Our pick of recent news and decisions on litigation and alternative dispute resolution procedures for construction claims.

If you would like more information on any of the topics below, please contact one of the team listed under Key Contacts.

• Proposals for new disclosure rules in the offing
• Advisory note for claims in the Business and Property Courts
• Proposals for fixed costs for lower-value claims in the multi-track
• Counsel's unavailability is not a good reason to delay hearings
• Litigating parties' behaviour must be cost-effective, efficient and in accordance with the overriding objective
• House of Lords review judicial appointments

Proposals for new disclosure rules in the offing

The changes made to the Civil Procedure Rules (CPR) back in 2013 introduced a new menu of disclosure options to make the process more efficient and ensure that costs are kept proportionate to the value of the claim.

However, despite a disclosure menu, the introduction of electronic disclosure procedures and advances in supporting technology that allow a much quicker sifting of documents, most parties still opt for the traditional "everything but the kitchen sink" approach. "Standard disclosure" remains the default choice for most - a process that obliges parties to make a reasonable search for and disclose all documents that adversely support or affect both its own and the other's case.

In reality, the current disclosure regime is based on and more applicable to paper and not e-documents. It is simply not fit for the deluge of electronic data that most litigating parties face – particularly in the type of complex, document-heavy, claims dealt with by the Technology and Construction Court.

In 2016, Sir Terence Etherton, a former Chancellor of the High Court, set up a working party to address the widespread concerns about the perceived excessive costs, scale and complexity of disclosure. Recognising that disclosure is a key procedural stage for most evidence-based claims, Sir Terence said:

"It is imperative that our disclosure system is, and is seen to be, highly efficient and flexible, reflecting developments in technology. Having effective and proportionate rules for disclosure is a key attraction of English law and English dispute resolution in international markets."

The working party, chaired by Lady Justice Gloster, has now published a draft Practice Direction which, once in force, is intended to effect a "wholesale cultural change" including a digital approach to disclosure, a change in lawyers' attitudes to disclosure and a shift in the judiciary to more proactive case management.

The proposed disclosure scheme, set out in the draft Practice Direction and a draft "Disclosure Review Document" (DRD), will be tested in a two-year pilot currently planned to start in early spring 2018. This pilot will be mandatory: there will be no "opt in" approach as we've seen on some other procedural changes.

Advisory note for claims in the Business and Property Courts

The Business and Property Courts (B&PCs), which include the Technology and Construction Court, came into operation on 2 October 2017. An updated version of the B&PCs' Advisory Note was published on 13 October 2017 and included a draft of the B&PCs Practice Direction. The note deals with, for example, the opening of new B&PCs in Newcastle and Liverpool, electronic filing, the types of cases that can be heard in each court, as well as practical details such as what titles to give cases issued after 2 October 2017. Further updates are expected. (Click here to read the Advisory Note.)

A separate guidance note relating to court orders and their production was issued at the beginning of November for application in the B&PCs in Leeds only.

Proposals for fixed costs for lower-value claims in the multi-track

As part of his 2010 Review of Civil Litigation Costs, Lord Justice Jackson introduced fixed recoverable costs (FRC) in "fast track" cases (for claims of up to £25,000) and "costs budgeting" for multi-track cases. Having waited for those reforms to "bed in", he published his latest report on FRC on 31 July 2017, in which he develops proposals to extend FRC to lower-value claims in the multi-track.

The aim in preparing this report was to analyse the ways in which costs recovery could be made more proportionate and thereby promote access to justice. The first paragraphs of the report set out the background succinctly:

"In England and Wales, the winning party in litigation is entitled to recover costs from the losing party. The traditional approach has been that the winner adds up its costs at the end and then claims back as much as it can from the loser. That is a recipe for runaway costs. The only way to control costs effectively is to do so in advance: that is before the parties have run up excessive bills. There are two ways of doing that:

(i) a general scheme of fixed recoverable costs (FRC);

(ii) imposing a budget for each individual case (costs budgeting)."

The views of a diverse set of interested parties were collated and the proposals include:

• a grid of FRC for all fast track cases (chapter 5);
• a new "intermediate" track with streamlined procedures for certain claims up to £100,000 (triable in three days or less with no more than two expert witnesses on each side) (chapter 7); and
• a voluntary pilot (with SMEs in mind) of a "capped costs " regime for commercial cases in B&PCs up to £250,000 with streamlined procedures and capped recoverable costs up to £80,000 (chapter 9). The trial, which should last no more than two days, should be held within eight months of the Case Management Conference.

