In November 2021, The Civil Justice Council’s published its interim report on proposed changes to the current Pre-Action Protocols, which included a mandatory Alternative Dispute Resolution (ADR) gateway. In this article, we look at proposed reforms and consider what this could mean for your case.
On 15 November 2021, the CJC published its interim report on proposed changes to the current PAPs, which are aimed at making the process more accessible and efficient. The PAPs set out steps that parties to a dispute should take to set out their position and narrow points of dispute before starting Court proceedings for civil claims. The CJC has described the proposed reforms as “evolutionary rather than revolutionary” — but they do mark a significant shift from current practice, which has sparked concern amongst commercial litigators. The proposed reforms have not yet been integrated into the Civil Procedure Rules (CPR) (a procedural code which deals with how Courts treat cases justly).
A key objective of the proposed reforms to the PAPs is to increase pre-action exchanges between the parties to encourage early resolution and encourage the parties to narrow the issues in dispute.
Some of the key proposed reforms include:
For complex commercial litigation the reforms are likely to mean additional levels of case preparation at an earlier stage, which could make the pre-action stages of litigation more expensive than is the case currently by front-loading this element of the work. If parties are required to sign statements of truth it is likely to put an additional duty on solicitors to scrutinise the evidence in the case before issuing letters of claim/replies. In the absence of agreement, legal costs are not recoverable if a case is settled or abandoned before proceedings are commenced. An increase in pre-action legal costs as a result of the proposed changes to the PAPs (if adopted) could mean that parties are less willing to settle having invested more heavily in the pre-action phase and become more entrenched in their positions. This would undermine a key objective of the reforms: to improve economy and proportionality in litigation.
On the other hand, we expect commercial clients may welcome the CJC’s efforts to encourage compliance with the PAPs via an online portal and narrowing the issues in dispute. We hope that reforms in these areas might encourage parties to evaluate more critically the merits of their cases and avoid advancing weak arguments or claims, which in turn would reduce their legal costs.
If you have any queries about how the proposed reforms could affect your case if they are implemented, please get in touch with our Commercial Dispute Resolution team who would be happy to advise you.
Associate
Miriam.Onwochei-Garcia@brownejacobson.com
+44 (0)330 045 2975
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