The Woolf Reforms - new rules in the courts from 26 April 1999

United Kingdom


On 26 April 1999 the "Woolf reforms", named after Lord Woolf, the Master of the Rolls, will come into effect. Virtually all civil matters will be affected.



The new Civil Procedure Rules ("the Rules") follow a lengthy process of consultation, discussion and drafting that started back in 1994 and resulted in publication of Lord Woolf's "Access to Justice" report and a first draft of the new rules in 1996.



Overriding objective



The Rules are based upon an "overriding objective" that the courts deal with cases justly. The new rules are to be applied with the intention of ensuring that


  • the parties are on an equal footing
  • a close eye is kept on the cost of the case
  • treatment of the case is proportionate to the amount of money at stake, the importance and complexity of the case and the parties' financial situation
  • the case is dealt with speedily and fairly
  • the case is allocated an "appropriate share" of the court's resources, taking into account the needs of other cases in the system


This overriding objective is to form the basis of the court's decisions and actions. In particular, the court must have regard to the objective when exercising any discretion given to it by the Rules and when it interprets the meaning of any Rule. This objective will apply in proceedings in the High Court, County Court and the Civil Division of the Court of Appeal. There are no plans at present to merge the various courts.



"Active" Case management



In addition, the courts are obliged to "further the overriding objective by actively managing cases". This will result not only in exhortations from the court to identify the issues in dispute at an early stage but also in greater encouragement of parties to make use of alternative dispute resolution mechanisms. It also means that the court is being encouraged to use its powers to alter time limits, adjourn hearings, consolidate proceedings, order split trials, strike out particulars of claim or defence to this end. The court will also be able to strike out a party's case for failure to comply with the court's orders.



Clearly these are powers whose effect can only be gauged once the judges have begun to put them into practice. But we should all take note of the recent warning from the head of the civil justice division at the Lord Chancellor's Department that the "knives are being sharpened" by the judges preparing to exercise their new powers to discipline parties in breach of the rules.



There are complex transitional provisions to cover those cases commenced before 26 April 1999. Their object is to ensure that all cases are brought within the new Rules as soon as possible.



Case management tracks



A major feature of active case management is the creation of three "tracks", to one of which each case will be allocated:


  • small claims track
  • fast track
  • multi-track


Allocation to one of the tracks will be based on the parties' responses to an "allocation questionnaire", which will enable the court to ascertain the most appropriate track for a case. Factors which the court will take into account include the complexity of the dispute, the amount of oral evidence required, the number of parties and the existence of any counterclaims. The starting point for the court's deliberations will be the value of the claim, excluding interest.



The small claims track is to be the normal track for any claim with a financial value of up to £5,000. The small claims track is also suitable for personal injury claims of up to £1,000 in value and landlord/tenant repair disputes, up to a value of £1,000.



The fast track is the normal track for any claim with a value of up to £15,000 and for which the small claims track is not the normal track. There is a further qualification in that fast track claims should only lead to a trial of one day in length, with limited expert evidence.



A multi-track case is one for which neither the small claims nor fast track is the normal track. It will give the court sufficient flexibility to deal with cases of widely differing values and complexity.



What does this mean for lawyers and clients ?



It is clear that these new Rules will result in a fundamentally different approach from the courts to the way in which litigation is handled. Many of the changes are unpredictable, but the new rules give some guidance as to how things will change.


  • Discovery becomes Disclosure


At present preparation of a case for trial includes the process, often lengthy and expensive, of "discovery". Each party lists the documents it has which relate to the dispute in some way and makes them available for inspection. Frequently "satellite litigation" will ensue about the extent of discovery given and the possible existence of other documents not yet disclosed.



This will change. From April 1999 in most cases the court will order "standard disclosure" which will require a party only to disclose those documents which support his claim and upon which he relies, and those which may harm his or his opponent's case. In trying to find the latter a party's search need only be "reasonable" and reasonableness will be judged in the context of the claim as a whole.



The new "standard disclosure" is to be welcomed as a victory for common sense, since it will reduce the length and expense of the current discovery and inspection process. Moreover, we can also look forward to much shorter trial bundles, which will focus only on those issues actually in dispute.



The court will be able to order further disclosure in appropriate cases.


  • Judicial intervention


In view of the imminent introduction of active case management the Lord Chancellor's Department has organised training days for the judiciary throughout the country. These have included not only pilot case management seminars for judges, but also seminars involving judges and court service managers. The results of this training will become clearer in time. However, there are a number of concerns which have not yet been addressed. For example, to what extent will the court take into account the commercial realities of the dispute, which may not be apparent from the court file ? If negotiations are underway but proceeding slowly, will a court allow its timetable to be "ignored" with impunity or will the judge seek to intervene ? If he does, will he push the parties to an over hasty and unsatisfactory settlement outside the court or force them to continue with the litigation ?



