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CPRC Snippets: October 2015

Papers from the 9 October CPRC meeting were published on 17 November 2015. It was the first meeting of the new legal year so there was a full agenda. Despite the time lapse between meetings taking place and the papers becoming publicly available, they provide a useful snapshot of how work has been progressing on ongoing initiatives, and can help to explain the rationale for rule changes.

MONEY, MONEY, MONEY!

Items on the October agenda highlight the continued focus on trying to reduce the costs of civil litigation, including:

  • An update on proposals to introduce fixed costs for clinical negligence cases.
  • Progress on tweaks to the costs management regime.
  • New requirements for bills of costs.

The “sensitive” issue of fixed costs in clinical disputes

The CPRC approved terms of reference for the CPRC sub-committee tasked with formulating draft rules to put into effect government policy on this issue. Amanda Stevens (Chair of the sub-committee), summarised progress to date: issues discussed include possible exclusions from the scheme.

No papers were circulated. It was noted that, due to the sensitivity of the proposals, there is a need for confidentiality (particularly as the Department of Health is at a pre-consultation stage). It was expected that substantial information would be available for the November meeting (which has now taken place).

Tweaks to costs budgeting and costs management

Coulson J, who chairs the CPRC sub-committee reviewing the operation of the costs management rules, reported on progress. He explained that recommendations agreed in principle at the July meeting had been incorporated into draft rules, noting that the actual rule changes required were “minimal”. Key changes include:

  • Amendments to exclude claims involving children from the costs management regime (and to provide that claims involving a claimant with a life expectancy of five years or less should ordinarily be excluded from costs management).
  • Changes designed to clarify the time for service of budgets (no later than 21 days before the first CMC if no date is specified in the notice served under CPR 26.3(1), unless the court orders otherwise).
  • The introduction of “budget discussion reports”, setting out the figures for each phase showing which are agreed and which are not, with a summary of the grounds of dispute. A precedent form will be annexed to PD 3E.
  • A new provision that there is no obligation to complete more than the first page of Precedent H where the value of a claim is less than £50,000 (as well as when budgeted costs do not exceed £25,000).
  • New wording expressly clarifying that, “It is not the role of the court in the cost management hearing to fix or approve the hourly rates claimed in the budget.”
  • Deletion of costs capping provisions.
  • The inclusion of guidance notes on Precedent H in an annex to the rules (rather than “buried away” on a website) and an express requirement for parties to follow that guidance. The guidance notes have also been revised. Some key changes include:
    • a new provision that, where the monetary value of the claim is less than £50,000, the parties must only use the first page of Precedent H (not entirely consistent with the draft revised wording in PD 3E.6, which simply states that there is no obligation to complete more than the first page);
    • wording designed to reduce the volume of documents sent to the court. It expressly provides that “save in exceptional circumstances”, parties are not required to lodge more than Precedent H and the budget discussion report;
    • wording clarifying that only “costs which are more likely than not to be incurred” should be included in the contingent cost sections. Coulson J explains that, “It is hoped this cuts down on endless ‘kitchen sink’ contingencies”;
    • guidance on the inclusion of assumptions, emphasising that assumptions should only be included if they “significantly impact” on the level of costs claimed (for example, the duration of the proceedings, the number of experts and witnesses or the number of interlocutory applications); and
    • a provision that time spent preparing the budget and associated material must not be included in any phase of the draft budget. The permitted figure will be added once the final budget figure has been approved by the court.

The CPRC agreed to the removal of the costs capping rules (CPR 3.19 to 3.21) and PD 3F but raised a number of technical and drafting points. Points of debate included the timing and filing of budgets, and the application of budget discussion reports. It was agreed that a redraft would be prepared for discussion at the November CPRC meeting. That has, of course, now taken place and we should know more once the papers are made available in December.

“Divvying up”: bills of costs

The CPRC considered draft amendments to PD 47 to add the following circumstances in which a bill of costs should be divided:

  • Where work has been done before and after 1 April 2013, the bill must be divided into parts to distinguish this (as different proportionality tests will apply).
  • Where a costs management order has been made, the costs are to be assessed on the standard basis and the budget has been agreed between the parties or approved by the court, the bill must be divided to distinguish costs claimed for each phase of the last approved (or agreed) budget, and distinguish between costs incurred before or after the date of that budget.
  • Where a costs management order has been made and the receiving party’s budget has been agreed by the paying party (or approved by the court), the costs of initially completing Precedent H and the other costs associated with the budgeting and costs management process must be set out separately.

These changes were approved subject to minor modifications, and will come into force in January 2016.

Keeping the options open: New form bill of costs pilot scheme

The CPRC was asked to consider whether the current new bill of costs pilot scheme should be made mandatory. Senior Costs Judge Gordon-Saker’s explanatory memo noted that the new format bill of costs would be a “huge change”. He also observed that current listing times mean that it is unlikely that many bills under the voluntary pilot will have been assessed before Autumn 2016, so 1 October 2016 would be a realistic start date for a compulsory pilot, which would run for two years. As J-codes are designed for cases being costs-budgeted, the pilot would have to be limited to costs budgeted cases.

