Procedure, damages and costs

In this chapter of our Annual Insurance Review 2019, we look at the main developments in 2018 and expected issues in 2019 for procedure, damages and costs.

Key developments in 2018

The focus in the drive to reduce the costs of litigation has shifted in the past year from costs themselves to the activities that generate those costs. The disclosure pilot began on 1 January 2019 in most business and property courts (including the Commercial Court and the Technology and Construction Court), and a working group is currently consulting with the profession to reform the rules on witness evidence.

Although we have had a menu of disclosure options since 2013 intended to demote standard disclosure from the default to one of a number of options, it has been largely ignored since its inception with practitioners quickly retreating back into their comfort zone and agreeing standard disclosure in almost all cases. Under the disclosure pilot, that is no longer an option. Litigants must prepare and exchange initial lists of documents with their pleadings, although they do not need to carry out any searches. These documents relate to the case issues. If either party wants extended disclosure (which is not the norm), they must engage in detailed discussions before the first Case Management Conference in order to produce a Disclosure Review Document setting out their proposals. The court will then make an order for disclosure in the form of one of five model orders (ranging from disclosure of known adverse documents only to wide search-based disclosure). If no extended disclosure is agreed or ordered, the parties simply need to certify that all known adverse documents have been disclosed.

The pilot has the potential to reduce the costs of the disclosure process, but success relies heavily on co-operation between litigants. This is in line with the overriding objective but at odds with our adversarial system. We are likely to see disputes about the necessity of extended disclosure and compliance with orders, and the court will need to take a robust approach to failures to co-operate.

What to look out for in 2019

A working group led by Mr Justice Popplewell was set up in March 2018 to review the current approach to witness evidence. At present, parties prepare and exchange witness statements, which stand as the witness’s evidence in chief. The witness is then cross-examined at trial. There have long been complaints that witness statements often do not accurately represent the evidence the witness will give, although views differ on whether the system itself is broken or whether the problem is that litigants do not comply with the current rules.

A number of radical options are under consideration by the working group, including re-introducing examination in chief, introducing American-style video-recorded depositions prior to trial and abolishing privilege over the production of witness statements so that all communications with a witness must be disclosed. While this may reduce costs, it will increase the risk of surprises at, or near to, trial and may encourage more litigants to go to trial.

The working group is currently considering the results of a survey it circulated to users of the Business and Property Courts in November 2018. We should find out more on the next stage of its consultation in early 2019.

Authored by Aimee Talbot.

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