The Commercial Court Report 2018-2019

As I wrote in a previous blog, the Commercial Court report for 2017-2018 was the first for some years. The 2018-2019 report has just been published and is described on the judiciary website as an ‘annual’ report, so it seems we can expect the trend of yearly reports to continue.

The report for 2018-2019 covers the period from October 2018 through to the end of September 2019.[1]The court year begins on 1 October or the first working day thereafter.

Judges[2]Pages 6 and 22 to 23.

There are currently 12 Queen’s Bench Division judges nominated to sit in the Commercial Court.

At the start of October 2019 the judges of the Commercial Court were Teare J (Judge in Charge of the Commercial Court), and Andrew Baker, Bryan, Butcher, Carr, Cockerill, Jacobs, Robin Knowles, Moulder, Phillips, Picken, Popplewell and Waksman JJ.

Since the last report, Males and Phillips LJJ have been promoted to the Court of Appeal and Popplewell and Carr JJ will soon follow, and Walker J has retired.[3]As an aside: the retirements of Lords Clarke, Mance and Sumption left the Supreme Court without any Commercial Court expertise (Lord Sumption sat as a deputy), but Lord Hamblen, a former Commercial Court judge, has since been promoted from the Court of Appeal, and Lord Burrows, who sat as a deputy, has also been appointed.

The Court aims to have about eight judges sitting at any one time but this has not always been possible in recent years because all Divisions of the High Court are currently operating below strength.[4]This is due to a recruitment crisis: https://www.lawgazette.co.uk/practice/hiring-crisis-high-court-judges-in-line-for-47k/5070502.article; https://www.theguardian.com/uk-news/2019/jun/05/uk-high-court-judges-to-be-given-25-pay-rise-to-tackle-hiring-crisis.

The report says that the Commercial Court will gain some new recruits during the course of the year 2019 to 2020. Two new judges have in fact already been nominated to sit in the Commercial Court: Henshaw and Foxton JJ.

Deputy judges are used for applications and trials to ensure that targets for lead times can be maintained. Deputies will only be used either when the parties agree that the matter may be dealt with by a deputy, or when the Judge in Charge of the Commercial Court considers it suitable for the matter to be dealt with by a deputy.

Arbitration[5]Page 7.

There were four hearings of jurisdictional challenges under s 67 of the Arbitration Act 1996. A significant drop in s 69 applications[6]Appeal on a point of law under s 69 of the Arbitration Act 1996. from 87 to 39 was overshadowed by a dramatic fall in s 68 applications[7]Challenges on grounds of serious irregularity under s 68 of the Arbitration Act 1996. from 71 to 19. The Court hopes that this statistic reflects the fact that parties are appreciating the point made repeatedly by the Court in its judgments that the hurdle for s 68 applications is very high.

Disclosure pilot[8]Pages 16 to 17.

The two-year disclosure pilot was launched on 1 January 2019. It is anticipated that it will continue formally thereafter if it is deemed a success. The Court anticipates that 2020 will be key for getting feedback and encourages users to keep submitting this.

In the first six months of the pilot across the Business and Property Courts, in cases where a single model order was made, 53% were for Model C. Where multiple orders were made, 42% were for Model C and the rest either Model B or Model D. In the Commercial Court, 80% of cases opted for Model C.

The report says that in larger cases the disclosure pilot has led to a greater focus on narrowing the scope of disclosure, but that there is a concern that in lower value claims the process is increasing costs. This issue is being actively considered. Overall, there appears to be a need to be vigilant about not over-complicating the process, respecting the express duty of co-operation, and making sure that judges and lawyers alike keep hearing lengths under control.

The report says that there have been concerns about ‘game-playing’ with parties taking tactical positions on the completion of the Disclosure Review Document, and that encouragement to adopt a co-operative approach remains important. [9]Practitioners should take the hint, as Vos LJ, the Chancellor of the High Court, made clear at para 54 of his recent judgment on the disclosure pilot in McParland & Partners Ltd v Whitehead [2020] EWHC 298 (Ch): ‘It is clear that some parties to litigation in all areas of the Business and Property Courts have sought to use the Disclosure Pilot as a stick with which to beat their opponents. Such conduct is entirely unacceptable, and parties can expect to be met with immediately payable adverse costs orders if that is what has happened. No advantage can be gained by being difficult about the agreement of Issues for Disclosure or of a DRD, and I would expect judges at all levels to be astute to call out any parties that fail properly to cooperate as the Disclosure Pilot requires. Very few parties have taken the opportunity for disclosure guidance hearings, and parties are encouraged to think about this option.

