UK: Professional And Commercial Disputes

Litigation trends

The Ministry of Justice has published its statistics for judicial and court activity in England and Wales for 2011. The figures, published on 28 June, show that overall the volume of litigation dealt with by the High Court in London has increased slightly (by 7%) since 2010.

In 2010, originating proceedings (excluding the Family Division) fell by a quarter from 2009 (see Fig. 1.) In the Queen's Bench Division and Chancery Division in London claims have fallen, and the overall increase in claims is due to an uptick in claims in the Commercial Court, Technology and Construction Court, Companies Court, Bankruptcy Court and Admiralty Court.

The Queen's Bench Division

In the Queen's Bench Division, the number of new claims issued in London fell by 138 and a quarter of the 4726 claims issued were debt claims. Whilst the number of breach of contract claims increased by 44% and there was a slight increase in defamation claims, there were decreases in some other areas, most notably in respect of personal injury (22%) and miscellaneous claims (28%). It is likely that the continuing growth in the take-up of alternative dispute resolution techniques contributed towards keeping the number of new claims below not only 2009 levels, when there was a peak in claims in many areas, but also 2010 levels (see Fig. 2).

The Chancery Division

In the Chancery Division, as with our report last year, it is difficult to compare the current landscape with previous years due to the creation of new categories for claims in 2010. In the Royal Courts of Justice in London there were 4568 claims and originating proceedings issued in the Chancery Division, which is 5% fewer than in 2010. (See Fig. 3 for a breakdown of the types of claim in the Chancery Division in the Royal Courts of Justice.) Overall, there were 35,238 sets of proceedings started in the Chancery Division across England & Wales, which represented an increase of 6% compared to 2010 (albeit still 23% lower than in 2009).

Professional negligence claims

2009 saw a notable increase in the number of professional negligence claims issued in London in the Chancery Division and "other negligence" claims (which includes professional indemnity) issued in London in the Queen's Bench Division. In 2010, however, both categories saw an identical fall of 32%.

Although the number of such claims continued to decrease in 2011, the decline was at a slower rate with claims falling by 20% and 8% in London in the Chancery and Queens Bench Divisions respectively (see Fig. 4). It remains to be seen whether the downward trend in professional negligence claims will continue. There must be a good chance that such claims will rise again as a result of the protracted decline in economic conditions.

The Technology & Construction Court and the Commercial Court

Although the number of claims dealt with in London by the Technology and Construction Court dropped in 2010, 2011 has seen an increase of 7% (see Fig. 5). It is hard to say which factors were at play given the mixed signals coming out of the construction sector. In some areas it may be the result of increased levels of building activity, whereas in others parties may simply be fighting harder over what little construction work there is around.

In the Commercial Court, after a spike in 2009, levels of work dropped back in 2010. However, 2011 saw an increase of 26% to a level of claims above even the number in 2009 (see Fig. 6).

The Appellate Courts

Turning to the appellate courts, in the UK Supreme Court (UKSC) which was created in 2009, replacing the House of Lords, 174 applications for permission to appeal, from the Court of Appeal, Civil Divison and High Court, Civil Division, were decided, of which 49 were allowed, and 125 refused outright (73%). As for full appeals, 59 civil appeals were presented from the Court of Appeal and High Court, and 58 disposed of.

Almost 55% of appeals disposed of were allowed which broadly equates to the position in 2010 (see Fig 7).

In the Court of Appeal's Civil Division, the numbers of final appeals filed and disposed of were up by 8% and 4% respectively. The proportions of appeals allowed, and dismissed remained broadly consistent with 2010 (see Fig. 8) with 41% of appeals being allowed.

The Costs regime

Finally, statistics for the Senior Courts Costs Office (SCCO) show that, whilst the assessments of bills to determine how much a successful party can recover from its opponent remained exactly the same in 2009 and 2010 (1788), the figure rose by 14% in 2011 (see Fig. 9).

Comment

Following the 2009 increase in claims dealt with by the High Court in London, the fall in claims during 2010 came as a surprise to many. The slight increase we have seen this year was more in line with expectations.

Looking ahead to the 2012 figures, professional negligence claims against lawyers and surveyors arising from the fall in asset values may rise as the six year limitation period for cases dating back to the start of the recession draws close. In addition, following the Government's announcement this year that Lord Justice Jackson's civil costs reforms will be implemented in April 2013, it seems very likely that there will be a surge in claims as claimants seek to take advantage of the current regime before the recoverability of success fees and after the event insurance policies is removed for any claims commenced from the implementation date. These factors, together with the drawn-out nature of the economic downturn may well have the effect of driving litigation volumes up in 2012.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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