Our latest whistle-stop tour through recent news and decisions on litigation and alternative dispute resolution procedures.

Update on litigation procedure

Rebranding of the specialist civil courts

The rebranding of the specialist civil courts was postponed until early July on account of the snap election. The first launch of the "Business and Property Courts of England and Wales" took place at the Rolls Building in London on 4 July and other launches have since followed in Birmingham, Leeds, Manchester, Bristol and Cardiff. The "go-live" date for all the courts is 2 October 2017.

In his speech at the London launch, the recently appointed Lord Chancellor, David Liddington, welcomed the changes. They represent more than a mere update of the name: a "more integrated system of business and property courts will mean judges can be cross-deployed to maximise the benefit of their particular qualifications. … Having business and property courts across England and Wales that are served by a critical mass of specialist judges will mean that all classes of case should be capable of being managed and tried away from the capital."

You can read the Lord Chancellor's full speech here.

E-filing has been compulsory in the Rolls Building in London since 25 April 2017. All claims and applications must now be filed electronically in the Chancery Division, Commercial Court, Technology and Construction Court (TCC), Companies Court, Mercantile Court and Admiralty Court. Documents can be filed 24 hours a day from anywhere and are sealed with the date they are filed. The system allows parties to keep up to date with the progress of their case. It should also lead to improved efficiencies at court.

A guidance note on public procurement cases prepared by judges of the TCC and the Procurement Lawyers' Association, including Keating Chambers, was launched on 17 July 2017 at the Rolls Building in London. The note will be added to the TCC Guide as a new Appendix H.

Part of the draft form of the guide has already received judicial approval in Bombardier Transportation Ltd v. Merseytravel [2017] EWHC 575 (TCC). The case involved issues about the confidentiality of statements of case  a key concern for bidders who want to keep valuable tender information safe. (Our article on Bombardier will appear in Construction News later this week. In the meantime, you can read our procurement colleagues' short summary of the issues raised here: Access to confidential information and court documents in procurement cases.)

The new Pre-Action Protocol for Debt Claims will come into force on 1 October 2017. The protocol applies to any business (including sole traders and public bodies) claiming payment of a debt from an individual (including a sole trader) and sets out the conduct the court will normally expect of those parties prior to the start of proceedings.

The protocol requires the creditor to send a clearly dated letter of claim to the debtor by post with an up-to-date statement of account (including interest and charges), a reply form and a financial statement, which must be attached to the letter and the contract if requested. The creditor then has to wait 30 days before commencing legal action and, if the debtor proposes payment by instalments, must take into account the debtor's financial circumstances when responding. Early disclosure of relevant documents and information as well as ADR is encouraged. The sanction for non-compliance is the same as for other protocols. (Note: the protocol does not apply where the debt is covered by another Pre-Action Protocol such as the Construction and Engineering Protocol.)

Pilot to test whether a scheme for fixed recoverable costs will work

In the May meeting of the Civil Procedure Rule Committee (CPRC), a voluntary two-year fixed recoverable costs pilot scheme was agreed. The pilot is designed to test a capped costs scheme in some of the specialist civil courts in London, Manchester and Leeds. It will apply to claims under £250,000. The aim is to ensure that costs are more certain, transparent and proportionate with the level of recoverable costs currently ranging from £18,750 for a £25,000-£50,000 claim and up to £70,250 for a £175,001-£250,000 claim. Needless to say, there is disagreement from some on whether the value of the claim should be the sole determinant.

Arguments about the scheme vary from supportive (everyone will know how much they will win or for how much they are liable) to concerned (a party should be able to recover all their costs as they otherwise will not be able to afford representation). These questions and others relating to the pilot are currently under review by Lord Justice Jackson, who is expected to report on it by 31 July 2017. A government consultation will follow Jackson LJ's report.

Mandatory use of new format Bill of Costs delayed until 2018

Having agreed earlier this year that a new format Bill of Costs would become mandatory in October 2017, the CPRC has now agreed to delay the introduction of the Bill of Costs until 2018. The new Bill of Costs, which is currently being tested under the pilot scheme set out in Practice Direction 51L, has two parts: a bill and an electronic spreadsheet. Parties will be required to complete both. A model spreadsheet is available although parties can use their own.

The Ministry of Justice (MoJ) recently suggested a change to flexible operating hours in six pilot courts (civil, Magistrates' and Crown) to make the courts more accessible. It was hoped that such flexibility would improve access to justice for court users. The proposals stirred up a wave of protest from many court users and prompted a petition against the proposals  not least because, it is argued, extended court hours would affect those with caring responsibilities and would reduce the already limited time left at the end of the day to prepare for the next day's hearings.

The pilot was originally expected to start in May 2017 but was postponed when the snap election was announced. While the MoJ's position is that it will evaluate how flexible court hours affect court users before any decision is taken on rollout, the online petition continues to attract support.

The reform of the civil justice system continues and Sir Terence Etherton (Master of the Rolls) addressed the background to the reform programme, the nature of the reforms and their challenges in the Lord Slynn Memorial Lecture on the future of the civil courts on 14 June 2017.

Key elements of the reform include the development of online courts with a focus on ADR and problem-solving; the use of technology to improve efficiency and accessibility and reduce costs for both practitioners and court users; and the use of plain English that can be understood by litigants in person, all of which will make the court system more able to deliver equality for those using the justice system.

