Woolf in practice

United Kingdom
Kate Tye and Clare Collier report

Introduction

It is now almost six months since the Civil Procedure Rules (“the CPR”) came into force, on 26 April 1999. The first reported case applying the CPR was heard the following day: Maltez v Lewis. Whilst all 51 Parts of the CPR have not yet been subject to judicial scrutiny, this article will outline the judicial approach to the CPR so far and draw together key lessons that have been learned, including:

  • Expert Witnesses
  • Pre-action disclosure
  • Case Management
  • Costs

Expert witnesses

Stevens v Gullis v Pile

The majority of the reported cases in this area concern actions for personal injuries. However, Stevens v Gullis v Pile was a construction dispute in which CMS Cameron McKenna acted for the architect. The claimant builder issued proceedings against the defendant employer for payment for work done and materials supplied. The defendant’s architect had certified the amounts as due to the builder. The defendant counterclaimed for defective and incomplete works and delay. The counterclaim massively exceeded the builder’s claim. The defendant subsequently brought the architect into the proceedings as a third party and claimed damages for negligent supervision and over-certification.

The defendant instructed an expert witness, Mr Isaac. The court laid down directions in the main and third party proceedings, including directions for experts to meet on a without prejudice basis and prepare a joint memoranda of items agreed and disagreed. The meeting of experts took place. However, Mr Isaac did not respond to the Order directing the experts to prepare a joint memoranda of agreement and ignored correspondence from the other experts. Finally, the court ordered that Mr Isaac set out in writing the details referred to in paragraph 1.2 of the Practice Direction to Part 35. Mr Isaac had to confirm that he understood and had complied with his duties to the court and was required to set out the substance of all his instructions. In default of compliance, the defendant would be debarred from calling Mr Isaac to give evidence.

Mr Isaac purported to comply with the court’s order but failed to certify that he understood his duty to the court and failed to disclose the substance of his instructions. The Judge decided that he had failed to comply and refused to grant the defendant relief from the sanction debarring Mr Isaac. He commented that Mr Isaac’s evidence was likely to be crucial and the court should have a competent expert dealing with matters of professional negligence. Mr Isaac was a person whose evidence should not be encouraged. He did not appreciate his function as an expert and the defendant had given no evidence which excused the failure to comply with the court’s Order. The Judge therefore debarred Mr Isaac from acting as an expert in the third party proceedings and in the main proceedings between builder and employer. The Judge then granted the third party architect’s oral application that, in circumstances where the defendant could adduce no expert evidence against the architect supporting the claim of professional negligence, the case against the architect should be dismissed.

The Court of Appeal upheld the Judge’s decision. Lord Woolf himself gave the leading judgment. Lord Woolf decided that the Judge had no alternative but to make the Order that he did, notwithstanding the draconian consequences to the defendant.

There are a number of points to note as a consequence of this decision.

  • First, under the old Rules a court faced with similar circumstances may well have adjourned the trial date and allowed the defendant to instruct an alternative expert, causing delay and increased cost;

  • Second, the definition of an expert’s role in the CPR is clear and should focus an expert’s mind on what he is required to do. This case emphasises the disastrous consequences that may result if an expert does not understand or does not comply with the CPR.

There have been three personal injury cases in the Court of Appeal concerning expert witnesses. Although not construction cases, the court has also made some interesting points on the aims of the CPR and the court’s determination to enforce them.

Baron v Lovell

In Baron v Lovell the defendant’s solicitor “overlooked” the County Court Automatic Directions relating to expert evidence and failed to serve the report of an expert witness. The court ordered that the defendant was not allowed to call its expert as the evidence had been served very late. If that evidence had been allowed, the court would have ordered a meeting of experts causing further delay. The Court of Appeal upheld the decision. The Court of Appeal was undoubtedly influenced by the fact that there appeared to be a large measure of agreement between the parties’ experts and that it was therefore unnecessary for each party to call its own expert. The trial was to proceed and the only expert evidence was the written reports of the claimant’s expert.

In this judgment the Court of Appeal also criticised the defendant’s solicitor for failing to attend a pre-listing hearing when the court had required advocates and clients to attend. The Court of Appeal warned that if a party acted unreasonably in litigation in breach of a direction of the court, judges could decide to order indemnity costs or exercise their power to award interest on damages at a higher rate than usual. Lord Justice Brooke noted:

“the whole thrust of the CPR regime is to require the parties to behave reasonably towards each other in the conduct of litigation. The old antagonistic point scoring, which used to drag personal injuries cases out and run up the costs, should now be at an end”.

