COMMENCEMENT

In the absence of special agreement defining when arbitral proceedings are ‘to be regarded as commenced’, section 14 of the Arbitration Act 1996 (England and Wales) states that (i) when the arbitrator is ‘named or designated in the arbitration agreement’, commencement occurs when a party serves notice in writing requiring the other party to ‘submit that matter to the person so named or designated’; (ii) if the parties are to appoint the arbitrator(s), the date is when one party servers notice in writing requiring the other party to appoint an arbitrator or to agree to one's appointment; (iii) when a ‘person other than a party to the proceedings’ is to appoint the arbitrator(s), the date of commen cement is when a party give notice in writing to that person requesting such an appointment.

TIME ISSUES

‘The Limitation Acts’ apply to arbitral proceedings. The relevant limitation statute might be the (English) Limitation Act 1980 (8.04, vol I), or ‘any other enactment (whenever passed) relating to the limitation of actions’, or it might be the Foreign Limitation Periods Act 1984.

As noted at 8.107, vol I, the court has a power to decide not to apply a foreign limitation period if it will lead to undue hardship.

The general rule of limitation is a six-year period. More precisely, that rule applies when English law is applied to the substance of a dispute which is, or is to be, referred to arbitration in England (the seat being England and the Arbitration Act 1996 (England and Wales) then governing the arbitration). In this situation the general rule is that a contractual claim must be brought within six years from the date when the cause of action accrued. But this is subject to these qualifications: (i) if the claim is based on a deed, the period is twelve years; or (ii) the six year rule might also be affected by one of the special factors specified in section 32 of the Limitation Act 1980 applies; or (iii) (in the case of a debt), the creditor might have acknowledged the debt or made a part payment (provided the action has not already become barred under the limitation rules) and the relevant proceedings are brought within six years (twelve, if the debt arises under a deed) from the date of that acknowledgment or part payment.

INTRODUCTION

The purpose of this chapter is to note two trends. Neither trend is peculiar to England. First, there has been a sustained attempt to control court proceedings and to render them more efficient. In England the four main manifestations of the struggle to control court litigation and render it more efficient are: (i) an institutional bias against trial (avoidance of trial and promotion of settlement and mediation); (ii) greater use of pre-trial case management by judges; (iii) expanding the ‘no-win, no-fee’ system of remunerating litigation lawyers, and curbing public civil legal aid; and (iv) restrictions on appeals.

But the second trend is that there has been greater resort to non-judicial modes of dispute resolution, notably mediation and arbitration. It is perhaps ironic that despite intense activity aimed at reforming, improving and refining civil proceedings, the demand for alternative sources of civil justice has not abated, but in fact has grown. It does not appear pessimistic, but rather a realistic conclusion rooted in long experience, to declare that modern court systems (sources of ‘public justice’) are unlikely to improve to the point that mediation and arbitration (sources of ‘private justice’) cease to be attractive alternative forms of justice. The pragmatic and positive modern perspective is to accept that the public and private systems are complementary and mutually supportive. It makes sense to speak of a ‘binary system’ of public and private justice. The challenges are to continue to improve all elements of the binary system: enabling the court system to perform better; ensuring that arbitration and mediation are conducted fairly and efficiently; and promoting the harmonious co-existence of – a happy marriage between – the public and private systems.

THE LANDSCAPE OF CIVIL JUSTICE

The Four Forms of Civil Justice: Disputes can be adjudicated by courts, or resolved by arbitration, or settled by mediation, or the parties can spontaneously reach unmediated agreements of settlement. These are the ‘four forms of civil justice’: courts, arbitration, mediation, and (unmediated) settlement.

Mediators, Arbitrators and Judges: Of these ‘four forms’, the first three involve reference to a neutral third party or panel of third parties.

INTRODUCTION

This chapter concerns the first two stepping-stones for the opening formal stages of the case: (i) issue of the originating process (a document formerly known, within the pre-CPR High Court practice, as a ‘writ’, but now known, both in the County Courts and High Court, as a ‘claim form’); and (ii) service of the claim form on the defendant. As noted at 4.01, the pre-action stage is a precursor to commencement of formal proceedings.

