Civil litigation – the new rules of engagement

The Woolf Reforms - Caroline Day examines the impact of the reforms since their introduction earlier this year

The largest wholesale change in civil procedure in England and Wales since the Judicature Acts of 1875 united the courts of Chancery and Equity was marked on 26th April 1999 by the introduction of the Civil Procedure Rules (CPR) or “Woolf Reforms” as they are fondly referred to in deference to their author, Lord Woolf. The “Overriding Objective” which underpins the CPR is an attempt to redefine civil justice in terms of speed, economy and proportionality, by allowing the Court to deal with cases justly, meaning in so far as practicable:

• Ensuring that the parties are on an equal footing;
• Saving expense;
• Dealing with cases in ways which are proportionate to the amount of money involved, their importance, the complexity of the issues and the relative financial position of each party;
• Ensuring that they are dealt with expeditiously and fairly; and
• Allotting to them an appropriate share of the Court’s resources whilst taking into account the need to allot resources to other cases.

It is the duty of the Court to give effect to the Overriding Objective and of the parties themselves to assist in furthering it. As a corollary to this, the Court has an obligation to encourage and the parties are expected independently to explore the possibility of settlement at all stages of the proceedings.

The Court also has an obligation actively to manage its cases. This means that it will no longer be left to the parties to determine the pace at which they pursue proceedings. Parties who ignore the instructions of the Court do so at their peril - both in terms of control over their cases and in the “adverse consequences” they face for failing to adhere to the Court’s orders - at worst your case will be struck out, at best you will have to pay the other party’s costs.

To herald the new era, new terminology has been introduced which sees the demise of such terms as Writ, Plaintiff, Pleading, Discovery and Taxation. In its place come Claim Form, Claimant, Statement of Case, Disclosure and Assessment of Costs. Anton Pillar orders and Mareva injunctions disappear in favour of search orders and freezing injunctions. Latin is banished along with the previous procedural differences between the High Court and the County Courts. The aim is to deconstruct the mystique that was civil litigation.

The CPR are predicated on the notion that the involvement of the Court in the resolution of disputes should be a last resort. Potential litigants and their legal advisers are to think carefully about the merits of a claim before embarking on it. You must be able to put forward a coherent case supported by evidence as soon as you begin. Even if you have a meritorious case, settlement is encouraged at every stage.

A Statement of Truth is now required on all statements of case and evidence verifying that the party (or witness) confirms its belief that the facts stated in that document are true. If it is not, and a false statement of truth is given with an honest belief in its truth, it will be contempt of Court which is punishable by imprisonment.

The Overriding Objective is clearly articulated throughout the CPR. Pre-action Protocols have been introduced. Although they currently cover only personal injury and clinical negligence claims they are eventually expected to cover all proceedings. Their philosophy is that if you wish to litigate, you must put forward your case at the earliest possible stage in order to allow the parties to understand the respective strengths and weaknesses of their own case and encourage compromise.

Even where Pre-action Protocols do not formally apply, the parties are expected to adhere to their philosophy. As a result, a certain amount of “front loading” will be required so that even before commencing proceedings a claimant is expected to have done much of its case preparation and to have explored actively the possibility of settlement. A potential defendant too will have to get its case in order at a much earlier stage.

Once you commit to proceedings, the active case management powers of the Court mean that it will not be open to either party to stall progress. You must follow the procedural steps set within the timetable set by the Court. If you do not you will be penalised. A major feature is the allocation of cases to one of three “tracks” - small claims (for claims below £5,000.00) in value, fast track (for claims up to £15,000.00), or multi-track (for all other claims). In crude terms, the less valuable and more straightforward your case, the quicker you will be required to deal with it.

Landlords and tenants have been immediately affected by the changes. For instance, joint applications to the Court to exclude the protective provisions of the Landlord and Tenant Act 1954 from a business tenancy was once a pain -free experience. The CPR have necessitated a Practice Direction to deal with the problems brought about by the reforms. They still remain. We have encountered difficulties in identifying the correct signatory of the Statement of Truth given the wealth of different structures our clients enjoy.

Similarly, applications for a new tenancy under the same Act are governed by the CPR. This is not “voluntary” litigation as it is required by statute, however the CPR do not distinguish this from other proceedings. Although it is hoped that the parties may stay the progress of proceedings to allow negotiation (as is the norm, particularly in unopposed renewals), the Court may still seek actively to manage them.

The immediate effect of the CPR has been the sharp decline in the number of proceedings issued after 26th April. The longer term effect is yet to be seen as both practitioners (and their clients) grapple with the new rules. The property litigation team has already put in place cost effective strategies to deal with the reforms and, overall, the future remains a positive one for civil litigation.