USA drew a sustained and trenchant critique of mediation and settlement for other reasons.^[2839] The thrust of this criticism is the potential for the law to lag behind social developments when a common law sys­tem is denied the access to cases. This effect can be exaggerated if so-called ‘irrational’ claimants are forced to funnel their cases down a mediation route^[2840] and companies are able to deflect and ‘buy off’ claimants whose cases could set precedents.^[2841]

It is arguable that the Woolf reforms promoted the quick and easy determination of large numbers of cases, placing ‘access to justice’ over procedural justice as a priority of the system. This downgraded one of the courts’ main functions in policy imple­mentation, that of producing standards for governing society.^[2842] The general mistrust of lawyers that underpinned the reforms led to the imposition of tighter controls. Lawyers, wrapped in a blanket of controls, lost the flexibility to engineer settlements quickly and expeditiously.

C. The Jackson Reforms

Lord Justice Jackson’s reforms continued in the direction that Woolf set, in par­ticular by tightening judicial control over litigation. The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO 2012) and the new CPR implemented most of Jackson LJ’s recommendations regarding costs in civil litigation from April 2013. These are dealt with more fully in chapter twelve. LASPO 2012 introduced damages-based agreements (DBAs) and extended the requirement to use the online portal for personal injury claims. It banned referral fees for personal injury cases and ended recovery of after the event insurance premiums. Following LASPO 2012, the CPR were substantially revised. Changes included amendments to existing practice on costs and case management rules.

The Jackson reforms included many refinements in the use of costs to ensure the efficient and fair conduct of litigation. As regards efficiency, under the cost budgeting rules, litigators must make a realistic assessment of costs at the start of a case and stick to them.¹⁴⁴ They may lose the right to recover any costs if they do not conform to the requirements exactly.¹⁴⁵ As regards promoting fairness, the qualified one-way costs shifting (QOCS) regime introduced in personal injury litigation is built on the assumption of proper conduct. Personal injury claimants’ protection from costs liabil­ity depends on claimants’ proper behaviour, and that of their representatives.

One of the refinements introduced in the new rules is to CPR Rule 3.9. This for­merly required the court consideration of nine factors when considering whether to relieve a party of costs sanctions. Under the new rules these have been reduced to two. Therefore, in considering whether to give relief from any sanction for failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case including the need (i) for litigation to be conducted effi­ciently and at proportionate cost and (ii) to enforce compliance with rules, practice directions and orders.¹⁴⁶

VI.