Further, will there be sufficient IT support in place to enable the courts to manage a case actively ? Latest estimates suggest that full technological support for the reforms will not be in place until early 2000. In these circumstances judges and court staff may find it difficult to meet the challenges posed by the reforms without sacrificing the quality of their service.


  • Parties' conduct


For most the need to litigate is not something to be welcomed. But, once involved it is possible for the dispute to take on a life of its own. Where this happens parties sometimes lose sight of the real issues and seek to use the rules of the court to their tactical and commercial advantage.



This too will change. Parties are now expected to help the court in furthering its overriding objective. Where they do not the court can enforce compliance. The court can do so by means of costs orders, by preventing reliance on certain evidence at trial and, more seriously, by striking out a party's statement of case.



Overview



Rather than simply reproduce the text of the Rules we have set out below, in table format, the key rules. The table is by no means exhaustive but seeks to sketch out the key stages of a typical case and the new Rules which will be applicable.




SUMMARY OF THE NEW CIVIL PROCEDURE RULES





Action

Procedure


Pre-Action

Both Claimants and Defendants may make an offer to settle the case before proceedings have begun. If a Defendant makes such an offer he must make a Payment into Court within 14 days of commencement of the proceedings to benefit from the cost consequences of the offer (see Offers to Settle section below).


In fast track cases especially it will be advisable for both parties to carry out as much investigation into the claim as possible now because of strict directions timetables.


Commencing the Action

A Claimant commences the action by issuing a Claim Form. This may or may not include details of his claim, known as his Particulars of Claim. A Claim Form usually has to be served on the Defendant within four months of issue, and if the Particulars of Claim do not accompany it they must follow within 14 days. The Particulars should give a concise statement of the nature of the claim and the remedy sought. A claim for money should have a statement of the value of the claim in it. The Claim Form must be verified by a Statement of Truth to be signed by the Claimant or his solicitor or the Particulars could be struck out.


Responding to a Claim Form.

The Defendant need not respond to a Claim Form which states that the Particulars of Claim are to follow. The Defendant should serve his Defence or Acknowledgment of Service within 14 days of receiving the Particulars of Claim. If the Defendant serves an Acknowledgment he should serve his Defence 28 days after receiving the Particulars of Claim. The Claimant and Defendant can agree to extend this time limit by up to 28 days and the Defendant should write to the Court to inform it of such an agreement.


The Defence must give full details of what parts of the claim the Defendant admits, what parts he denies (giving full reasons) or wishes the Claimant to prove. The Defendant must state any different version of events he relies upon. The Defence must be verified by a Statement of Truth or it could be struck out.


If the Defendant wishes to make a Counterclaim or claim a contribution from a Third Party (a Part 17 Claim) he may do so. If he applies to do so after serving his Defence he will need leave from the Court. It must also be verified by a Statement of Truth. The Court will give directions to enable the Part 17 Claim and main claim to be managed together as far as possible.


If the Defendant fails to respond to the Claim Form the Claimant may apply for judgment in default. If this is done too early the Court must set the judgment aside if the Defendant applies. A regular default judgment may be set aside if the Defendant can show that he has a real prospect of success in the action or there is some other good reason why he should be allowed to defend the claim.


A Claimant may reply to a Defence and must serve a Defence to a Part 17 Claim. The Particulars of Claim, Defences and Reply are all referred to as Statements of Case.


Summary Judgment

If a party believes that the claim or Defence has no real prospect of success and there is no other reason why the case should be disposed of at a full trial they may apply for summary judgment. The "no real prospect of success" test replaces the previous test of the Plaintiff having to show that there was no triable issue.


As with all applications to the Court there are time limits for serving the application. Most applications must be supported by evidence which will now generally be given by witness statement rather than by Affidavit. The witness statement and application must be verified by a Statement of Truth.


The Court also has the power to make an order on its own initiative for a claim or Defence to be struck out if it discloses no reasonable grounds for bringing or defending the claim, if it is an abuse of the Court process or if a party has failed to comply with a Rule, Practice Direction or Court Order.


Case Management

Once the Defence has been filed at Court the Court will send the parties an allocation questionnaire to complete by a certain date so the Court can decide whether the case should be allocated to the Small Claims or the Fast or the Multi-Track. This is determined primarily on the financial value of the claim excluding claims for interest and costs. The Court will take other factors into account such as the amount of evidence required and the complexity of the case. The Court can ask a party to provide more information about his case which will later be sent to all other parties. A Court may also hold an allocation hearing.


The court may on its own initiative or if a party so requests stay the case to allow for ADR or settlement negotiations.


In fast track cases there will be a standard set of directions on a strict timetable. The period between the giving of directions and the trial will not be more than 30 weeks and the trial will be limited to one day.