This comment states the attitude the courts expect the parties to adopt and probably extends to all cases.

Rollinson v Kimberly Clark Limited

In Rollinson v Kimberly Clark Limited the defendant appealed against the Judge’s refusal to vacate the trial date. The CPR were not in force when the Judge heard the original application, but she took them into account and the Court of Appeal did not criticise her for doing so. The defendant’s two medical experts could not attend the trial date and would not be available until March 2000, or, possibly, December 1999. The Court of Appeal upheld the Judge’s decision, noting the Judge’s displeasure at an expert, instructed relatively late in the case, who stated that he could not attend trial on the dates listed and provided available dates “which can be written on one side of a postage stamp”. Clearly solicitors should check the availability of experts to meet the trial or likely trial date before instructing them. If the first choice expert is not available an alternative candidate should be instructed. Lord Justice Judge warned

“if it was ever acceptable, which ... I doubt, it is certainly no longer acceptable when a trial date is bound to be fairly imminent, for a solicitor to seek to instruct an expert witness without first checking ... his availability, or proceed to instruct him when there is no reasonable prospect of his being available for another year”.

Pre-action disclosure

In the past pre-action disclosure has been a useful tool in personal injury cases, allowing a claimant to obtain documents prior to commencing proceedings to assist him in determining whether or not a successful case could be brought or settled without proceedings. On 26 April 1999 the Civil Procedure (Modification of Enactments) Order 1998 (“the Order”) amended Section 33(2) of the Supreme Court Act 1981 so that pre-action disclosure could, if certain conditions were met, be obtained in any case.

Burrells Wharf Freeholds Limited v Galliard Homes Limited

Dyson J. was faced with a challenge to this jurisdiction in Burrells Wharf Freeholds Limited v Galliard Homes Limited. The respondent argued that Part 31.16 of the CPR and the amendments to Section 33(2) of the Supreme Court Act 1981 were ultra vires since the Order had been made under the wrong section of the Civil Procedure Act 1997. Dyson J. rejected this argument on the grounds that the amendment had not been made under the wrong section, and, even if it had, that did not make the amendment ultra vires.

Dyson J. then had to decide the merits of the application. Under CPR 31.16 the court may order disclosure prior to proceedings:

  • if both the applicant and the respondent are likely to be parties in future proceedings;
  • if proceedings had started the respondent’s duty of standard disclosure would extend to the documents the applicant seeks; and
  • if disclosure before proceedings commence is desirable in order to:

  • dispose fairly of the anticipated proceedings;
  • assist the dispute to be resolved without proceedings; or
  • save costs.

Dyson J. commented that each case would depend upon its own facts and whether the criteria had been made out. Whether or not to order pre-action disclosure will always be in the court’s discretion. In this case, the applicant company owned the freehold of an estate of flats. It claimed that there were defects in the flats in that there were serious breaches of the Building Regulations, in particular those in relation to the spread of fire. The applicant’s expert gave evidence that the schedule of defects being prepared by him would take longer to prepare (and therefore be more costly) and be less accurate if he did not have copies of documents indicating what was required by and what was allowed by the Local Authority’s Building Control Officers. This was because the interpretation of the Building Regulations involved a considerable amount of judgment and subjectivity by these Officers. The expert had tried to obtain the documents from elsewhere but had been unsuccessful.

The respondent resisted the application “on grounds of principle”. It did not argue that the documents would not fall within the definition of standard disclosure or that it would be oppressive, difficult or disproportionate to give disclosure now. The respondent argued that litigation was not likely. Dyson J. disagreed and criticised the conduct of the respondent concerning the application which was “hardly a good example of the brave new world of cooperation and more affordable litigation that was supposed to have been ushered in by the Woolf reforms”. Dyson J. concluded that litigation was likely, pre-action disclosure was desirable and ordered that disclosure be given.

It is not known what order was made as to costs. According to Part 48.1 the court should usually award the respondent the costs of opposing the order and of complying with it. However, the court has the discretion to make a different order, having regard to all the circumstances including the extent to which it was reasonable for the respondent to oppose the application. In this case, the respondent had apparently spent £20,000 in opposing the application; in view of Dyson J.’s comments on its conduct it may have resulted in bearing at least some of those itself.