English law after Brexit

Two recently published papers are of interest in connection with the impending Brexit.

The first is the 6th Scarman Lecture delivered by Lord Thomas of Cwmgiedd, The Lord Chief Justice: "Law Reform Now" in 21st Century Britain: Brexit and Beyond (26 June 2017), in which he examined the effect of Brexit on English law and the challenges of the digital age from a legal perspective. (We touch here only on the former.)

Lord Thomas explained: Brexit is "probably amongst the biggest peacetime issues that the UK has ever faced and without doubt the most complex in legal terms. One consequence of the United Kingdom's decision to leave the European Union is that it faces the prospect that large parts of its law will need to be subjected to detailed scrutiny and potentially wide-ranging amendment, with other parts of the law only made subject to minor revision. Given the extent of European Union law and its integration into domestic law since 1972, the task is enormous in scale. It will call for reform on a [wide] scale … "

If you are considering choice of law clauses in the face of Brexit, the second paper of interest is the Chancery Bar's publication: English Law, UK Courts and UK Legal Services after Brexit: The View beyond 2019. This paper promotes the strength of English Law and the court system and explains: the advantages of English Law; how the UK courts serve a wide range of business sectors; the high quality of contract drafting and dispute resolution services; reasons to litigate/arbitrate in London; and the enforceability of UK judgments and arbitration awards.

In these uncertain times, the Chancery Bar concludes its paper by reminding us of the importance of the Rule of Law in our society:

"The Rule of Law represents the cornerstone of liberty and democracy, and is one of the main reasons that the UK attracts global businesses and investors. Laws in the UK are: public (so that everyone knows what they say); certain (so that everyone knows where they stand); and prospective rather than retrospective (so that they cannot be broken before they exist).

The English courts are universally recognised to be a forum where litigants can be confident that their disputes will be determined fairly on their intrinsic merits. That will not change following Brexit."

Adjudication Focus

A recent case involving Aecom has highlighted how difficult and expensive it can be to challenge an adjudicator’s decision. Click here to read more. While the temptation to challenge a wrong decision can be strong, parties should carefully consider their options: the grounds for challenge are limited to breaches of natural justice or an adjudicator acting beyond his/her jurisdiction and these are increasingly difficult to establish. (First published in Construction News on 4 July 2017)

Get your ducks in a row if you want to challenge an adjudicator's decision

Soon after the Construction Act was enacted, the courts sensibly recognised that a "slip rule" could be implied in adjudications to allow adjudicators to correct minor clerical and typographical errors in their decisions. However, asking the adjudicator to correct his decision under the slip rule could lose you the right to challenge the decision on jurisdictional or natural justice grounds – as the defendant found to its cost in Dawnus Construction Holdings Ltd v. Marsh Life Ltd [2017] EWHC 1066 (TCC). Parties who want to challenge an adjudication decision should expressly reserve their rights to do so if requesting the correction of errors under the slip rule.

Click here to read more.

While disputes referred to adjudication have become increasingly complex, the fundamental principles remain largely unchanged – an adjudicator's decision will be binding on the parties and enforceable unless there is an exceptional circumstance. We examine two recent enforcement decisions, which deal with the position where a party wishes to rely on an exceptional circumstance to dispute the jurisdiction of an adjudicator:

  • "No déjà vu here" (Universal Piling & Construction Ltd v. VG Clements Ltd [2016] EWHC 3321 (TCC))
  • Dispute jurisdiction? Say so (quickly and repeatedly) (Imperial Chemical Industries Limited v. Merit Merrell Technology Limited [2016] EWHC B30 (TCC))

Click here to read more.

Recent articles (mediation, judicial intervention and expert independence)

Just get on with it: more reasons to mediate (and a look at some of the excuses people use to avoid ADR)

The courts can sanction parties who unreasonably refuse to mediate their dispute or who fail to mediate where it is appropriate. So why do some parties still plough on with litigation or arbitration proceedings? In this article, we review a recent example of the court's support for the mediation process and summarise the incentives for disputing parties to mediate. We then take a look at some of the reasons parties commonly use to justify a refusal to mediate and offer some suggestions to help parties reconsider. Click here to read more.

How much can a judge intervene in cross-examination before a trial becomes unfair?

Lord Justice Jackson's reforms to the Civil Procedure Rules (CPR) enabled judges to take a more active part in case management: they can manage the parties' costs budgets, control the timetable, limit expert evidence and impose sanctions on parties who flout the rules or court orders. Litigators have grown accustomed to robust judges exercising these wide powers to ensure proceedings are conducted justly and at proportionate cost. But there are limits to these judicial powers: judges cannot, for example, join in the cross-examination of witnesses without risking actual or perceived unfairness. Click here to read more.

Construction disputes are frequently technical in nature and depend upon expert evidence. Often, expert evidence is necessary to establish whether a claim exists at all. As a result, an expert may be instructed early, before any decision has been made as to whether the dispute should be referred to arbitration, litigation or even adjudication. When a matter is decided, the arbitrator, court or adjudicator will often depend on the expert evidence in reaching conclusions. Click here to read more.

This round-up was prepared by Philip Vickers, senior associate, and Tracey Summerell, practice development lawyer in the Construction team.