Witness statements[10]Pages 18 to 19.

The remit of the Working Group established by the Commercial Court Users’ Committee to consider witness statements, chaired by Popplewell LJ, evolved to cover all of the jurisdictions in the Rolls Building. The final report completed in July 2019 was considered by the Business and Property Courts Board at the end of November 2019. The Board welcomed the report and endorsed in principle its main recommendations, as follows:

  • An authoritative statement of best practice should be formulated for the preparation of witness statements, with a harmonisation of the Guidesfor the Commercial Court, Chancery Division and Technology and Construction Court.
  • There should be a more developed factual witness statement of truth confirming that the objective of a witness statement and proper drafting practices have been explained to and understood by the witness, and a solicitor’s certificate of compliance to be signed if there are solicitors on record for the party serving the statement.[11]Witness statements are also receiving attention in other quarters: From 6 April 2020, a witness statement must state ‘the process by which it has been prepared, for example, face-to-face, over the telephone, and/or through an interpreter’: PD32, para 18(5), as amended by the 113th update to the CPR. See Gordon Exall’s Civil Litigation Brief blog for information on other forthcoming changes to statements of truth.
  • Oral examination in chief on particular issues or topics should be given active consideration at Case Management Conferences.
  • In the Commercial Court, page limit extensions should generally only be considered retrospectively at Pre-Trial Reviews, at the costs risk of the party serving if a required extension is not granted so that a statement has to be re-drafted and re-served.
  • Judges should be more ready, at PTRs or after trials, to apply costs sanctions or express judicial criticism where there has been non-compliance or bad practice.
  • Consideration should be given within each Business and Property Courts jurisdiction to the possibility of introducing a pre-trial statement of facts prepared by the legal team and served at the same time as witness statements, to serve as the main vehicle for setting out parties’ detailed factual narrative case, derived primarily from the contemporaneous documents, removing the temptation to use witness statements as a vehicle for doing that[12]For the current arrangements for introducing documents into evidence at trial, see the Commercial Court Guide, paras J8.6 and J8.7. and enabling them to be properly limited to any particular points on which factual witness testimony at trial may really add something.

The report says that the Working Group will oversee the work that will now commence towards implementing those recommendations. Andrew Baker J is taking over as chair of the Working Group following Popplewell LJ’s elevation to the Court of Appeal and the detailed initial work may be undertaken by one or more smaller groups reporting to the full Working Group.

Alison Padfield QC

Notes

1 The court year begins on 1 October or the first working day thereafter.
2 Pages 6 and 22 to 23.
3 As an aside: the retirements of Lords Clarke, Mance and Sumption left the Supreme Court without any Commercial Court expertise (Lord Sumption sat as a deputy), but Lord Hamblen, a former Commercial Court judge, has since been promoted from the Court of Appeal, and Lord Burrows, who sat as a deputy, has also been appointed.
4 This is due to a recruitment crisis: https://www.lawgazette.co.uk/practice/hiring-crisis-high-court-judges-in-line-for-47k/5070502.article; https://www.theguardian.com/uk-news/2019/jun/05/uk-high-court-judges-to-be-given-25-pay-rise-to-tackle-hiring-crisis.
5 Page 7.
6 Appeal on a point of law under s 69 of the Arbitration Act 1996.
7 Challenges on grounds of serious irregularity under s 68 of the Arbitration Act 1996.
8 Pages 16 to 17.
9 Practitioners should take the hint, as Vos LJ, the Chancellor of the High Court, made clear at para 54 of his recent judgment on the disclosure pilot in McParland & Partners Ltd v Whitehead [2020] EWHC 298 (Ch): ‘It is clear that some parties to litigation in all areas of the Business and Property Courts have sought to use the Disclosure Pilot as a stick with which to beat their opponents. Such conduct is entirely unacceptable, and parties can expect to be met with immediately payable adverse costs orders if that is what has happened. No advantage can be gained by being difficult about the agreement of Issues for Disclosure or of a DRD, and I would expect judges at all levels to be astute to call out any parties that fail properly to cooperate as the Disclosure Pilot requires.
10 Pages 18 to 19.
11 Witness statements are also receiving attention in other quarters: From 6 April 2020, a witness statement must state ‘the process by which it has been prepared, for example, face-to-face, over the telephone, and/or through an interpreter’: PD32, para 18(5), as amended by the 113th update to the CPR. See Gordon Exall’s Civil Litigation Brief blog for information on other forthcoming changes to statements of truth.
12 For the current arrangements for introducing documents into evidence at trial, see the Commercial Court Guide, paras J8.6 and J8.7.