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A Litigation Bulletin from our Insurance Team

  • United Kingdom
  • Insurance and reinsurance
  • Litigation and dispute management

08-05-2017

Welcome to the Litigation Bulletin from our Insurance team. This edition of the bulletin covers developments in litigation-related law and procedure in March and April 2017.

If any of the articles are of particular relevance to you, we would be delighted to discuss them further with you. Contact details are set out at the end of the bulletin.

Fixed costs

Pilot scheme announced

Details of a fixed costs pilot scheme have been announced by HHJ Waksman QC, of the London Mercantile Court, at Jackson LJ's fixed recoverable costs seminar in Birmingham. The scheme is proposed to run over two years in London (in the Mercantile Court) and in Manchester (in the Chancery Division, Technology and Construction Court, and Mercantile Court). The start date for the pilot has not yet been confirmed but it is expected to commence in the next few months.

If the pilot scheme is set to run for two years, that may make it less likely that any final proposals will be implemented before then.

Online Courts

Prisons and Courts Bill scrapped?

In the Prisons and Courts Bill published on 23 February 2017, the government was paving the way for the introduction of on-line civil courts following the Briggs report (published last summer) and the consultation in the autumn. Section 37 of the Bill provides for court rules to specify claims which must or may be initiated, conducted and disposed of by electronic means. An Online Procedure Rules committee was to be established to decide what the rules for such cases should be. It was to have the power to require that certain parts of the CPR shall apply, as well as new rules.

With the calling of a General Election for June, the Bill will be lost, and so it now looks unlikely that the Bill will become law later this year.

E-Filing

Compulsory in the Rolls Building Courts

E-filing became mandatory in Rolls Building courts in London on Tuesday 25 April 2017.

You will need to create a personal account to use the system.

The importance of service

Canning v Irwin Mitchell

The need to bring formal claims and demands to the attention of the defendant or respondent is well-known. One purpose is to ensure the relevant party has notice of the claim or demand and an opportunity to respond to it. But the function of service is not limited to that purpose. Under certain statutory provisions the court's ability to make an order may depend on proper service having been achieved.

One example is s268 of the Insolvency Act 1986. This states that, if it is claimed that a debtor's inability to pay a debt is to be shown by his failure to respond to a statutory demand to pay within 21 days, the demand must have been served on the debtor. If the debtor is not served, the demand does not provide a basis for a bankruptcy petition to be presented to the court. In a recent case, a deputy Chancery judge held that this must be strictly adhered to, even if the debtor became aware of the demand via a different route but without formal service of it on him. The judge held that the section was "extremely clear", and the words "but only if" in it meant that correct service was a prerequisite. In the case - Canning v Irwin Mitchell LLP - enquiry agents had purported to serve the demand at an address in Cornwall connected to the debtor but not one at which he had ever resided. Almost ten months went by before the court dismissed the solicitors' petition. The reference is [2017] EWHC 718 (Ch).

Precedent R

Budget discussion reports

Under CPR 3.13 these reports are to be filed seven days before the first case management conference following the filing of budgets (except by litigants in person). New precedent R contains the required format of the budget discussion report - click here to view the report. This follows the ten phases approach used in Precedent H, requiring it to be stated for each phase what was claimed by the budget-filing party and whether this was agreed or, if not, the sum offered by the other party or parties to the claim with an explanation. This relates to 'budgeted' and not to 'incurred' costs - as defined in the changes to CPR 3.15 and 3.18 (see the article below). The budget discussion reports themselves are to be agreed by the parties even if just to record how they disagree.

The point is to make the case management conference more effective.

What constitutes reasonable endeavours?

Asset Management v Atalaya Mining

In this case the Court had to consider whether an obligation "to use all reasonable endeavours to obtain the Senior Debt Facility.. and to procure the restart of mining activities in the Project on or before 31 December 2010" was enforceable. To assess that, the court had to look at two factors: (a) is the outcome that is to be achieved sufficiently certain and (b) can they make an assessment of whether the steps taken to achieve that outcome meet the relevant endeavours standard?

Changes to to CPR 3.15 and 3.18

In force from April 2017

On 6 April 2017 some clarifying changes were made to CPR 3.15 and 3.18 - the costs management provisions.These make it explicit that a court may:

  • manage costs yet to be incurred (referred to as the budgeted costs) by either recording the extent of the parties' agreement of the budgeted costs, or approve the budgeted costs (if not agreed) after making revisions to them; 
  • record either the extent to which costs already incurred have been agreed between the parties, or the court's comments about the incurred costs if they have not been agreed (CPR 3.15).

CPR 3.18 deals with the court's powers on assessment of costs at the end of a claim. On assessment, the court is required to have regard to the receiving party's last approved budgeted costs (and must not depart from them unless it establishes a good reason). It shall also take account of any comments made on the face of the cost management order about the incurred costs at that point. In summary, at a costs case management conference, the court cannot approve incurred costs, it may only comment on them. It can manage future costs by approving or varying the budget in which they are contained.

This distinction was always the intention and is now clearly set out.

The Great Repeal Bill

Civil jurisdiction and enforcement

The Government published a white paper on 30 March 2017 describing its plans to enact all EU law as domestic law at the point of leaving the EU. This is the heralded Great Repeal Bill. One of the areas of concern for dispute lawyers as a result of exiting the EU is the courts' jurisdiction and the enforcement of judgments in the EU territories. The Brussels Recast Regulation, which currently covers these issues among member states, provides for reciprocity. We can agree to recognise other countries' court judgments as now, but will their courts continue to recognise ours?

Although not providing details of how it will be done, the Government's White Paper indicates that this type of question is in mind and will be dealt with by March 2019.

"Simply incorporating EU law into UK law is not enough, however. A significant amount of EU-derived law, even when converted into domestic law, will not achieve its desired legal effect in the UK once we have left the EU. For example, legislation may refer to the involvement of an EU institution or be predicated on UK membership of, or access to, an EU regime or system.  Once we have left the EU, this legislation will no longer work.  Government must act to ensure that the domestic statute book continues to function once we have left the EU."

New Practice Direction C for CPR 31

Disclosure and inspection

A new practice direction was added to CPR 31 recently, covering applications for disclosure of "relevant evidence" in competition claims. (These are defined by reference to schedule 8A to the Competition Act 1998, and "relevant evidence" is defined as evidence that a person is seeking to have disclosed, or is seeking to inspect that relates to a competition claim.)

PD31C is in two parts: direct disclosure applications made against ordinary persons and entities; and applications where the evidence is considered to be in the files of the Competition and Markets Authority ("the Authority"). In both cases, an application must be made under CPR 23 and the party with the evidence named as a respondent to it. The court must apply a proportionality test using factors in the EU Damages Directive.

Applications under PD31C involving the Authority should be supported by the applicant's written evidence that:

  • the Authority has closed the investigation to which those materials relate;

  • no other person is reasonably able to provide that evidence.

For more information contact

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