At the heart of the review is the objective of promoting access to justice. "Controlling litigation costs (while ensuring proper remuneration for lawyers) is a way of promoting access to justice. If the costs are too high, people cannot afford lawyers; if the costs are too low, there will not be any lawyers doing the work."

Successful litigating parties should not lose sight of the fact that fixed recoverable costs in litigation proceedings will almost always be lower than the actual cost of legal fees incurred. Recovering fixed costs from the other party will still, again in almost all cases, leave the successful party liable to pay the balance of fees to its legal team.

The report is being reviewed by the Master of the Rolls, the Lord Chief Justice and the government and further consultation is expected before the implementation.

Counsel's unavailability is not a good reason to delay hearings

In a recent group action case, Mr Justice Fraser refused to take account of counsel's availability when fixing hearings in the proceedings. He even took the unusual step of issuing a written judgment with reasons on the basis the issue was likely to arise again.

Acknowledging that counsel of high repute "are extremely valuable in the marketplace and have many potential clients", the judge also recognised that senior counsel "all work extremely hard and it is a function of the independent Bar that they will usually have multiple cases underway simultaneously". While it was regrettable for one party to be deprived of its counsel of choice because of the date of the listing, it was not unusual. Provided reasonable notice is given, a replacement could be found.

Fixing court hearings around the diaries of busy counsel, rather than their fixing their diaries around the case, was a fundamentally wrong approach. When carrying out their case management functions, the courts cannot park a case indefinitely while the parties or their lawyers attend to other matters. Such an approach would lead to unacceptable delay and additional costs: delaying hearings must be avoided. Hearings would be fixed well in advance so that counsel would know when they were taking place and plan accordingly.

While this was not a construction case, the clash of court/counsel diaries is an issue that can affect complex, high-value cases such as those found in the Technology and Construction Court. Parties who instruct busy Queen's Counsel (QCs), and even senior juniors, should be aware that their unavailability for hearings or the trial is unlikely to be a good reason to delay the listing.

(Bates & Ors v. Post Office Ltd [2017] EWHC 2844 (QB))

Litigating parties' behaviour must be cost-effective, efficient and in accordance with the overriding objective

In Bates, the judge rounded off his judgment with a costs warning. He listed both parties' procedural failures in the case, which included: "failing to respond to proposed directions for two months; failing even to consider e-disclosure questionnaires; failing to lodge required documents with the court; failing to lodge documents in good time; refusing to disclose obviously relevant documents; resisting any extension to the 'cut-off' date for entries of new claimants on the Group Register; and threatening pointless interlocutory skirmishes".

In clear disapproval of the parties' conduct in the proceedings, the judge said:

"Such behaviour simply does not begin to qualify as either cost-effective, efficient, or being in accordance with the overriding objective. A fundamental change of attitude by the legal advisers involved in this group litigation is required. A failure to heed this warning will result in draconian costs orders."

Bates is further evidence of judicial robustness when enforcing the court's overriding objective of dealing with cases justly and at proportionate cost (under Civil Procedure Rule, Part 1). The judge reminded the parties that they have a duty to help the court to further the overriding objective and must co-operate between themselves, be constructive and conduct the case efficiently.

House of Lords review judicial appointments

The House of Lords Constitution Committee has issued a follow-up report on judicial appointments. As well as requesting "resolute and unflinching" support from the Lord Chancellor in defending the judiciary from personal attacks, the Lords considered:

• why it is difficult to retain and recruit judges, including: the difference between public and private sector pay; poor morale following the dispute about their pensions; the dilapidated state of the court buildings and the support functions; the retirement age; and the issue of judges returning to private practice;
• recruitment issues and how to ensure a steady stream of applications without lowering the high standard; and
• following limited improvement in the diversity of the judiciary, how to make high-level judicial posts open to a wider pool of applicants and the need for pre-application training.

To read the Select Committee on the Constitution, Judicial Appointments: follow-up, (7th Report of Session 2017-19, published 2 November 2017, HL Paper 32), click here.