All change in the courts - an examination of the Woolf reforms

Clare Collier and Kate Tye examine the Woolf reforms

'Change is long overdue'. So said the Lord Chancellor, Lord Irvine, introducing the government's 'Access to Justice' Bill. In the flurry of publicity surrounding that Bill which deals, in the main, with reforms to the Legal Aid system, we should not forget other, far-reaching, legal reforms due to come into effect on 26 April 1999 - the so-called 'Woolf reforms'. These reforms will affect virtually all civil matters and are to be found in the draft Civil Procedure Rules ('the Rules'). The introduction of these new Rules marks the culmination of 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.

In a new departure the Rules lay down an 'overriding objective'. That objective is to enable the courts to deal with cases justly. The courts will ensure, so far as is practicable, that

• the parties are on an equal footing;
• 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 of the case, the complexity of the issues and the parties' financial situation;
• the case is dealt with speedily and fairly; and
• 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. It is worth noting that the new Rules, and the overriding 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 differing courts.

Case management

Far from standing in isolation the overriding objective is supported by the imposition on the court of a duty to 'further the overriding objective by actively managing cases'. Active case management means not only exhortations
to the court to identify the issues in dispute at an early stage and to encourage parties to make use of alternative dispute resolution mechanisms where appropriate, but also means that the court has been given powers to alter time limits, adjourn hearings, consolidate proceedings and order split trials. The court is also given the power to strike out particulars of claim, or a defence, where they show no
reasonable grounds for bringing, or defending, the claim. The court will also be able to strike out a party's case for failure to comply with the court's orders.

The effect of these powers can only be gauged once the judges have begun to put them into practice. But we should all take note of the recent warning - given by 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 will be 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 'tracks', to which each case will be allocated. There will be three tracks:

• small claims;
• fast track; and
• 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.

What does this mean for lawyers and clients?

It is difficult to know for certain what effect these new Rules will have. Some have already argued that, even if the Rules do actually come into effect when promised, there will be no noticeable difference. However, there are a number of areas where change can be predicted.

Discovery

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 is covered in greater detail in the table below. A party must 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 reaonableness will be judged in the context of the claim as a whole.

The new 'standard disclosure' is a welcome 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 on those issues actually in dispute only.

Judicial intervention

In view of the imminent introduction of active case management the Lord Chancellor's Department has organised training days for the judiciary. 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 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
commenced, 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 the key rules. The table is by
no means exhaustive but does sketch out the key
stages of a typical case and the new Rules which
will be applicable.

Summary of the new Civil Procedure Rules

Small claims track

Suitable for claims with financial value of up to £5,000

Fast track

Suitable for claims with financial value of up to £15,000 and claims where small claims track is unsuitable. Fast track claims should only lead to trial of 1 day in length with limited expert evidence.

Multi track

Suitable for claims which do not fall into either small claims or fast track categories. The Court will have sufficient flexibility to deal with cases of widely differing values and complexity.

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 them 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 20 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 20 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 serve a Reply to a Defence and must serve a Defence to a
Part 20 Claim. The Particulars of Claim, Defence 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 paymentfor 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 caseor 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) or (c). 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 EvidenceParties must have the Court's permission to adduce expert
evidence. When a party seeks permission he must identify the field in which
he wishes to rely on expert evidence and (if practicable) name his proposed
expert. 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 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 that from
the latest date the Defendant could have accepted the offer the Defendant
should pay interest on the amount awarded. The interest payment will be at
a higher rate of 10% above base rate. The Claimant should also 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.

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

Trial

Under its general powers, 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.