Date 4 December 2007
Calls for clarity on e-disclosure
A survey by KPMG Forensic has found that lawyers are highly concerned with the ambiguity over e-disclosure rules. Those surveyed suggested that they regarded business emails, word documents and excel spreadsheets as significant, but that text messages are insignificant, whereas in reality these may have a huge part to play in the outcome of a hearing.
The survey found that 48% of those questioned believe that judges and masters are unable to make effective case management decisions regarding e-disclosure and that they should be trained in doing so. In addition to this call for training, the lawyers suggested that more clarity and guidance was needed on the Civil Procedure Rules (CPR) stating which documents and information were to be disclosed and in which cases. 68% of the lawyers surveyed believed that the establishment of an independent training body of industry practitioners would assist in promoting best practice and training in dealing with the disclosure of electronic documents and that this would in time reduce the ambiguity that currently exists.
Paul Tombleson, Head of Forensic Technology at KPMG Forensic said that “e-disclosure, as technical as it may seem, is in many ways at the heart of the modern litigation process, so it is clearly of great importance that the issues lawyers have raised here are debated, discussed and acted upon.” This survey only goes to suggest that there are struggles with the compatibility of the CPR and the constant changes affecting the process of litigation.
Invoking legal privilege against a request for disclosure under CPR 31.14
The judge in the case of Expandable Limited and Ors v Rubin [2007] EWCH 2463 (Ch) has confirmed that there has been no change in the effect of the replacement of the RSC Order 24 Rule 10 with CPR 31.14. The earlier rule allowed for the possibility of claiming legal privilege in respect of a document mentioned in a statement of case, witness statement, witness summary of affidavit and this recent decision confirms that this is still an available option to a party concerned in the disclosure process.
Mediation saves UK businesses £1 billion a year (and only costs £8 million)
The Centre for Effective Dispute Resolution (CEDR) has stated that the commercial mediation profession this year will save over £1 billion in wasted management time, damaged relationships, lost productivity and legal fees. Their research has shown that the total fee income of the profession is around £8.2 million. These findings can only be seen as favourable to the mediation profession and CEDR itself, and no doubt they will be hoping that they encourage the use and success rate of mediation services in settling disputes. The value of cases mediated each year is approximately £4.1 billion and looks set to rise following the positive outcome of such research. The research undertaken by CEDR continues from that which took place in 2003 and 2005, allowing them to identify changes in the market for mediation and the attitudes of mediators themselves.
The research also looked at mediators personal backgrounds, their mediation practice and experience and the vital factors in achieving success in mediation. Findings showed that there has been an increase of 33% in the use of mediation since 2005 – there were approximately 3,700 mediations in the last year; that ‘top’ mediators were able to command the sum of £3,120 per day for their fees and that 13% of mediators were able to earn £282,000 or more per year (£177,000 in 2005); that 75% of mediated cases settles on the day, with 13% settling shortly after which provides for an combined settlement rate of 88%; and that 58% of mediators suggested that there be an independent regulatory body setting and monitoring the professional standards of practice and also dealing with any complaints about mediators.
Judicial decisions favour contractually-agreed dispute resolution mechanisms
Three decisions this year have emphasised the support by the courts of dispute resolution provided for in contracts.
In Sunrock Aircraft Corporation v Scandinavian Airlines System Denmark-Norway-Sweden (SAS) [2007] the Court of Appeal said that damages could be awarded for a loss incurred by a failure to comply with the terms of an alternative dispute resolution clause in addition to those usual damages awarded for the breach that led to the dispute. The second case of Harper v Interchange Group [2007] emphasises the expectation that the parties involved will respect the clauses in their contract which provide for alternative dispute resolution. Mr Justice Aikens went on to say that these clauses should be followed and upheld wherever possible. His judgment now clearly sets out the approach the courts will often take in relation to breach of these clauses and shows that not adhering to them could afford serious consequences at trial, as well as proving the courts’ commitment to promoting alternative dispute resolution.
