UK: A Streamlined Court Procedure For Business Disputes

Anyone involved in litigation can testify to how protracted and costly it can be. The Shorter Trials Scheme (STS) pilot currently running in the Rolls Building courts is aimed at addressing this.

A shorter and earlier trial, a designated judge who manages the case, limited disclosure and limited and written witness and expert evidence will be the order of the day. Cases issued in the STS should come to trial within 10 months of issue of proceedings with judgment being delivered within six weeks thereafter.

Disclosure, evidence and trial are generally the most time-consuming elements of dispute resolution to deal with and so account for the greatest proportion of the costs incurred. By heavily streamlining these areas, the STS is intended to offer dispute resolution to businesses on a commercial time scale and at proportionate cost.

The STS will be most appropriate for relatively simple commercial and business related disputes which do not hinge on expert or factual evidence; are not document heavy; and where speed of resolution is required, perhaps in order to maintain a business relationship or avoid damage to reputation.

It is not suitable for cases that involve allegations of fraud or dishonesty, or involve multiple issues or multiple parties, or that might not be fairly tried on the basis of only limited disclosure and limited oral evidence.

STS - the key features:

• Type of case - the STS is intended for business cases issued on or after 1 October 2015 in the Commercial, Technology and Construction or Mercantile Courts or the Chancery Division. Business is widely defined and covers a wide range of cases. Purely private, non-commercial matters are not included and neither are cases in the Intellectual Property Enterprise Court (it has its own similar procedure) or public procurement cases. As above, for cases including allegations of fraud or dishonesty, cases requiring extensive disclosure or reliance on extensive expert or witness evidence, and cases involving multiple issues or parties, the STS will not be an appropriate procedure.
• Designated judge - each case will have a designated judge who will manage the case, with the aim of providing greater continuity, efficiency, judicial understanding and control over the case and the timetable. The designated judge will also be the trial judge whenever possible.
• Opt in/transfer out - the STS is not mandatory. A claim can be issued in the STS (in the appropriate court) or either party can opt in, apply to transfer out or the court can, of its own initiative, strongly suggest that the case be transferred into the STS. Any application to transfer out on the basis that the case is not suitable for the STS should be made before the first case management conference.
• Pre-action protocols - do not apply although a letter of claim should still be sent by the claimant providing the defendant with succinct but sufficient details of the claim so the defendant can investigate the allegations. The letter of claim should include notification of the intention to adopt the STS. The proposed defendant should respond within 14 days confirming whether it agrees to or opposes the STS.
• Length of pleadings - should be short (no more than 20 pages) and the claim form and particulars of claim (with core documents) should be served together and promptly after the defendant's response to the pre-action letter. The defendant has 28 days after acknowledging service to file a defence and any counterclaim.
• Early Case Management Conference (CMC) - this should be fixed for a date approximately 12 weeks after the date the defendant is due to acknowledge service of the claim form. The court will review and approve a list of issues (compiled by the claimant and agreed by the parties if possible), resolve any disclosure disputes, consider Alternative Dispute Resolution, give directions and fix dates for the pre-trial review and trial.
• Limited disclosure - an arbitration style approach is taken, rather than that usually provided for in the Civil Procedure Rules (CPR). Only those documents relied upon and those requested by an opponent and either agreed or ordered need be disclosed. It appears that there is no obligation to volunteer adverse documents although these could be specifically requested by an opponent.
• Applications - will be primarily on paper and/or conducted by phone, so saving time and costs.
• Trial date - will be fixed for a date no more than eight months after the CMC and will be no longer than four days, including reading time.
• Evidence - generally factual and expert evidence will be in writing and of limited length, unless ordered otherwise. Expert oral evidence will be limited to issues identified at the CMC.
• Extensions of time by agreement - will be limited to a 14 day extension for service of the defence and a single seven day extension to any other date set by the rules or directions. The intention is to ensure that the timetable is adhered to. Time can be further extended by the court, but only if there is good reason to do so.
• Judgment - will be handed down within six weeks of the trial or any later final written submissions.
• Costs - costs budgeting will not apply unless the parties agree otherwise. The costs of the entire case will be assessed summarily by the trial judge.

Flexible Trials Scheme

An alternative to the STS is the Flexible Trials Scheme (FTS). The FTS was introduced at the same time as the STS; like the STS, it is applicable to all claims started in the Rolls Building courts, but it is a less streamlined process than the STS.

The FTS procedure enables parties to agree to adapt the trial procedure to suit their particular case, to achieve a more simplified and speedier trial than is currently provided for by the CPR. This includes limiting disclosure in a similar (albeit wider) manner to that in the STS, and minimising the amount of witness and expert oral evidence and submissions at trial.

A standard trial procedure is set out in the FTS and can be followed in full or varied by agreement. Parties intending to use the FTS should agree to do so in advance of the first CMC.

Again the scheme is voluntary with the aim of providing flexibility and choice to the parties and reducing the costs and time required for trial by streamlining what currently are the most costly and time consuming aspects of litigation.

Comment

Particularly complex cases or cases requiring wider disclosure will not be suitable for either of these two schemes. There will, however, under the 'standard' CPR, be a number of cases where the cost (in both legal fees and wasted management time) of running those cases is likely to be disproportionate to the sum in dispute.

If the case is sufficiently simple, the STS may provide a suitable alternative, and be well worth using. Certainly it could be a better alternative than deciding simply to write off a debt, or feeling obliged to agree an unsatisfactory compromise, just to avoid high costs.It is a viable alternative to expensive full blown litigation where even reasonably incurred costs in fighting the case may then not be allowed as recoverable by the court, at the end of the case, being then adjudged to be disproportionate to the sums involved and so held to be irrecoverable by the winning party.

Don't forget though, neither scheme is compulsory and there needs to be agreement on both sides to opt, or stay, in. Once in the STS, the parties and their representatives are also expected to co-operate with, and assist, the court in ensuring that the proceedings are conducted in accordance with the STS and its short timetable, so that the claim can be dealt with in the most efficient and cost-effective way possible.

Claimants should, however, be aware that the court is alive to the risk that a well-prepared claimant may attempt to use the STS to "ambush" a defendant during the pre-CMC period. The court may sanction such behaviour in costs if it considers that a claimant has acted in an oppressive or unfairly prejudicial manner.

Both the STS and FTS pilots will run until 30 September 2017. Full details can be found in Practice Direction PD51N of the CPR.

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.