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Reforming the costs of civil litigation: 20th March 2013

Reforming the costs of civil litigation:  How the Jackson costs reforms will affect the TCC

20th March 2013

Star Speaker:  Mr Justice Vivian Ramsey

Location:  Royal College of Surgeons

Click here for further details.

Latest News

Energy Performance Certificate Regime changes

A number of changes to the Energy Performance Certificate (EPC) regime came into force on 9 January 2013 under the consolidated Energy Performance of Buildings (England & Wales) Regulations 2012. Most of these changes result from implementation of the 2010 EU Energy Performance of Buildings Directive.

If you intend to construct, sell or rent out a roofed construction, having walls for which energy is used to condition the indoor climate (also known as a building), then you should familiarise yourself with the requirements of the new regulations.

Display of Energy Performance Certificates

Since 9 January 2013, a new obligation applies to any building which both:

  • has a total useful floor area of more than 500m²; and
  • is frequently visited by the public.

Where an EPC has been made available in respect of the building / relevant part of the building, the EPC must be displayed in a prominent place clearly visible to members of the visiting public.

Fresh DCLG Guidance provides that a building "frequently visited by the public" means a building to which the public has an "implied" or "express" licence to enter and which is regularly visited by members of the public on a daily or near daily basis. This may well rise to uncertainty in many cases where the public have access to a building in practice.

It is not apparent from the regulations who needs to satisfy this duty. The DCLG Guidance states that the building "occupier" is responsible. There will be an ambiguity in particular for multi-let buildings. It would seem logical that it is the landlord who must display the EPC where an EPC of whole has been produced (probably in the building foyer), but there might also be requirements on individual tenants to display either the building EPC, or EPC of a demised part, in their individual premises. The safest course is likely to be for any tenant to display a copy of a valid EPC in their possession.

Where the display duty applies, there is also a duty to ensure that the EPC remains valid. This would mean that after 10 years, a new EPC would have to be prepared (if it has not already been replaced in the meantime), and that replacement EPC displayed as above.

The regulations do not appear to contain a penalty for failure to comply with this duty; we have asked for clarification from DCLG and await a response.

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Robbins v London Borough of Bexley [2012] EWHC 2257 (TCC)

This case affirmed that damage caused to your property by trees planted by a Local Authority might be recoverable. It highlights the need to notify the Authority as soon as damage is apparent so that the Authority is put on notice, which can prove to be very important in future litigation.

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UK Supreme Court decision in Prudential case

In November 2012 the Supreme Court heard an appeal against the Court of Appeal's decision in R (on the application of Prudential PLC & anor) v Special Commissioner of Income Tax & anor [2010] EWCA Civ 1094 confirming that legal professional privilege is restricted, at common law, to members of the legal professions. Various bodies including the Law Society, the Bar Council and the Institute of Chartered Accountants in England and Wales (ICAEW) were given permission to intervene in the Supreme Court. The timing of the judgment is uncertain, but we would expect it to be received in the first half of 2013.

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Jurisdiction and enforcement of judgments

Significant changes were adopted in December 2012 to the Brussels Regulation (Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters) but will not take effect until 10 January 2015. The recast Regulation (Council Regulation (EU) No 1215/2012) includes provisions to improve the position of parties against whom proceedings are brought in breach of jurisdiction or arbitration agreements (addressing the difficulties caused by the Court of Justice of the European Union (CJEU) decisions in Gasser and West Tankers) and will make EU Member State judgments immediately enforceable across the EU without the need for an intermediate registration process in the enforcing state.

Honorary President

James Hudson

TeCSA is delighted to announce that at the last AGM James Hudson has been voted as TeCSA’s new Honorary President from the start of January 2013, he was previously a Vice President and before that a past Chairman.

TeCSA wishes to thank John Bishop, our first illustrious Honorary President for his extremely valuable input to ORSA and TeCSA for the past 15 years.

Rupert Choat partner of CMS Cameron McKenna and Matthew E Smith Partner of K&L Gates have joined the TeCSA Committee with effect from 15 November 2012.

