HOW HAVE THE CIVIL JUSTICE REFORMS IMPLEMENTED IN 2013 TAKEN AFFECT ON LITIGATION AND IS EARLIER SETTLEMENT OF DISPUTES BEING ACHIEVED?

Published 1197 days ago
HOW HAVE THE CIVIL JUSTICE REFORMS IMPLEMENTED IN 2013 TAKEN AFFECT ON LITIGATION AND IS EARLIER SETTLEMENT OF DISPUTES BEING ACHIEVED?

Part 1 Introduction On 21 December 2009, the Right Honourable Lord Justice Jackson published his Final Report of the Review of Civil Litigation Costs. The foreword to the report by Jackson LJ reads as follows: “In some areas of civil litigation costs are disproportionate and impede access to justice. I therefore propose a coherent package of interlocking reforms, designed to control costs and promote access to justice.” On 1 April 2013, the UK Government brought in civil justice reforms that implemented Jackson LJ’s main recommendations. These included a number of changes to established procedures. The main change being that in no win no fee contingency fee arrangements the losing side in the action no longer has to pay the success fees or insurance premiums that are generally incurred. One of the key areas of the reforms was the use of Alternative Dispute Resolution (“ADR”) which was perceived would reduce costs and bring about early settlement of cases. The reforms are designed to reduce litigation costs and encourage ADR. Seventeen years earlier in 1996, Lord Woolf published the “Access to Justice Final Report”. In regards to the Report, The Yale Journal of Law and the Humanities recorded that “a fundamental premise of the Final Report was that court proceedings should be issued as a last resort, that all cases should be settled as soon as possible, and that ADR should be tried before and after the issue of court proceedings in order to achieve early settlement”. To enable the understanding of how the Review of Civil Litigation costs was to be implemented, Jackson LJ and other senior judges embarked on a series of lectures focussing on different aspects of the legislation. The invitees to these lectures were largely made up of professionals from the legal and construction industry. There was little involvement from clients, contractors and sub-contractors. The Eleventh Lecture in the Implementation Programme was held on 8 March 2012 and the role of ADR was discussed. It was presented to the RICS Expert Witness Conference that ADR, particularly mediation, has a vital role to play in reducing costs in civil disputes and that there was a need for education in the use of ADR. The construction industry was identified as being “in the forefront of resolving disputes by ADR” and other than arbitration, seven methods of resolution were detailed in the lecture as Dispute Avoidance, Negotiation, Early Neutral Evaluation, Mediation, Conciliation, Dispute Review Boards and Adjudication. The Chartered Institute of Arbitrators has recently published and journal that identifies other ADR methods being used including Expert Determination, Mini-Trials, Neutral Expert Fact-Finding and Private Judging. The reforms are intended to change how cases are funded and litigation and costs are managed. Lawyers have now been given the opportunity to share in the damages awarded to their clients, subject to percentage caps and success fee and After the Event insurance premiums are no longer recoverable from the losing party. Courts now have the ability to disallow legal costs that they feel are disproportionate to the dispute and parties must now file costs budgets to forecast the legal costs involved. Defendants now pay their own costs even if they win at trial subject to certain conditions. Dissenting opinions as to the proposed changes were voiced as reported in the Law Society Gazette on 8 March 2012 “What is needed is not rule change, but culture change, I do not agree with the proposals made for sanctions, including sanctions against all parties. Nor do I agree with a proposal for compulsion to be exercised over judges. Judges must have discretion to give such case management directions as they deem appropriate.” In March 2013 the Chief Executive of the Law Society wrote “The reforms proposed by the government to civil litigation costs and funding will have a profound effect on access to justice and the way our members conduct their litigation business. The Law Society has lobbied vigorously to oppose or mitigate many aspects of the changes, most of which are expected to be implemented in April 2013. The Society remains disappointed that despite offering some concessions (not least the delay in implementation of the reforms from October 2012 to April 2013) the government has gone nowhere near far enough to make their proposals acceptable.” Once the reforms had been implemented, there was “Outcry over Legal Aid Changes” imposed by the reforms and solicitors warned that “Compliance is the key to survival in the Jackson Reforms storm”. The High Court has imposed severe sanctions where a claimant did not file a costs budget by the required date and the courts have now confirmed that that all parties must comply with court orders and the civil procedures or face sanctions if they do not comply. One of Jackson LJ key ADR methods, mediation, was endorsed at the Court of Appeal and it was made clear that an invitation to participate must not be ignored as was found on PGF II SA v OMFS Company 1 Limited. Whilst it was recommended by Jackson LJ that to assist the ADR education process that “An authoritative handbook should be prepared, explaining clearly and concisely what ADR is and giving details of all reputable providers of mediation”, the reforms imposed mandatory conditions on parties in dispute. The Jackson ADR Handbook has now been published which deals with both domestic ADR and EU mediation directives and the reforms are being examined and tested in the courts. In 2011, The World Bank published research that showed that whilst in the US the use of ADR compared to litigation saved the parties 4 to 6 months in time to settle, in the UK, on average there was no time saved by proceeding with ADR relative to court litigation. By forcing parties to use ADR processes, there is a risk that if cases do not settle then they will proceed to litigation, thus increasing costs and time incurred. Settlement of dispute is an emotional process. Mandatory ADR, particularly mediation may not be the best way to achieve settlement and this paper explores the psychological behaviour of parties in dispute and the lack of encouragement for each party to understand the other’s position. With the focus now strongly on ADR, this has coincided with a dip in construction output. Adjudication, the construction industry’s statutory ADR method, has had a difficult year in 2013 with its speed, efficiency and relatively low cost being challenged by the courts when adjudication may not accord with a party’s human rights or it may be found that an adjudicator has acted unfairly or their decision may contain errors of consistency. In Scotland, the cases of Whyte and Mackay v Blyth and Blyth and SW Global Resourcing v Morris and Spottiswood being examples of challenges made. The aim of this paper is to examine how the reforms have changed the landscape of dispute resolution and research has been conducted that will seek to establish how the reforms are being implemented and evaluate their effectiveness. The role of the judiciary is to enforce the law and interpret the law as it stands. The reforms made to the justice system were in part inspired to reduce the disproportionate legal costs incurred in civil litigation. Generally, a black letter approach to research has been used and supplemented where appropriate with interviews with members of the dispute resolution professions. For those individuals taking part in the research, full permission has been given by them regarding the use of the findings. The legislation studied includes the Civil Procedure (Amendment) Rules 2013, the Construction Contracts (England & Wales) Regulations 1998, the Conditional Fee Agreements Order 2013, the Court and Legal Services Act 1990, the Damages-Based Agreements Regulations 2013, the Housing Grants, Construction and Regeneration Act 1996, the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“LASPO”) and the Offers to Settle in Civil Proceedings Order 2013 along with the original Woolf reforms of 1999. ​ At the end of this research it is expected that following will have been achieved: • Provide an examination of how the post-reform situation has effected change comparing the advantages and disadvantages, strengths and weaknesses, merits and demerits of the changes • Increased understanding of the relation between dispute resolution and settlement, the factors that determine the likelihood of settlement and decisions made when legal instruments are imposed on the parties; • Conclusions regarding the relationships between the Client and his legal team and the reasoning for allowing a judge to write to review and amend the justice system in the UK; • Highlighting of the failures of the imposition of ADR on the parties to achieve early settlement and the comparison to the international systems in place and under consideration; • The answer to the question “Did Jackson get it wrong?”

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