Changes to Civil Procedure Rules come into force

On 1 April 2013 the first wave of Jackson reforms was implemented into law.  The reforms will amend various parts of the Civil Procedure Rules 1998 (CPR) and will also change the way that the courts address the costs of litigation.  Much has been written about the proportionality of costs and success fees and 'after the event insurance' premiums becoming irrecoverable.  However, this article focuses on some of the other amendments to the CPR. 

General:  The courts will take a tougher approach to parties that fail to comply with their obligations under the CPR and CPR rule 3.9 will make it more difficult for a party to apply for relief from any sanctions for non-compliance.  All money claims will have to be issued online through Northampton County Court and, if defended, the claim will then be transferred to Salford County Court and then distributed to local courts. 

Case Management: Case management conferences will only take place where there is a need for one and will involve rigorous analysis of the likely issues in the case.  All other common cases will adopt standard case management directions. 

Small Claims: The monetary limit for small claims has been increased from £5,000 to £10,000.  The presumption that small claims costs rules will apply where the claim exceeds the small claims limit but has been allocated to the track due to agreement by the parties has been eradicated.  Expert fees have increased from £200 to £750 on this track. 

Disclosure:  For multi-track cases, with the exception of those containing personal injury claims, will adopt a new approach in relation to disclosure.  Parties will be obliged to file a report prior to the first case management conference which will contain all the documents that are relevant to the matters in issue, their location and the costs that may flow from standard disclosure.  The court will direct the parties to agree disclosure from a list of options which are set out in CPR rule 31.5(6).  Such options include orders that dispense with disclosure, that disclosure be given on an issue by issue basis or an order for standard disclosure. 

Expert Witnesses:  An estimate of the cost of instructing an expert and the issues that they are needed to address will have to be given by any party wishing to rely on expert evidence. So-called ‘hot-tubbing’, also known as ‘concurrent evidence’, will also be an option under the CPR.  This allows for both sides experts to appear in court together and be questioned on the same issues by the Judge in each other’s presence.  It also means that one expert can challenge the views of its counterpart directly.  The procedure is often used in Australian court rooms and has been piloted in Manchester TCC and Mercantile Court.

Allocation: Allocation questionnaires will no longer be issued but rather, in all claims except the small track, a court officer will allocate the claim automatically after the defence has been filed.  A notice of proposed allocation will be served on the parties and will contain directions along with a directions questionnaire to be completed by the parties.  The decision of allocation can be challenged under CPR rule 26.3.

Budgets: In multi-track cases, there will be a greater emphasis on costs management governed by section II under CPR Part 3.  Parties will need to consider at an early stage in proceedings an estimate of the time likely to be spent and the level of fee earner completing the work from pre-issue until trial.  These ‘budgets’ must be filed and exchanged within 28 days of service of any defence.  Litigants in person do not have to file these budgets but must be served with the budget of their opponent, if legally represented.  The budgets will have to be approved or amended by a judge.  These budgets can be re-visited throughout the proceedings with the final budget likely to be adopted when assessing the costs liability of the unsuccessful party.  

If a party fails to file a budget, then it will be assumed that the costs incurred are the court fees only.  If parties agree the budgets between them, then the court cannot intervene even if the costs are considered to be excessive.  An agreed or approved budget can only be exceeded if the party can show good reason for the excess.   There are exempted claims which include cases in the Admiralty and Commercial Courts, commercial cases worth more than £2 million and cases in the Chancery Division or specialist courts that are directed to be exempted.  The courts’ powers to make cost capping orders have also been extended under CPR rule 3.19(5) although parties can apply for such an order themselves.

FSA abolished and replaced by FCA and PRA

The City has a new behavioural watchdog in the form of the Financial Conduct Authority (FCA).  A second new organisation, the Prudential Regulation Authority (PRA), which is part of the Bank of England, is tasked with looking after all deposit-taking institutions, insurers and investment banks.

