The proposed new intermediate track for civil litigation
Stephen Innes, barrister at 4 New Square, looks at the impact for direct access clients of the proposed new intermediate track for civil claims worth between £25,000 and £100,000
Background: the existing litigation tracks
Under the existing civil procedure regime, most civil claims are allocated to one of three "tracks”, which are used to determine the procedural rules and directions which apply and the level of costs which can be recovered by the successful party from the opponent:
• the small claims track: the general rule is that very little in the way of legal costs are recoverable in a claim on the small claims track; it catches claims valued at up to £10,000 (except in housing and personal injury claims, where the limit is £1,000);
• the fast track: the financial limit for this track is £25,000, although some more complex claims are excluded (typically those where the trial would last more than a day); for some types of personal injury claims, the costs recoverable from the other party are fixed in amount, and for all trials the recoverable advocate's fees are fixed;
• the multi-track: this is for all other claims worth more than the fast track limit and/or too complex for the fast track; costs are not fixed, but, subject to some exceptions, are subject to costs management – the process by which a party (other than a litigant in person) is required to file and serve a costs budget for the case early on in the litigation and for that budget to be agreed by the opposing party or fixed by the court.
Reviewing the rules
Lord Justice Jackson is a Court of Appeal Judge who, in the last 9 years, has produced reports on the costs of civil litigation, leading to the development of new costs rules. In January 2016 he gave a speech in which he suggested that fixed costs should be extended to all fast track cases, and to some cases in the multi-track worth up to £250,000.
In July 2017 Jackson LJ produced a supplementary report on fixed costs. This contains a number of recommendations, such as for extending fixed costs in the fast track. In this blog post I concentrate on one of his proposals: for a new track to be created, the "intermediate track”, between the fast track and the multi-track.
It is important to stress that Jackson LJ's proposals are only that: they have not changed the law, and will not have any effect unless they are approved by the Ministry of Justice after further consultation. However, the Government has expressed its aspiration to extend fixed costs, and it therefore seems highly likely that Jackson LJ's proposals, or something very much like them, will soon be carried into force.
Although Jackson LJ was considering fixing costs in cases worth up to £250,000 (and that may still one day happen) for the time being he has decided to concentrate on cases worth up to £100,000 (and over the £25,000 fast track limit) as he considers that in such cases there is greatest scope for the costs to be disproportionate to the amount at stake. His proposals for these cases in his new "intermediate track” have two strands:
• to fix the amount of the costs which can be recovered by either party from the other;
• to simplify the procedure for running such cases, so that the actual cost is lower and more predictable.
When will a case fall within the intermediate track?
These are the criteria for a case to fall within the intermediate track:
(i) the case is not suitable for the small claims track or the fast track;
(ii) the claim is for debt, damages or other monetary relief, no higher than £100,000;
(iii) if the case is managed proportionately, the trial will not last longer than three days;
(iv) there will be no more than two expert witnesses giving oral evidence for each party;
(v) the case can be justly and proportionately managed under the expedited procedure described in section 4 below;
(vi) there are no wider factors, such as reputation or public importance, which make the case inappropriate for the intermediate track;
(vii) the claim is not for mesothelioma or other asbestos related lung diseases;
(viii) alternatively, even if none of criteria (i)-(vii) are met, there are particular reasons to assign the case to the intermediate track. Examples given are:
• claims for non-monetary relief, where that would promote access to justice, eg a nuisance claim by a householder against an industrial enterprise, individuals of modest means bringing defamation claims based on internet materials;
• cases in which emotions are apt to run high, eg family business disputes or boundary disputes
The simplified procedures
The proposals for the simplified procedure are as follows:
Statements of case: each statement of case shall be no longer than 10 pages and shall be served together with any core documents which are not in the possession of other parties. If the limit is exceeded, the court at the CMC will simply order the claimant to re-draft the pleading more concisely and at its own expense.
Case Management Conference: the court will review and approve a list of issues, resolve any disputed document requests, consider Alternative Dispute Resolution, give directions and fix a date for the trial and (if it is needed) the pre-trial review. The court will also identify the specific matters to which any oral evidence should be directed and will limit the number of factual witnesses.
Disclosure in non-personal injury cases: the normal rules dictating which documents must be disclosed will not apply: Instead, each party shall disclose:
(i) the documents upon which it relies, in so far as not previously disclosed;
(ii) any documents or classes of documents which the court specifically orders at the CMC.
Factual evidence: written witness statements shall stand as evidence-in-chief. The total length of all the witness statements of a party shall not exceed 30 pages.