Active case management

Re Rotadata Limited

In Re Rotadata Limited a shareholder brought a claim against those involved in managing a limited company, Rotadata Limited. The appellant shareholder (“Y”) sought relief under Section 461 of the Companies Act 1985 on the basis that his interests as a shareholder were prejudiced by the way in which the company was being run. The respondent (“T”) sought to strike out the shareholder’s action. T was unsuccessful and appealed against the Registrar’s ruling. On appeal T argued that, pursuant to its duty to manage cases actively, the court was expressly mandated to consider at an early stage whether a claim should be struck out. Y argued that the CPR imposed a duty on the parties to cooperate in order to avoid going to court in the first place. The court held that even if there was no formal application for a claim to be struck out, Registrars should be encouraged to direct the parties to meet and identify the issues that were really in dispute and consider how they might best be resolved. Such a course of action would not detract from the role of the court as manager of the case and if problems did arise, the court could consider the parties’ behaviour and apply costs sanctions if appropriate.

Unfortunately, the meetings and negotiations between the parties proved unsuccessful. T then applied to the court for Y’s action to be struck out as an abuse of process. T’s application was refused, but the hearing of Y’s petition was adjourned. On appeal, by way of re-hearing, T again argued that the court should take an active part in case management by expediting the striking out. T’s appeal was dismissed.

The court held that whilst the courts were required to take an active role in case management, that management also included encouraging the parties to cooperate. Further support for the court’s interpretation was to be found in CPR 29: CPR 29.2 advocated court management of case, but CPR 29.4 made provision for the parties to agree on proposals for case management, subject to the court’s approval.

One of the major complaints in the pre-Woolf era was that the parties had too much control over the proceedings, often resulting in lengthy delays and perceived misuse of the court’s time. This decision appears to show that the courts are willing to adopt a pragmatic approach to the CPR. The court allowed the parties time in which to identify and address the real issues between them, and did not adopt a mechanistic approach by either reserving to itself all powers over the progress in a case or throwing the claim out altogether.

Adoko v Jemal

The facts in Adoko v Jemal were complicated and, by the time the case reached the Court of Appeal, very confused. In short Adoko had, he thought, been defamed by a complaint made by the respondent, Jemal, to the Professional Conduct Committee of the General Council of the Bar. Adoko’s defamation action against Jemal was struck out and Adoko appealed. Adoko’s appeal was dismissed first by the Master and subsequently by the Judge. Adoko appealed again. However, it appeared that his appeal was mis-timed, that it did not take the correct form and was wrong in substance. However, to reach that decision the Court of Appeal spent in excess of one hour trying to establish against which decision Adoko wanted to appeal and whether the correct notice had been used. At the end of that time the court established that the appeal notice Adoko had submitted was not valid. Adoko then asked for an adjournment to allow the appeal notice to be redrafted. His request was refused.

Although the particular circumstances of the case are unlikely to be repeated the comments of the court are instructive. In their judgment the members of the Court of Appeal indicated, in strong terms, that the court had better things to do with its time than try to sort out what application Adoko wanted to make, whether the application had been made in the correct form and whether Adoko should be permitted any further opportunities to put right his mistakes. In concurring with the judgments of Lords Justices May and Buxton, Lord Justice Laws stated:

“The proper and proportionate use of court resources is now to be considered part of substantive justice itself”.

Biguzzi v Rank Leisure Limited

In Biguzzi v Rank Leisure Limited the Court of Appeal, led by Lord Woolf, concentrated on a number of issues relating to the striking out of claims and the relevance of “old” pre-CPR authorities. The case concerned a claim for damages brought by Mr Biguzzi against his former employers, Rank Leisure Limited. Mr Biguzzi had been attacked while working at one of Rank’s bars in Brighton. The attack took place in late 1993 and proceedings were issued nearly two years later. However, it was not until 1999 that the case was listed for trial by the court, at which point Rank applied for the claim to be struck out.

At first instance, and before the CPR came into force, the Deputy District Judge struck out the claim on the grounds that there had been an abuse of process by Mr Biguzzi in failing to pursue his claim with vigour. Mr Biguzzi appealed successfully, the appeal taking place after the CPR had come into force. At the appeal the Judge decided that he was not constrained by pre-CPR authority to strike out the claim and ordered that the matter proceed to trial as soon as possible. Rank appealed to Court of Appeal, but its appeal was unsuccessful. In the leading judgment Lord Woolf made it clear that although Part 3.4 of the CPR gives the courts wide powers to strike cases out, the power was one of a number of alternative measures at the courts’ disposal in cases where the rules and timetables had not been followed. Those alternative measures included costs penalties, interest penalties and the payment of money into court. Lord Woolf also agreed with the appeal judge that “earlier authorities are no longer generally of any relevance once the CPR applies”.