 

The FCA is headed by Martin Wheatley, who said in a speech last year that, in the wake of the outrage over mis-selling, that his policy would be “shoot first and ask questions later”.  The FCA’s published aims include:-

 

1.  Banning misleading financial promotions and removing them immediately from the market

 

2.  Making supervisory judgements about a firm’s business model and strategy and intervening if it sees unacceptable risks to the fair treatment of customers

 

3. Allocating fewer supervisors to specific firms but reacting to problems faster and carrying out more in-depth reviews across a particular sector or market

 

4. Bringing more enforcement cases with tougher penalties

 

5. Holding senior managers to account and pursuing criminal prosecutions

Land banking company was operating collective investment scheme

In the FSA v Asset Land Investment Inc and others [2013] EWHC 178 the question for the High Court (Andrew Smith J) was whether the land banking scheme operated by the defendant(s) was a "collective investment scheme" within the definition of section 235 FSMA 2000. Investors were sold plots of land at a number of sites. In evidence, the investors said that they understood the company would seek planning permission for the land and to sell it to developers at a profit. However, the contractual documentation and other disclaimers in written communications stated that the company would not apply for planning permission or otherwise manage the plots. It was conceded on behalf of the defendants that such management would make the scheme an arrangement caught by section 235 and thus requiring regulation for authorised or exempt persons only to conduct. Any persons not so authorised are in breach of the general prohibition in section 19 and the FSA sought such declarations. Thus it was the defendants primary contention that the contractual and other disclaimers took the land banking scheme outside of s235 as they were not "arrangements" within the definition in that section. Andrew Smith J said that (para 154):"the purpose of the FSMA is, in part, to protect investors and the intention of the legislation must, in my judgment, have been to give them practical protection that does not depend upon an overly technical analysis of the contractual terms of their investments". He concluded that "arrangements" were made when the plots were marketed to the investors  "even if Asset Land had no intention of acting in accordance with them". He rejected the defendant's contention that the fact that investors could contractually deal with their individual plots as they wished meant that the company did not retain day to day control. Accordingly, he held that the defendants were operating an unauthorised collective scheme and gave judgment for the FSA accordingly.

High Court rules TFL ban on homophobic bus advert not unlawful

Mrs Justice Lang has handed down judgment in the case of Core Issues Trust v TFL [2013] EWHC 651 (Admin).  The Claimant had sought judicial review of TFL (Transport For London)'s decision to ban an advert from London buses.  The advert in question, commissioned by the Christian charity Anglican Mainstream on behalf of the Claimant, read “NOT GAY! EX-GAY, POST-GAY AND PROUD. GET OVER IT!”  The advert was a response to bus adverts run by the gay rights campaign group Stonewall which read “SOME PEOPLE ARE GAY. GET OVER IT!”.

 

The Claimant is a charity which claims to “[support] men and women with homosexual issues who voluntarily seek change in sexual preference and expression”.  The advert had originally been cleared to run by TFL's compliance committee, but was subsequently blocked by TFL following the involvement of the Mayor's office.  The decision to pull the advert followed a leak to The Guardian which had triggered a number of complaints, including that the advert implied that homosexuality was an illness that was to be treated. 

 

The Claimant brought an application for judicial review of TFL's decision on the grounds that it was irrational and breached Articles 9, 10 and 14 of the European Convention on Human Rights (freedom of religion and belief, freedom of expression and anti-discrimination).

 

Lang J found that TFL had applied its advertising policy inconsistently.  TFL had not banned the Stonewall advert or another advert placed by the British Humanist Association which read 'there's probably no God', both of which could be considered offensive.  However, Lang J held that the inconsistency was not sufficient reason to find that TFL's ban was unlawful.  This was because:-

 

 a)  advertisements on the side of London buses are highly intrusive;

b)  the advertisement would cause grave offence to a significant section of the many inhabitants of London; and, for those who are gay, it was liable to interfere with the right to respect for their private and family life under Article 8(1);

c)  it was perceived as homophobic and thus increasing the risk of prejudice and homophobic attacks;

d)  it was not a contribution to a reasoned debate;

e)  leaflets, articles, meetings and the internet all provide an alternative vehicle for the expression of the Trust’s message;

f)  under the Equality Act 2010, TfL was under a duty to eliminate discrimination and harassment against gays and to “foster good relations” “tackle prejudice” and “promote understanding” between those who have same-sex orientation and those who do not.  Displaying the advertisement would have been in breach of that duty. 