The CPRC felt that more information was required before a decision could be made: for example, feedback from the voluntary pilot and the consultation process, particularly an understanding of what consideration had been given to the economic burden placed on businesses obliged to use the new bill and software. It agreed to an extension of the voluntary pilot, until October 2016, but declined to make any further decision. The CPRC expressly noted that, if a decision was made to implement a mandatory pilot, appropriate notice, to allow professionals to prepare for the change, would be “essential”. In any event, it would not be introduced before October 2016.

BOTH ENDS OF THE LITIGATION PROCESS

Other topics up for discussion went from one end to the other in terms of the civil litigation process: at one extreme, continuing work on pre-action protocols and, at the other, considering enforcement measures, with an update on the work being done in respect of charging orders.

Pre-action protocol for debt claims

Papers relating to the draft pre-action protocol for debt claims have been largely superseded, as the revised draft agreed at the October meeting is currently out for consultation. Practitioners have until 11 January 2016 to comment. The consultation document helpfully explains the rationale for the drafting approach, and identifies specific questions on which views are sought.

A key issue is the amount of documentation that should be provided as of right to debtors at the pre-action stage. The memo to the CPRC sets out the pros and cons. Interestingly, it also records that, due to concerns about whether obligations in the pre-action protocol might be inconsistent with obligations of regulated firms under the FCA Handbook, the FCA was also given sight of the draft.

Charging orders

District Judge Hovington provided an update on work to centralise the charging order process. He indicated that he would present details of the changes to centralise the attachment of earnings process (which would not be as extensive as those made to the charging order process) at the November meeting (which has now taken place). According to a memo dating from May, the aim is for these changes to take effect in April 2016.

MODERNISING THE COURTS

Against the backdrop of the Briggs LJ review and plans to modernise the courts (subject to budget availability), it is encouraging to see a number of initiatives aimed at modernising court practices.

Use of email

Changes discussed at this meeting to improve the receipt and sending of emails and make the system more secure in the context of County Court proceedings, were included in the practice direction making document relating to the 82nd CPR update. An amended PD 5B will take effect on 7 December 2015 (at the same time as equivalent changes in the Family Division). That said, the following points are still of some interest:

  • Future work will seek to include other jurisdictions such as the High Court, Companies and Insolvency.
  • It is recognised that the restrictions in PD 5B will limit the amount of process that can be submitted, but they have been imposed for a number of reasons, including:
    • current HMCTS IT capability;
    • to restrict the transfer of print costs to HMCTS; and
    • to limit the negative impact on HMCTS staffing levels.

Keeping the rules up-to-date online

Reference was made to an article by Professor Ian Scott, the outgoing editor of Civil Procedure News (14 July issue), in which he appealed for “orderly publication” of civil procedural rules in their various forms. Richards LJ stated that it was essential that the web version of the CPR was current, and that previous versions were accessible online, but said it was unlikely that there would be a return to an official consolidated paper version.

A compulsion for e-filing?

PD 51O (The Electronic Working Scheme Pilot), which came into effect on 16 November 2015, provides for CE-File (the courts’ new electronic filing system) to operate in the Chancery Division, the Commercial Court, the TCC, the Mercantile Court and the Admiralty Court in the Rolls Building (together, the Rolls Building jurisdictions), under a one-year pilot scheme.

Interestingly, papers for the October CPRC meeting flag up the need to consider whether use of the CE-File system should, in time, become mandatory for the filing of claims in the Rolls Building courts. The following observations are of particular interest:

  • When many of the larger City firms have switched entirely to CE-File, there might be a case for making the system mandatory for all court users.
  • Data suggests that, unless usage is mandated, uptake for such systems seldom goes beyond 30%. A 30% uptake would be “disappointing”, not least as it provides cost savings for HMCTS, can provide statistics and management information about the courts’ work that would otherwise take hours to compile, and streamlines and modernises the filing process (allowing filing online 24 hours a day, 7 days per week), also reducing the need for counter services at the Rolls Building.
  • Although there are clear benefits in making the system mandatory, the potential impact on access to justice needs to be considered: particularly for litigants in person. Some potential ways this might be addressed are suggested: for example, making use of the system mandatory only for solicitors and barristers, or providing a terminal for public use at the Rolls Building.

CPRC Cymru?

Richards LJ noted that there is an increasing likelihood of different procedural rules developing for England and for Wales. A sub-committee (to include a district judge based in Wales and, if possible, a Welsh-speaking High Court judge) is being formed to address this issue.

OPEN JUSTICE

In previous CPRC Snippet posts, we have reported on work by a sub-committee (chaired by Richards LJ) considering access to documents by the press. This initiative arose out of requests from the press for improved access to materials, such as skeleton arguments, necessary for reporting purposes. A new paragraph 33 to be added to PD 52C has now been approved. The papers circulated for the meeting include an interesting summary of the consultation responses.

Continuing on the theme of “open justice”, the planned 2015 open CPRC meeting (that, we previously reported, was hoped to take place in November) did not take the form of an open meeting after all. It is only to be hoped that there will be an open meeting next year…

These are just selected examples of the topics up for discussion at the October CPRC meeting. To view the papers in full on our website, see the resources page and the section headed “Civil Procedure Rule Committee Meetings”. The papers include the approved minutes, which provide a useful summary of all of the matters discussed.

Practical Law Dispute Resolution Beverley Barton

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