Procedure

Big Bang: The new rules in April 2013 (CPR 31.5A)

English courts have spent years tackling what many perceive to be unreasonably high and, in some areas, increasing litigation costs.  Much of this has been driven by disclosure (or discovery, whichever term you choose), a procedure that is synonymous with cost and complexity in construction litigation. In large commercial cases, disclosure often accounts for the greatest cost.

The  Civil Procedure Rules (CPR) first addressed this concern in 2005, when e-disclosure was added as paragraph 2A to Practice Direction 31 (PD 31). The courts obliged with some notable judgments like Gavin Goodale v The Ministry of Justice, in which Senior Master Steven Whitaker ordered defendants to produce limited electronically stored information (ESI) by “the least expensive and most proportionate exercise possible.”  Despite this, Jackson LJ, in his report of civil litigation costs, concluded that many parties were simply ignoring paragraph 2A. A working committee led by Senior Master Whitaker was convened to amend the rules. Now we have PD 31B, which came into force on October 1, 2010.

Following more than a year-long analysis by Lord Justice Jackson of litigation costs, the Civil Procedure Rule Committee has now approved a revision to the rules requiring parties to file and exchange detailed litigation budgets at the outset of each case. The new rules also permit the court to impose a cost management order, consisting of the budgetary agreements between the parties or, if necessary, the court’s approval of budget revisions where no agreement exists.

Currently there is no set window for tackling the costs of e-Disclosure, so it is often not addressed until relatively late in proceedings. Under the new rule, two weeks prior to the first CMC, parties will be expected to provide a report detailing a budget for standard disclosure, the details of any documents identified as relevant to the issues of case and the locations of those documents.

As most of you know it has been long-established in the Civil Procedure Rules that the costs of conducting litigation should be proportionate and satisfy the overriding objective. However, accurately forecasting and managing e-Disclosure costs have often been hard to achieve in practice. This reality is in part due to the mushrooming volumes of email and other electronic documents that form a typical e-Disclosure exercise. Another factor is the lack of precise metrics or case law as to what “proportionate” actually means in practice and it is this point that the judiciary has addressed in CPR 31.5A.

Significant change

From April 2013, a new CPR 31.5A will operate in conjunction with Practice Direction 31B (the disclosure of electronic documents) and will apply to all multi-track proceedings, except those relating to personal injuries and clinical negligence. In many respects, CPR 31.5A codifies existing best practice in relation to e-Disclosure, but it also introduces one significant change to the costs and disclosure regime - the requirement to agree to a budget for the disclosure exercise with the judge at the case management conference (CMC). The new disclosure rule is part of a package of case management reforms which will be coming into force at the same time.

New CPR Rule 31.5A will contain menu options for disclosure for large commercial cases and any cases where the cost of standard disclosure is likely to be disproportionate. The new rule 31.5 will come into effect at the same time as the other Costs Review reforms, and will operate in conjunction with PD 31B.5.2.

Under the new rule 31.5, there will no longer be a presumption in favour of standard disclosure. Instead, the court must decide “having regard to the overriding objective and the need to limit disclosure to that which is necessary to deal with the case justly” which of the following orders to make:

  • To dispense with disclosure;
  • To disclose documents on which a party relies, and request any specific disclosure required from the opponent;
  • To disclose documents on an issue-by-issue basis;
  • For disclosure on a “train of enquiry” basis;
  • For standard disclosure; or
  • Any other order the court considers appropriate.

Rule 31.5 also provides that the court may at any point give directions on how to conduct disclosure, and in particular decide:

  • What searches are to be undertaken, where to look, the appropriate time frame, by whom and the extent of any search for electronically stored documents;
  • whether to require lists of documents;
  • how and when to give the disclosure statement;
  • in what format to disclose documents (and whether any identification is required);
  • what to require in respect to documents that once existed but no longer exist; and
  • whether to conduct disclosure in stages.

Interestingly the final menu option could include a “keys to the warehouse” order in which the parties exchange all of their documents and decide which to use.

It is important to understand that the new disclosure rule is part of a package of case management reforms which will take effect 1 April 2013, though the rules are already being applied in some TCC Courts and classes of dispute. Lord Justice Jackson’s approach aims to ensure that the court and the parties focus at an early stage on the extent of disclosure required, which is crucial to controlling disclosure costs.

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