There was no breach of Article 14 and the Trust was not protected under the Equality Act 2010 because it was not an individual with sexual orientation and the individuals it represented (‘ex-gays’) are not a protected class of persons under the Equality Act. 

 

Article 9 was not engaged because the Trust was not an individual, religious community or church.  It was held that decision could not be characterised as irrational.

  

A full copy of the judgment can be found below:-

 

http://www.judiciary.gov.uk/media/judgments/2013/core-issues-trust-v-tfl

 

A reminder that fishing expeditions and inexplicable delay will not be tolerated

In Banwaitt and Dewji (2013), the Claimant alleged that he had been induced to invest in a land deal in Cambodia through fraud or negligence. A week prior to trial, the Claimant made an application for specific disclosure of the names of other investors and emails between them and Defendant. The application was refused firstly because there was no good reason for the delay in making the application and secondly because the Claimant’s hope that the emails might offer evidence in support of his claim was a clear fishing expedition.

Court of Appeal stresses need for specific justification where there is interference with Article 8 rights

In R (on the application of Catt) and (1) Association of Chief Police Officers (2) Commissioner of Police of the Metropolis; R (on the application of T) and Commissioner of Police for the Metropolis [2013] EWCA Civ 192, the Court of Appeal considered two cases concerning the retention of personal data by the police.

The first appellant argued that the police’s decision to keep written and photographic reports of him, concerning his involvement with a particular campaign group, on the National Domestic Extremism Database, in spite of the fact that he had never been convicted of any criminal offence, amounted to an interference with his right to private life under Article 8(1) ECHR. The second appellant also contended an interference with her rights under Article 8(1) ECHR, in her case relating to the police’s stated intention to retain a copy of a ‘harassment warning’ letter (issued to her in the absence of any finding against her or admission on her part) on their records for 12 years. In both cases, the decision at first instance had been that the police decisions were justifiable under Article 8(2) as they served legitimate purposes.

In allowing both appeals, the Court of Appeal held that the retention of the Claimants’ data did amount to an interference with their Article 8 rights and that interference could not be justified on the facts of either case. In respect of the first appellant, the police had failed to show that the information relating specifically to the appellant was of significant value to their wider aims relating to the campaign group (and therefore the public interest). In respect of the second appellant, there was justification for retaining a copy of the letter for a limited period because it may help to demonstrate a course of conduct amounting to harassment. However, the Court was unable to see how this justification could prevail for longer than a year.

The wider point arising from both decisions is that the Courts will be minded to uphold Article 8 rights where the interference is systematic rather than justified on specific grounds.

Supreme Court considers 'prevention/detection of crime' defence in harassment cases

The Supreme Court in Hayes v Willoughby, have considered the scope of the defence under s.1(3)(a) of the Protection of Harassment Act 1997. Under that provision, a person cannot be found liable for a course of conduct that amounts to harassment if their conduct was pursued for the purpose of preventing or detecting crime.

 

The Appellant in the case before the Supreme Court had been accused of harassment after he pursued a campaign against his former employer beginning at the end of 2003.  The Appellant, Mr Willoughby, wrote in excess of 400 letters to public bodies including the police and Official Receiver alleging that the Respondent had committed fraud, tax evasion and embezzlement.  These allegations were duly investigated and it was decided that they were without merit.  Despite this decision, delivered in 2007, the Appellant continued his campaign and intrusively interfered in the Respondent’s personal affairs.  Mr Willoughby stated that he did so for the purpose of preventing/detecting the alleged criminal activities of the Respondent.

 

The court considered whether the test under s.1(3)(a) was a subjective or objective test.  Lord Sumption delivering the majority judgment stated that he did not doubt that there was a subject state of mind but that it was necessary to have a control mechanism.  He said that the control mechanism was to be found in the concept of rationality which is not the same as reasonableness.  He clarified that an alleged harasser, if he is to successfully rely on the defence, ‘must have thought rationally about the material suggesting the possibility of criminality and formed the view that the conduct said to constitute harassment was appropriate for the purpose of preventing or detecting it’.  If they had not conducted this exercise, then the defence would fail. 

Lord Reed, dissenting, suggested that to introduce a requirement of objective rationality went beyond the court’s scope of applying the law and meant reading in words which Parliament had not adopted in the legislation. 

The appeal was dismissed.