PRE-ACTION PROTOCOLS

ISSUE OF THE CLAIM FORM

Under the CPR the main form of commencement is by issue of a ‘claim form’. The rules preserve the claimant's right to elect to include the particulars of claim in the claim form or whether to serve these later, within 14 days of service of the claim. Accompanying the particulars of claim, the claimant must serve ‘response pack’ forms enabling the defendant to defend the claim or to admit the claim, and to acknowledge service. The claimant's failure to use the correct form when commencing process will not be fatal. In Adams v. Ford (2012) the Court of Appeal held that a claim form was not a nullity even though the claimants’ solicitor's statement of truth was deliberately false because it contained names of claimants who had not in fact authorised the relevant solicitor to issue proceedings on their behalf. In this case a large collection of claimants had been bundled together in a single claim form. Proceedings had been issued in a rush in order to beat the limitation deadline. It would have been better for the claimants’ solicitors to have made clear which clients had authorised proceedings. But it would be disproportionate to strike out the amended claim form, in which the truly authorised set of claimants was now properly listed.

DATE OF COMMENCEMENT OF PROCEEDINGS

The time of commencement of civil proceedings is the date entered by the court on the claim form. For limitation purposes, a claim is ‘brought’ as soon as the claim form is ‘received in the court office’.

PART 8 PROCEDURE

A ‘Part 8 procedure’ replaces the originating summons. This mode of commencement is used where the claimant seeks ‘the court's decision on a question which is unlikely to involve a substantial dispute of fact’.

INTRODUCTION

All these procedures precede trial. Interim relief exists to supply short term relief, pending the case's final resolution at trial, whereas the aim of summary judgment, striking out and default judgment is to dispose speedily of the entire case. Protective relief (21.01 ff) does not concern the substance of the case but instead preservation of assets or evidence in order to keep open the prospect of achieving eventual full justice.

Interim Relief: An interim judgment can take one of two main forms. If the claimant is seeking an injunction or specific performance at trial, the court can order a pre-trial interim injunction (or an ‘interlocutory injunction’). If the claimant is seeking pecuniary relief at trial, the court can make an interim order for the payment of a debt or a proportion of the damages likely to be awarded at trial.

Accelerated Final Judgment: The two main cases of accelerated final judgment are judgment by default and summary judgment.

Judgment by default takes place when the defendant fails to defend or indicates that it is unwilling to defend.

Summary judgment (under CPR Part 24) is awarded if the claimant or defendant has ‘no real prospect’ of success at trial. And when the court strikes out a party's defence or claim, the result is that this party has effectively lost the case, and so this process is tantamount to ‘final judgment’, even though in some situations a claimant remains free to bring a fresh action concerning the same cause of action. For this reason, striking out procedure is included within this chapter.

INTERIM PAYMENTS

Interim payments were at first confined to protecting claimants in personal injury or fatal accident claims. In 1978 the system of interim payments was expanded to cover all damages or debt claims. An interim payment order enables the claimant to obtain advance payment, oft en well before trial.

The payment will be a ‘reasonable proportion’ of the claim. The court can order an interim payment if the defendant has admitted liability, or judgment on the question of liability has already been obtained, or the court ‘is satisfied’ that, if the case went to trial, the claimant would obtain judgment for a ‘substantial’ monetary award against the defendant, other than costs.

THE COMMERCIAL COURT: A MAJOR

‘BUSINESS COURT’

This court, which sits in London, is part of the Queen's Bench Division within the High Court. The Commercial Court has its own ‘list’. And it has its own detailed procedural code: The Admiralty and Commercial Courts Guide, a document of surprising richness, amounting to almost a free-standing procedural code for ‘big ticket’ commercial litigation. The Commercial Court deals with the top tier of commercial High Court business. The court's case load consists of familiar commercial transactions, such as charter parties, commodity sales, insurance, and re-insurance. The court also hears appeals from arbitration falling within the scope of the Arbitration Act 1996. There has been substantial investment in the Commercial Court in central London. The new Rolls Building in Fetter Lane in London is a substantial court centre dedicated to High Court litigation, especially in the field of commercial law. It is hoped that improving such facilities will maintain the English legal system's competitiveness in the global market for sophisticated civil dispute resolution. The need to promote English law in the global market-place was the theme of a High Court judge, Sir Geoff rey Vos, in his 2011 KPMG lecture, ‘The Role of UK Judges in the Success of UK PLC’.