In October 2007 the House of Lords decision in Premium Nafta Products Ltd (20th defendant) & Ors v Fili Shipping Company Ltd & Ors [2007] UKHL 40 strongly favoured a clause whereby parties had agreed to arbitrate in the event of a dispute, saying that this clause covered any dispute between the parties, including disputes regarding the validity of the contract itself. It would seem that whilst many welcome the dedication if the courts to alternative dispute resolution, there are still those who feel that it may not be the most effective way of solving some difficult individual issues.
Commercial Court Symposium
Case management procedures in the light of the collapses of the BCCI and Equitable trials were examined by the Commercial Court in their symposium on 30 October 2007. The Court wanted to ascertain whether the failures had resulted in a negative light cast over its international reputation because of imperfections in its practice or procedure.
The event, chaired by Mr Justice Steel was attended by approximately 100 individuals including judges, barristers, representatives from leading litigation firms and commercial clients. Prior to the symposium Justice Steel had sought written opinions from those invited to the event on their thoughts and impressions of the civil justice system. None had expressed concern over systematic problems in the way the Court conducted itself in respect of complex and ‘heavy’ litigation or that a separate procedure be adopted to help cope with the burdens of ‘supercases’. The guests opinions did serve to highlight a few suggested improvements, which included amongst others, judges being exclusively assigned to particularly ‘heavy’ cases and having enough pre-reading time in order to be fully aware of the way the case has proceeded up to a certain point.
The symposium was a positive event, with Mr Justice Steel commenting that a working party would be established to look at the issues raised during the evening. He also issued a press release stating that suggestions considered as ‘key’ to general improvements in the Court would be adopted into the Commercial Court guide.
In terms of the international reputation of the Court, it was felt that the Commercial Court in London was considered as one of the very best places in the world for disputes to be heard.
When can the High Court review the decision of a County Court judge?
In Strickson v Preston County Court and others [2007] EWCA Civ 1132 the Court of Appeal considered an appeal against refusal by a High Court judge to allow a judicial review of a decision in the County Court. On looking at the decision of the High Court not to allow the judicial review the Court of Appeal set out the instances in which a High Court judge can judicially review a County Court decision. It was confirmed that these opportunities were exceptional and limited to situations whereby the judicial process itself had been frustrated or corrupted.
In Strickson the Court of Appeal dismissed the appeal as there had been no frustration or corruption, and held that a distinction must be drawn between cases where the judge simply gets the decision wrong and those in which the judicial process has been frustrated or corrupted. It was emphasised that the courts must be careful to ensure that only those exceptional cases are allowed to proceed to judicial review. Additionally, the Court of Appeal set out examples of which types of cases may be seen as exceptional: cases where the court below has been in territory it should not have been in, where there has been a clear breach of the rules of natural justice or where there is some gross procedural failure or where public interest considerations exist, and if none of these apply then even if the judge was wrong in his decision, it does not justify the decision being referred to judicial review.
The authority was always intended to echo the fact that the judicial review process was not meant to override the appeal process, and the Court of Appeal’s decision here reflects this.
Relationship between wasted costs orders and “difficult financial circumstances”?
An extraordinary decision taken by the judge in R (on the application of Eugene Hide and others) v Staffordshire County Council [2007] EWHC 2441 (Admin) has seen the financial circumstances of a solicitor advocate taken into account and used as the basis of a refusal to award a wasted costs order. The judge found that there was a ‘significant risk’ that a wasted costs order would cause the solicitor advocate to become bankrupt and that this would have been a disproportionate consequence. The three stage test under CPR 48.7 asks the court to look at:
- whether the legal representative has acted improperly, unreasonably or negligently
- whether their conduct has caused a party to incur unnecessary costs
- if so, is it just in all the circumstances to order him to compensate the party for the whole or part of these costs.
The judge in the case at hand found that the first two limbs of this test were satisfied, but on taking into account the financial circumstances of the solicitor advocate the third limb could not be. It would appear that this is the first decision where the personal circumstances of the legal representative have been taken into account when deciding whether or not a wasted costs order should be granted, as the process would usually involve the applicant proving that the conduct of the legal representative justifies the making of a wasted costs order.
Note that there is a possibility of this decision being appealed.
For further advice or guidance, please contact Robert Ryall on 01727 798092 or by email at robert.ryall@salaw.com
© SA Law 2007
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