It is interesting to note that Lord Woolf does not see the courts’ increased powers to strike out as an appropriate sanction for all ills. On the contrary, Lord Woolf recognised that, despite the wider availability of that power under the CPR, if the courts manage cases properly under the powers expressly given to them, then the draconian step of striking out should no longer happen in cases such as Mr Biguzzi’s.

Costs

General Mediterranean Holdings SA v Patel and Another

CPR Rule 48.7(3) gives courts the power to direct that privileged documents are disclosed to the court when the court has been asked to make a wasted costs order against the legal representatives of one of the parties. In the case of General Mediterranean Holdings S A v Patel & Another the Patel’s former solicitors, (“M”), were on the receiving end of an application for wasted costs made by General Med. in the sum of £500,000. M sought an order for the disclosure of documents containing statements made to them by their former clients during the course of their preparation of the case. The documents were subject to client privilege, and as such could only be disclosed if the Patels waived their right to confidentiality of the documents. In a detailed judgment, Toulson J. considered the arguments raised by both the Patels in objecting to such disclosure, their former solicitors, M, in pursuing the application, and from the Law Society in support of the Patels. The Patels, argued that CPR 48.7(3) was ultra vires and a breach of Articles 6 and 7 of the European Convention on Human Rights.

In the course of his judgment Toulson J. decided a number of issues:

  • First, it is only a respondent to an application for wasted costs - in this case M - who may apply for an order under CPR 48.7(3);

  • Second, the strength of a person’s right to legal confidentiality is such that it could not be abrogated by the wording of the Civil Procedure Act 1997. That Act introduced the CPR with effect from 26 April 1999. Paragraph 4 of Schedule 1 of the Act provides: “Civil Procedure Rules may modify the rules of evidence as they apply to proceedings in any court within the scope of the rules”. That wording offended against two key principles: (a) in the absence of express language or necessary implication the courts presume that even the most general words are intended to be subject to the rights of the individual; and (b) the presumption against encroachment on the rights of the individual is stronger still where the words are merely delegating a power to legislate;

  • Third, Toulson J. doubted that a general discretion to order disclosure of privileged material on a wasted costs application was necessary and proportionate for the purpose of doing justice to the legal profession. Toulson J. decided that CPR 48.7(3) was ultra vires and thus saw no need to exercise the discretion granted to him by the rule.

The procedure for determining wasted costs applications was never meant to provide for elaborate pleadings and extensive disclosure exercises in a form of costly satellite litigation. However, this is a case of some importance, in that it clarifies the extent of the courts powers in an area - wasted costs - where increased activity might be anticipated as a result of the introduction of the CPR. In Toulson J.’s view the court could not override the client’s right to legal confidentiality, notwithstanding the apparent power to do so set out in CPR 48.7(3).

Commission of Customs and Excise v Anchor Foods

In February 1999, by order of Neuberger J., Anchor were prevented from disposing of their business to another company. The application to prevent the sale had been made by the Commissioners of Customs and Excise pending resolution of a number of outstanding liabilities to the Commissioners. The Commissioners thought it was a sale at an undervalue. Neuberger J. directed the parties to try to agree whether the sale by Anchor was indeed at an undervalue. After some discussion the Commissioners accepted that the sale was entirely legitimate and Anchor sought the remove the injunction preventing the sale. The Commissioners still wished to pursue Anchor for a number of outstanding sums and the proceedings would therefore continue.

In February Neuberger J. made an order for “costs in the cause”. Once the Commissioners had reached agreement with Anchor on the nature of the sale, Anchor sought an order from Neuberger J. for the costs they had incurred in the February hearing and those incurred in the period of discussion and negotiation following Neuberger J.’s order. However, Neuberger J. stated that only in “the most exceptional circumstances” such as fraud, or the slip rule, could a court revisit its own order as to costs. The original costs award therefore stood. However, Neuberger J. stated that he would allow Anchor to raise the matter of costs’ again at Anchor’s forthcoming application for a stay of the proceedings, since that would allow him to consider all the matters in the case, including his earlier decision.

Pragmatism again seems the order of the day, in that having recognised an inability to vary an earlier order, the court was prepared to allow the whole question of the costs of the proceedings to be dealt with once the final result was known.