Distinct from the Commercial Court is the London Mercantile Court. The latter also deals with business disputes, national and international. But its cases are of lesser financial value and complexity. There are also Mercantile Courts at seven provincial venues. Another court, the Technology and Construction Court, also based in London, has jurisdiction over building construction contracts and transactions concerning information technology. There is also a Patents Court. But here the focus is on the Commercial Court.

Commercial Court judges hear all pre-trial applications, including case management hearings. This contrasts with the general pattern in the Queen's Bench Division where full High Court judges (‘puisne judges’) are generally involved in civil litigation only at trial and Masters hear many pre-trial matters.

The court recognises that there is a global market for commercial litigation. It aims to stay at the ‘cutting edge’ of techniques and to provide a high-quality service to its users.

THE SLOW PROCESS OF APPOINTMENT

In his Cambridge lecture (2007), Stephen York, drawing upon his experience of English and international arbitration, suggested that steps should be taken to ensure prompt appointment of arbitrators. It is common for the selection process by party-appointment to take several months. This is a source of delay and expense. The position is unsatisfactory.

SOLE ARBITRATORS

In English arbitration law, the default size of the tribunal number is one arbitrator: ‘If there is not agreement as to the number of arbitrators, the tribunal shall consist of a sole arbitrator.’

The singleton arbitrator remains common in England (and the LCIA Rules reflect this). This arrangement was favoured by a majority of respondents to consultation on the 1996 Bill. The ICC Rules (2012) also state that, in the absence of contrary agreement, an arbitration agreement will be taken to involve appointment of a sole arbitrator (under those Rules), although this presumption can be rebutted if the ICC thinks that on the facts a three-member panel might be ‘appropriate’.

There are arguments in favour of using sole arbitrators. Such an arrangement is cheaper. It also works well if there are more than two parties. Another benefit is that the sole arbitrator is less inclined to strike a crude compromise between rival submissions and positions. But a three-arbitrator panel is divided by the wing-members’ opposite leanings.

However, there is the disadvantage that the sole arbitrator might be imposed on the parties by an institutional arbitration system if the parties have not nominated the arbitrator, or by the court (12.13).

The burden of making a decision in a heavy case can be considerable, and the sole decision-maker might not always be on top form, even if the individual's general reputation is strong. There is safety in numbers.

Furthermore, a three arbitrator panel allows each side to select their appointee, the third member being quite insulated from unilateral choice. The party-appointee system can foster (i) a sense that each party has a ‘judge of its choice’; (ii) and a further sense of ‘investment in the arbitration’; and (iii) that (certainly in an international context) the parties’ appointees can help resolve linguistic and cultural differences, and avoid misperceptions. But there can be fissures and inefficiencies created by having more than one arbitrator.

INTRODUCTION

ABSENCE OF ENGLISH LEGISLATION ON CONFIDENTIALITY

This topic was not covered by the Arbitration Act 1996 (England and Wales) because the Departmental Advisory Committee (1996) regarded the subject as too fluid for consolidation. That report stated that recognition of exceptions to confidentiality would need to be worked out by the courts on a case-by-case basis. As we shall see, there is no clearly delineated set of exceptions. This topic continues to be molten. Indeed, the exceptions have been described as ‘manifestly legion and unsettled in part’.

COMPARATIVE SOURCES

The judgments in Emmott v. Michael Wilson & Partners Ltd (2008) contain rich citation of the English case law, and foreign courts’ decisions, as well as the relevant rules adopted by leading arbitration bodies8 on the question of ‘privacy of hearings–9 ‘confidentiality of documentation’, ‘confidentiality of awards’, and literature discussing these rules.

Since the Michael Wilson case (2008), there has been some development of this topic in Scotland: an important judicial decision (Gray Construction Limited v. Harley Haddow LLP (2012), on which 8.20 ff below), and legislation (the Arbitration (Scotland) Act 2010), containing a codification of the whole topic. Of course, Scots law remains separate from English law, so that these Scottish materials are merely of comparative interest. Nevertheless, the analysis of various exceptions to confidentiality is attractive, and the pre-2010 Act decision in Gray Construction Limited v. Harley Haddow LLP (2012) is a convincing illustration.