Expert evidence: oral expert evidence shall be limited to one or, if reasonably required and proportionate, two expert witnesses for each party. Each expert report shall be no more than 20 pages (except any necessary photographs, plans and academic or technical articles attached to the report).
Trial: oral evidence at trial shall be directed to the specific matters identified by the court at the CMC or subsequently. The court will set time limits for oral evidence and submissions.
Applications: so far as possible, all applications should be made at the CMC. Subsequently, the court will deal with an application without a hearing unless the court considers it necessary to hold a hearing. In appropriate cases that may be a hearing by telephone; the court will decide who shall pay the costs of any interim application and summarily assess them. Any such costs order will be additional to the fixed recoverable costs.
Handing down judgment: it will be possible to dispense with the attendance of parties or advocates, if they have agreed all consequential matters. Otherwise a short hearing is envisaged. Importantly, as discussed below, Jackson LJ proposes that the rules must all contain the proviso "unless the court orders otherwise”.
How these changes, if implemented, could affect you
It is entirely understandable that clients instructing direct access barristers wish to save money where possible, and, where they have a limited budget, will often decide that it is best spent on getting a barrister to help them for the trial, which is regarded as the most important aspect of the litigation and the stage where the barrister might be expected to make the biggest impact. However, in my experience, where litigants in person often struggle the most, and where specialist lawyers have the biggest advantage, is in relation to the complex civil procedure rules.
In civil cases, often the preparation of the case is at least as important as the advocacy at the trial itself, because by the time it comes to the eve of trial it may be too late to put things right if it is realised that a further witness should have been called, or a different point should have been pleaded in the statement of case, or further documents should have been requested or disclosed, and so on. Getting a barrister to give you a steer at an early stage on how to prepare your case for trial could, for modest cost, save you a great deal of trouble and expense later on.
If the proposals for the new intermediate track become reality, they could offer great benefits for litigants, in that their own costs (should they use lawyers) should be lower, and in that they should be able to know in advance what their opponent's costs will be, in case they lose. However, although the procedures will to some extent be simplified, paradoxically I believe that the benefits of getting early procedural advice from a barrister will be greatly enhanced:
(a) the value which the claimant gives the case will take on additional importance and will be subject to greater scrutiny: this is not just because it may determine whether or not the case falls within the financial limits of the intermediate track; it is also because the costs which are recoverable, although fixed, vary according to the value of the claim: the recoverable costs include up to 22% of the value of the claim; if the claimant wins, the value is the amount of damages awarded to him or her; however, if the defendant wins, the value is the amount which the claimant claimed at the start of the litigation; it is therefore not at all in the claimant's interests to exaggerate or overstate the value of the claim, since that will only increase the costs he or she has to pay if the claim fails; getting legal advice at an early stage on the realistic value of your claim is therefore potentially very prudent;
(b) the case management conference is going to take on great significance, as more than ever before it will determine the future course of the litigation:
(i) this may be the only chance to make any application, or at least to have it heard orally;
(ii) this is the opportunity to challenge the assigned band; the costs which are recoverable may vary substantially between the four bands of the intermediate track, which depend on the perceived complexity of the case;
(iii) there may be disputes about whether the case should be in the intermediate track at all: after the CMC, it will only be taken out in "exceptional circumstances” – but the implication may be that at the CMC something less than this will be required;
(iv) there is great scope for argument about the trial length;
(v) because all the rules are to apply "unless the court otherwise orders”, there may be scope for arguing that any of the usual procedures should not apply;
(c) as an example of where the usual procedures might need to be challenged, the standout situation is in relation to disclosure.
Disclosure is an area which often presents real challenges for litigants in person. Under the existing rules, you cannot cherry pick the documents you wish to disclose to the other side. As well as the documents which you wish to rely on because you think they may help your case, you must also disclose documents which may assist the other party's case or undermine your own case.
This works both ways, as it enables you to see the documents which the other party might otherwise prefer you not to see. However, the default provision for disclosure on the intermediate track does not include a requirement to disclose those potentially unhelpful documents. For example if you sue a professional adviser such as a solicitor, and you allege that he gave you some negligent advice over the telephone, it seems that in the intermediate track he would not ordinarily be required to disclose any attendance note of that conversation if he does not wish to rely on it.
There may well be scope for challenging that default provision, but the potential benefit will readily be appreciated here of specialist advice to help identify what documents might be expected to exist and to formulate arguments as to why they should be disclosed notwithstanding the default provision.
I would suggest that all direct access clients should, where possible, seek guidance on the procedural aspects of their case as early as possible. I anticipate that the benefits of doing so will become even more apparent if their case potentially falls within the new intermediate track, if and when that becomes a reality.
4 New Square