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CPRC Snippets: December 2015

Papers from the 4 December 2015 CPRC meeting were published on 11 January 2016. This was the last meeting chaired by Richards LJ before his retirement. The Master of the Rolls, and others, thanked him for his excellent contribution to the CPRC.

As this was the last meeting of 2015, not surprisingly, much of the time was spent on finalising amendments due to be implemented in the Spring CPRC update, notably on work to centralise procedures relating to charging orders and attachment of earnings.

Interestingly, items 3 and 5 on the agenda (and the associated papers) have been redacted as “confidential”.

The agenda for the meeting suggests that there was further discussion of the proposed amendments to the costs budgeting and costs management regime, but no details are provided in the draft minutes. We understand that these changes might be introduced as part of the Spring update. If that is right, all should become clear in the (hopefully) not too distant future, once the relevant SI is published.

Fixed costs in clinical disputes

Work associated with the forthcoming consultation continues.

Amanda Stephens, who chairs the CPRC sub-committee looking at this, reported that some progress had been made, but there had not yet been time to produce illustrative rules to accompany the consultation. The sub-committee will provide a further update at the February CPRC meeting.

This suggests that the government’s consultation might not be taking place before the Spring.

Streamlining steps: charging orders and attachment of earnings

Amendments to the rules on charging orders were approved, for inclusion in the next CPR update. Very helpfully, it was agreed that a flowchart, designed to help people get to grips with the changes, should be published before the new rules themselves.

Amendments to rules on attachment of earnings were also agreed. Interestingly, though, it appears that there will be further changes to follow. The draft minutes record that the CPRC agreed that the drafting of “consequential changes to other parts of the rules” should not hold up inclusion of the main changes in the Spring CPR update.

Hopefully, these are minor points, and will not cause confusion.

2005 Hague Convention on Choice of Court Agreements: consequential amendments

The Hague Convention on Choice of Court Agreements 2005 came into force between the EU (except Denmark) and Mexico on 1 October 2015.

Amendments to the Civil Jurisdiction and Judgments Act 1982 (the CJJA 1982) and the CPR, introduced to facilitate the entry into force of the Hague Convention, also came into force on 1 October 2015 through the Civil Jurisdiction and Judgments (Hague Convention on Choice of Court Agreements 2005) Regulations (SI 2015/1644).

An explanatory memo from the MoJ identified some additional necessary changes to Practice Directions (amendments to PD 12 – default judgment, and further amendments to PD 74 – enforcement of foreign judgments) and attached suggested drafts. The CPRC approved the proposed amendments, subject to adding “more general internet links” to the relevant source materials.

The explanatory memo put to the CPRC expressed the intention for these changes to take effect on 15 February 2016. Currently, there is no sign of the SI implementing the changes, so it remains to be seen whether this timeframe will be met.

The Insolvency Express Trials Pilot Scheme is now leaving the platform…!

Insolvency Express Trials is an initiative intended to provide litigants in the Bankruptcy and Companies Court with a speedy, streamlined procedure, and an early date for trial or disposal of simple applications by the Bankruptcy Registrars.

An explanatory memo put to the CPRC for the December meeting refers to some key issues raised by the Judicial Executive Board, and attaches a note by Chief Registrar Baister, dated July 2015, addressing three key points:

  • The extent to which there had been consultation on the proposed pilot:

The Chief Registrar noted that the proposal was canvassed at the April 2015 meeting of the Bankruptcy and Companies Court Users’ Committee, which thought the procedure could be “advantageous to court users”. There was also ad hoc consultation with solicitors and Chancery Masters.

  • Why it was suggested that costs management should not apply to cases under the pilot:

The Chief Registrar noted that the costs of insolvency proceedings can be quite significant, and it is felt that costs management would be disproportionate and likely to add to costs and cause delay (observing that users suggest that costs management “routinely adds an average of £10,000 to overall costs”). He also made the point that, in many cases, the respondents will be litigants in person. He then identified the “checks of a kind that apply to almost no other category of legal proceeding”, in insolvency litigation, designed to ensure that costs are not disproportionate.

Interestingly, when referring to the costs of insolvency proceedings, the Chief Registrar made a specific reference to the fact that CFAs continue to pay an important part in insolvency proceedings and to the “continued carve out for insolvency proceedings from the general cut back in the use of CFAs”. Of course, he was writing in July last year. We now know (from a ministerial statement published on 17 December 2015) that the insolvency exemption will come to an end in April 2016.

  • Why fixed costs had not been considered:

The Chief Registrar noted that consideration was given to the possibility of fixed costs but the idea was rejected because the nature of the relief sought could vary considerably, and alternative or overlapping relief might be sought; a “one price” approach was hard to justify.

The memo states that the pilot scheme will be evaluated after 12 months (and then every six months after that), with the Chief Registrar to provide a report on:

  • The number of cases issued under the pilot.
  • The money value of each case.
  • The time from issue to trial.
  • Costs.

It adds that a few months before the pilot ends, the Chancellor of the High Court will assess its success, and decide whether it should become a “permanent feature of the Bankruptcy Court”.