As the (English) Departmental Advisory Committee (1996) noted, Australian decisions have been perceived in England as troublingly ungenerous in their protection of arbitral confidentiality: England and Australia have here parted company.

IMPLIED TERM ANALYSIS

The (English) Court of Appeal's decision in Emmott v. Michael Wilson & Partners Ltd (2008) confirms that an obligation of confidentiality arises as a matter of law (on the basis of an ‘implied term in law’) in arbitration references conducted in accordance with English law. This implied term has been recognised for some time. For example, the Court of Appeal in Ali Shipping Corporation v. Shipyard Trogir (1999) had said that this term is ‘an essential corollary of the privacy of arbitration proceedings’. (For a Scottish decision adopting the same analysis, see Gray Construction Limited v. Harley Haddow LLP (2012), on which 8.20 ff below).

TRIAL

Trial is important because it is the beginning of the ‘end-game’ of litigation before the courts. Thereafter, provided the claimant has been successful (or the defendant's counterclaim has been upheld), enforcement proceedings might be brought, for example, to obtain satisfaction of a judgment debt. Enforcement is also possible if judgment in favour of the claimant has been obtained by some other means, for example, by summary process or by ‘default judgment’, or judgment has been obtained because a defence has been dismissed following the defendant's failure to satisfy an ‘unless order’, or a ‘consent judgment’ has been entered.

A final judgment on the merits of the case has a binding effect, as between the parties. The topic of ‘finality’, especially res judicata, is part of this ‘end-game’, therefore. Apart from appeals, for which permission is required, English law is opposed to unnecessary re-litigation of the same issues and claim.

But trial is rare. Many actions end without trial. Indeed most disputants do not bring or become embroiled in formal civil proceedings. Of those who do become parties to court proceedings, most do not experience trial, because the case is either settled or a form of summary judgment or dismissal terminates the case before a final hearing. When these mountains of non-litigated disputes and litigated but untried cases are subtracted from the pile, all that remains is a relatively small percentage of cases where a court has pronounced final judgment on the merits, after hearing witness testimony.

Admittedly, the historical centre-piece of the Common Law civil process has been ‘trial’. In the nineteenth century Common Law courts in England, trial was an oral hearing before a judge and jury. In the United States of America civil trial before juries remains a constitutional right. England has been more pragmatic. In modern times, civil trials in England are almost invariably heard by a judge sitting alone without a jury. Jury trial in England is now confined to serious criminal cases (for example, murder, rape, armed robbery) and civil actions for defamation (even here there is the possibility of trial by judge alone), or misconduct by the police (the torts of defamation, malicious prosecution, and false imprisonment).

PRIVILEGES IN GENERAL

‘Evidential privileges’ in English law confer upon the privilege holder immunity against legal compulsion to supply information, whether at trial or at some other stage of the legal process.

The duty to disclose confidential information, unless it is privileged, is noted in the preceding chapter, at 11.32 ff. As for confidentiality in general, the Court of Appeal has recently reviewed this topic in Imerman v. Tchenguiz (2010: also on that case 14.66 ff), and there are several leading treatises. The main point here is that not all confidential information is privileged. For example, confidential discussion between a person and a priest or religious advisor, or between a patient and doctor, and in many other professional relationships, is undoubtedly subject to legal protection through injunctions and pecuniary relief. But the holder of those types of confidentiality cannot invoke privilege if ordered by the court to give evidence or produce documents relating to this information. In short, privilege is confidentiality admitted to a higher level of legal protection; but not all confidential relations are raised to that level.

DISCLOSURE AND DISPUTED CLAIMS TO PRIVILEGE

The procedure governing a challenge to a claim to privilege was examined by Beatson J in West London Pipeline and Storage Ltd v. Total Oil UK Ltd (2008). This and related cases are examined at 11.40 ff.

