ANALYSIS OF THE WOOLF REFORMS
The Times, May 2 2000
With Lord Woolf's reforms of the civil justice system a year old, Frances Gibb analyses the surveys
Verdict on Woolf shake-up: it's a qualified success
Lord Woolf's shake-up of civil justice was a year old last week. To judge from a rash of surveys, the overall verdict is that it is proving a success. Litigation is quicker (some say cheaper) and more likely to lead to early settlement than a courtroom battle. But fears about a lack of resources remain.
Eversheds, the corporate law firm, has conducted an "access to justice" survey for four years, so its results are telling. Of its respondents, 54 per cent said that the civil litigation process had improved in the past year, a big increase on 1998's 15 per cent. Some 52 per cent of respondents believed that litigation was quicker, but only 22 per cent thought costs were lower.
John Heaps, head of litigation at Eversheds, says: "The UK legal system historically has been plagued by unsatisfactory delays and expense. The style of dispute resolution is changing as a result of the Woolf reforms; people no longer seek aggressive uncompromising lawyers, but those who look for commercial solutions."
The survey sought the views of heads of legal departments of UK companies and public sector bodies; 70 per cent of respondents were in the private sector, with 30 per cent in London. From the replies, a change in culture is emerging. Nearly two thirds did not think the reforms would make them less likely to start proceedings but 43 per cent said they were settling cases earlier and almost half said their lawyers were handling disputes differently. Mediation, or alternative dispute resolution (ADR), is also on the rise: 41 per cent have used it, compared with 30 per cent in 1998.
But there is concern that while judges are managing cases more effectively the courts do not have adequate resources. (This was expressed by 50 per cent of respondents.) Only 24 per cent believed that litigants were now getting better justice; 44 per cent said they were not.
Views were also split on costs. Nearly half did not believe costs to have been affected. Arguably more worrying, 19 per cent said costs had risen, particularly in the regions. But a conference on Woolf held by CEDR found that although costs had increased at the start of litigation (front-loading) overall they were down as settlements came sooner.
Conditional or "no win, no fee" work is attractive in principle but little used: 48 per cent of respondents said they would pay lawyers a higher fee for winning if they could pay a lower fee, or none, if the case was lost. But only 24 per cent had discussed such a deal.
Litigation may be quicker and less likely to go to court, but 52 per
cent of respondents expected to have the same number of business
disputes next year, with as many being resolved through litigation. One
in five was more upbeat and thought fewer disputes would be resolved in
Overall the findings are positive, says Heaps. "Over half the respondents feel the speed of resolving disputes has improved. But there are concerns that the aims and aspirations are not matched by court resources."
Wragge & Co obtained similar findings. A survey carried out by City Research Group among in-house lawyers from FTSE 1000 companies says lack of resources are "a major stumbling block". Some 81 per cent of respondents thought courts did not have the resources to process claims quickly enough, and some complained of "inconsistent interpretation" between courts. But 89 per cent of respondents backed the changes and said litigation was quicker with fewer "frivolous claims". Some 41 per cent thought costs had been cut, and there was strong backing for ADR, with 80 per cent saying it had proved popular. Nine in ten thought clients were more involved in the management of the dispute, but 38 per cent believed that the reforms had compromised justice at the expense of cost-cutting. Like the CEDR survey, the change singled out for the biggest impact is that which allows either party to make a formal settlement offer at any stage - or potentially face cost penalties.
Andrew Manning Cox, senior litigation partner, says the survey mirrored the firm's experiences. Among surprise findings was the low awareness of Woolf among businesses. "They must look to their lawyers to use the rules to the best tactical advantage," he says.
Another City law firm, Lovells, found 71 per cent of respondents now treating litigation as a last resort, with 72 per cent willing voluntarily to exchange documents with the other side. Where litigation is unavoidable, it is quicker, with 66 per cent saying that judges now set tighter timetables. Two thirds found the court "rubber- stamped" joint requests by the parties to move back dates in the timetable, but this flexibility did not extend to trial dates.
The impact of the reforms, though, is patchy. One controversial aspect of Woolf was the ability of courts to appoint a joint expert. But only 7 per cent of respondents were involved in cases with such an expert.
And judges could be more active in managing cases. Only 9 per cent found that the court monitored case progress and chased lawyers to meet deadlines; 42 per cent found the court had sought to narrow the issues as early as it could. The commercial court, Lovells found, was managing cases better than other High Court divisions. And courts did not penalise parties who failed to comply with the new rules.
Asked for the worst aspect of the reforms, respondents chose the rule on summary assessment of costs in preliminary hearings, criticised as a lottery. But Russell Sleigh, head of litigation at Lovells, says the findings were generally encouraging.
A practitioner's point of view
THIS time last year solicitors were worried about the impact of Woolf. The "overriding objective" was to enable the court to deal with cases justly and in a "proportionate" way. But what would this mean? One year on, fewer cases are coming to court. Government figures suggest new claims are down 23 per cent. Our experience confirms that more cases are settling, and faster, with fewer preliminary court applications.
The judges' new enthusiasm for immediately quantifying and ordering payment of costs doubtless has something to do with it. Fears have been expressed that judges know little about costs and may make arbitrary decisions. Certainly we have seen examples of judges unfamiliar with London charges and an inconsistency on summary assessment of costs.
With earlier settlements, clients might have hoped for lower bills. That has not always happened. Most pundits predicted that cases would be "front-loaded", with a higher proportion of costs in the early stages. That has happened. More activity early on means more analysis and advice, so more costs at the outset.
Front-loading and earlier settlements are among the effects of a greater use of the pre-action protocols that govern the conduct of claims before proceedings are issued. In practice these mean the parties think twice before issuing proceedings and are prepared to exchange information. We still exercise our traditional skills of analysis, advice and negotiation but gain a more complete picture earlier on. Once proceedings are issued, cases move faster to trial, so the need for swift tactical and procedural judgment is very much alive.
Mediation is increasing and clients expect advice on whether their dispute should be mediated. Many judges have "bought into" the Woolf desire for settlement and sometimes will require an attempt to mediate before trial.
Courts differ in the management of cases. We have found masters significantly less interventionist than judges. Routine case-management conferences do not really differ from old-style directions hearings and often proceed by agreement between the parties. By contrast, the new rules restrict parties agreeing to extend court deadlines: the idea is that lawyers and parties should not dictate the pace of litigation. The principle is sound but more flexibility would save bureaucracy and costs.
The reforms have heralded a change on experts. At our recent Woolf seminar, Mr Justice Lightman said experts were already an "expensive luxury" and their evidence often irrelevant. In our view they will become less common.
Some waters remain to be tested. The procedure on disclosure is
thought open to abuse. More reforms are in the pipeline, and the Human
Rights Act has yet to take effect. Remodelling the litigation landscape
is set to continue.
The author is litigation partner at Barlow Lyde & Gilbert.