In multi-track cases there is more flexibility and the directions will depend upon the complexity of the case. The parties may agree directions for the Court’s approval or the Court may give directions with or without a hearing. The trial date will be fixed as soon as practicable and the Court may also fix a pre-trial review.


Interim Remedies

A party may ask the Court under the Rules to make an order:-

  • for an interim payment
  • for an interim injunction
  • to freeze a party’s assets (a freezing injunction)
  • to allow it to enter and search the other party’s premises (a search order)
  • to preserve or allow inspection of property.

In urgent cases or if it is in the interests of justice the Court may grant these orders before proceedings are commenced or without notice to the other party but it must be convinced by evidence of the need to do this.


Disclosure

In most cases the Court will order Standard Disclosure. This means a party must disclose:


  1. all documents on which he relies
  2. all documents which could adversely affect his own case, adversely affect another party’s case or support another party’s case
  3. all documents he is required to disclose by any Practice Direction.

A party is required to make a reasonable search for documents falling within category (b). Reasonableness depends on the number of documents involved, the nature and complexity of the proceedings, the ease and expense of retrieval of any documents and the significance of any documents likely to be located.


Documents will be disclosed in a list which must state that the party understands and has complied with his disclosure obligations and what search for documents he has made, this is a disclosure statement. The parties can agree in writing to limit standard disclosure or even dispense with it or to disclose documents without making a disclosure statement.


A party may apply to the Court for specific disclosure of certain documents or for a party to carry out a further search. The Court will consider whether this is necessary in order to dispose fairly of the claim or save costs.


If a party fails to disclose a document he may not later rely on it unless the Court permits.


Witness Statements

Directions will be given for the date on which parties should exchange witness statements.


The format of the witness statement is laid out in the Practice Directions. It must if practicable be in the witness’ own words and must be verified by a Statement of Truth.


If a party cannot obtain a witness statement he may apply for permission to serve a witness summary instead which will either state what the evidence will be if this is known or if it is not known what matters the party will question the witness on.


If a party fails to serve a witness statement or witness summary he may not call that witness to give oral evidence unless the Court permits.


Expert Evidence

Parties must have the Court’s permission to adduce expert evidence. When a party seeks permission he must name his proposed expert, if possible. The Court will restrict evidence to that reasonably required to resolve the proceedings.


The expert has an overriding duty to help the Court. This overrides his obligations to the party paying his fees. He must state in his report that he understands and has complied with that duty.


In fast track cases expert evidence will generally be limited to written evidence only.


The Court may on its own initiative or if a party requests, direct that evidence shall be given by a single expert who will be jointly instructed and paid by the parties.


The format of expert reports is set out in a Practice Direction. The expert must state the substance of all written and oral instructions he has received and these instructions will not be privileged. However the Court will only order disclosure of the instructions if it considers that there are reasonable grounds for believing that the statement of instructions is incomplete.


A party may put written questions to another party’s expert about his report and the answers will form part of the report. Questions may only be for clarification and put once only unless the Court permits or the other party agrees otherwise.


The Court may direct that the experts hold a joint without prejudice meeting and produce a joint statement of matters agreed and not agreed.


A party who fails to disclose an expert’s report may not call that evidence at the trial without the Court’s permission.


Offers to Settle

A Claimant or Defendant may make a written offer to settle the claim called a Part 36 Offer. A Defendant should also (where possible) make a Payment into Court to benefit from the cost consequences and this is called a Part 36 Payment. An offer to settle is without prejudice except as to costs. Any acceptance of the offer must be in writing within 21 days.


If the Defendant offers to settle and the Court awards the Claimant less than the offer at trial, the general rule is that the Defendant will pay the Claimant’s costs up to the last date the offer could have been accepted and the Claimant will pay the Defendant’s costs thereafter unless the Court considers it unjust to do this.


If the Claimant makes an offer to settle and the Defendant is held liable at trial for more than the offer, the Court will generally order the Defendant to pay interest at a higher rate (10% above base rate) and that the Claimant should be awarded his costs on an indemnity basis from the latest date the Defendant could have accepted the offer unless the Court considers it unjust to do so (plus interest on those costs at above 10% base rate).


Part 36 of the Rules and its accompanying Practice Direction specify what information the offer should contain. An offer not complying with the requirements will be given such weight as the Court thinks fit.


Trial

At any trial of an action the court will have the power to do the following:

  • dismiss or give judgment on a claim after a decision on a preliminary issue
  • consolidate proceedings
  • try two or more claims on the same occasion
  • direct a separate trial of any issue
  • decide the order in which issues are to be tried
  • exclude an issue from consideration
  • direct that otherwise admissible evidence should not be presented

Where a judge who hears the trial is a different judge from the judge who gave the case management directions, the trial judge will have only a limited power to change those trial directions.