The CPRC approved the introduction of the two year pilot scheme, with effect from from 1 April 2016 (according to the draft PD), subject to further work, with the MoJ, on improving the process for evaluating it.

The compelling matter of the new bill of costs

Papers considered by the CPRC included an interim response from Alex Hutton QC’s committee responsible for the new format bill of costs, summarising responses to the new bill and guidance that were issued to consultees in July 2015. Formal responses were received from about 30 organisations and individuals. The report makes for interesting reading.

Points worth noting include:

  • The primary concern is about how mandatory use of the new format bill of costs (and/or J-Codes) will be introduced and, in particular, when. The report notes that it seems that few firms have yet invested in software that will allow them to use J-Codes and produce bills of costs in the new format. It adds that this seems to be largely due to uncertainty about implementation and concerns that there might be future changes.
  • Linked to this, concerns have been voiced about transitional arrangements. For example, if a compulsory pilot applied to all costs budgeted cases where a final costs order was made from 1 April 2016, many of those cases would have been running for some years without the use of J-Codes, so that codes would have to be applied retrospectively. It has been suggested that that would be an onerous task.
  • The Hutton Committee recognises that the move from paper to electronic assessment is a “huge change” requiring substantial investment in new infrastructure. Many firms do already have the necessary infrastructure in place but, equally, many have not yet made the necessary investment, due to concerns about how the new bill of costs will be implemented. It concludes that, to break the “vicious circle”, practitioners need to know that the new bill of costs will be introduced, and that it is not possible to pilot the new bill of costs in any real sense, as practitioners will not make the necessary investment if there is any chance that it might be abandoned.
  • The Hutton Committee’s preferred approach (with an exception for litigants in person) is for the new format bill of costs to be introduced for all work undertaken after a given date for all cases subject to a costs management order. It suggests that 1 October 2016 might be a “realistic date” that would give practitioners time to purchase the software they need to produce new format bills of costs automatically. The committee hopes that this would also encourage the use of the new format for cases other than costs-managed cases. If the CPRC decides not to adopt this preferred recommendation, the Hutton Committee considers that there would be a “cogent case” for limiting the introduction of the new bill of costs to cases commenced from a date that will give practitioners time to adopt J-Code compatible software.

Other points raised (all of which are responded to by the Hutton Committee) include:

  • The new bill of costs is too complex.
  • There has been insufficient consultation.
  • It is unrealistic to think that a fully automated bill or budget can be achieved “at the touch of a button”.
  • How J-Codes might be extended to classes of proceedings not governed by the CPR.
  • Costs of implementing the changes (including investment in systems, training and access to justice).
  • Problems with changing working practices on time recording.
  • The scope of the new bill format.
  • Consequential changes to the CPR.
  • Technical issues.

At the December meeting, the CPRC concluded that the proposals “went beyond a pilot” and “had major implications for the profession”.

It was considered to be too soon to make any decision, and that there should be further careful consideration by the MoJ and the CPRC.

This is definitely a space to watch. As the Hutton Committee has identified, once definite timing is agreed, practitioners will need to put their own implementation plans in place, which may well require investment in new software and new time recording practices.

Forms reforms: proposed redraft of PD 4 and new annexes

The papers from the December meeting refer to work by a Forms sub-committee chaired by Master Roberts. There are two key aspects to this:

  • Work to improve access to court forms.
  • Revision of the forms themselves.

The CPRC approved a redraft of PD 4 designed to improve access to court forms by referring to indices of the current forms (arranged by subject, and alphabetically) and also identifying the key relevant CPR provisions. The list is a “single universal list” and will replace the current version of PD 4 which lists forms in three tables. Where possible, current form numbers will be retained.

A couple of points of interest in the new PD 4 include:

  • Confirmation that the forms can be modified as the circumstances require, provided that all essential information (particularly information or guidance for the recipient) is included.
  • A pointer that, where a rule permits or requires, a party intending to use an affidavit instead of a witness statement should amend any form to be used in connection with that rule so that the word “affidavit” rather than “witness statement” appears in the form.

The papers put to the CPRC included a zip file containing a significant number of court forms that have already been revised by the sub-committee. The draft minutes record that work to reduce the number of court forms will continue.

Welsh statutory appeals

The CPRC has been alerted to the fact that there are no specific procedural provisions on appeals to the High Court under enactments that relate solely to Wales (Welsh statutory appeals). Richards LJ concluded that it is “plainly desirable to plug this procedural gap” even though, currently, there are few Welsh statutory appeals, and suggested that specific provision should be included in PD 52D.

The CPRC approved the proposed amendments to PD 52D. Based on the original memo from Richards LJ, it appears that the changes are intended to come into force in April 2016.

These are just selected examples of the topics up for discussion at the meeting. To view the papers in full on our website, see the resources tab on the Dispute Resolution homepage and click the “Civil Procedure Rule Committee Meetings” link (found under the section headed “Essential resources”). The papers include the minutes, which provide a useful summary of all of the matters discussed.

Practical Law Dispute Resolution Beverley Barton

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