LEGAL ADVICE PRIVILEGE

NATURE OF LEGAL ADVICE PRIVILEGE

Undoubtedly the most important of the family of privileges, legal advice privilege operates as an absolute protection because: (i) it cannot be disapplied by exercise of judicial discretion (see the next paragraph); and (ii) unless this privilege is waived by a privilege holder (or his authorised agent), protection endures beyond the immediate occasion or context of the privileged communications. The party cannot be called to give evidence of, or produce any document containing details of, confidential discussion between a client and a lawyer concerning the law and its application. In the United States it is known as ‘attorney–client’ privilege (Upjohn Co v. United States, 1981).

INTRODUCTION

This fundamental but intricate topic is moving at a brisk pace. It will be some time before the dust settles on changes which are currently before Parliament but which, by the time this work is published, seem destined to have transformed the ‘no win, no fee’ portfolio for English litigants. This shifting position can be summarised in four propositions.

First, at Common Law (20.07 ff) it remains contrary to public policy for a lawyer representing a client (whether a solicitor or a barrister) to have a financial interest in the outcome of the litigation, that is, his remuneration (or the level of that payment) is contingent on the outcome of the dispute.

Secondly, conditional fee agreements (20.25 ff) were introduced in 1990, and were partially implemented in 1995, and then fully implemented in 1998. But the system ran into trouble when the success fee and ATE (‘after-the-event’ legal expenses insurance) elements of this system became recoverable by the victorious party against the defeated party (the latter being the ‘paying party’). This precipitated a wave of costs litigation by aggrieved paying parties, who disputed the scale of these sums in individual cases.

Thirdly, English law was highly hesitant (20.11) to take the further step of introducing, at any rate within ordinary civil litigation, the USA system of contingency fee remuneration: that is, the successful party's lawyer is remunerated only if he wins, but his payment is a percentage of the ‘damages pay-out’ (either as a result of a successful settlement or judgment).

Fourthly, English law, as a result of recent legislation (20.13), will enable litigants (on advice by their lawyers) to choose whether to fund the litigation by using the conditional fee agreement system or the contingency fee agreement style of remuneration (20.13 ff).

We should begin by examining the Common Law background. It will then be possible to consider the contingency fee system, and finally the conditional fee agreement regime.

INTRODUCTION

England has no separate ‘manual’ or ‘code’ dealing specifically with complex litigation.

Complex litigation might be defined as proceedings which involve an unusual level of difficulty and preparation by reason of: (i) the case's facts, including questions of a technical or specialist nature; (ii) the law applicable to the dispute; (iii) the number of issues within the overall dispute; (iv) the number of parties participating in the action, especially if they are separately represented, or there are significant variations between individual claims or defences (multiparty litigation (22.01 ff) is the most obvious type of complex litigation); (v) the variety of procedural steps taken during the evolution of the case, including one or more levels of appeal from those decisions; (vi) uncertainty concerning the applicable jurisdiction; (vii) overlaps between jurisdictions; or, finally, (viii) attempts to re-litigate the same, similar, or overlapping matters.

As the former Master of the Rolls, Sir Anthony Clarke (now Lord Clarke) has commented whatever its origins might be, one knows ‘complexity’ when one sees it. A leading American study of complex litigation fastens upon (i) legal and factual difficulty; (ii) large number of parties; and (iii) (with admirable candour) the authors add: ‘the amount of money or the stakes involved may prompt litigation efforts on such a scale that a case which would otherwise not be complex becomes complex.’

In England, complex litigation normally proceeds to the High Court. It will tend to concern, for example, intellectual property disputes, large fraud cases, judicial review of central and local government decisions, difficulties arising from detailed commercial transactions, insolvency proceedings following the collapse of large financial entities, and mass tort or other multi-party litigation. By contrast, relatively uncomplicated disputes concern small consumer claims, debt collection on undisputed facts, housing disputes, and straightforward claims for compensation where the law is clear and the facts (although disputed) are fairly readily ascertained. An example of exceedingly complex mass tort litigation was the group litigation which came before the Supreme Court in AB v. Ministry of Defence (2012) concerning alleged exposure to radiation during nuclear weapons testing in the 1950s and 1960s. In the event, the case was substantially abortive because the Supreme Court endorsed5 the Court of Appeal's refusal in that case to exercise the discretion to lift the limitation bar under section 33 of the 1980 Act (8.70). The claims were declared to be doomed to fail.