Nick Parker, a dispute resolution partner at Berry Smith Lawyers and a civil and commercial mediator, considers changes ahead in commercial dispute resolution.
The start of a new year gives an opportunity to look forwards. The landscape of commercial dispute resolution faces significant change in the year ahead, building on issues have been the subject of recent debate.
The further growth of Alternative Dispute Resolution
Last month saw the publication of a report by the Civil Justice Council (that advises on civil justice policy) considering the role that ADR, most frequently mediation, should have in the litigation process.
Most disputes referred to mediation are resolved, often resulting in the saving of potential cost and delay, avoiding risk in losing the case, and on occasion preserving trading relationships. These advantages usually come at the price of both parties needing to compromise on what would be their best case scenario if they were to go to Court and win.
While parties have often been encouraged by the Courts to mediate it is a voluntary process, and the recent report considered the extent to which ADR should be further embedded in the litigation process.
The Civil Justice Council concluded that while the Courts should not compel parties to mediate, there should be a presumption that mediation should be attempted and that the court process should be further geared towards encouraging its use, with more likelihood of penalties on parties that unreasonably refuse it.
The report further underlined the importance of increasing awareness of the process and looking as to how it can be promoted to lower value cases.
The report is likely to be used as a foundation for further rule changes and there will be continued promotion of mediation as a mainstream method of dispute resolution in the year ahead.
In the coming years it will be more likely than not that a dispute will proceed to mediation if it cannot be resolved between the parties themselves at an early stage.
A separate Welsh jurisdiction?
In November, the Counsel General for the Welsh Government, Jeremy Miles AM, said that progress towards the establishment of a distinct Welsh legal jurisdiction was inevitable. What does this mean?
Historically, our legal jurisdiction is that of England and Wales, meaning that, by and large, the same laws apply in both countries. With the increase in powers vested in the Welsh Government to legislate for Wales alone there is increased pressure on the current ‘one size fits all’ approach to the operation of English and Welsh law in the same system.
Already, distinctions are being drawn between England and Wales. While historically many commercial contracts have stated that the relevant legal jurisdiction that applies to the relationship between the parties was that of England and Wales it is now often the case that the words ‘and Wales’ are omitted, due to a perceived risk of lack of clarity on future applicable law.
Welsh businesses of course need to comply with relevant laws emanating from both Westminster and Wales, and many Welsh law firms routinely act in cases for clients based outside Wales, as well as acting in indigenous Wales cases. A vast body of existing law has been developed in ‘England and Wales’ and will continue to apply unless there is conflicting Welsh law.
How it is possible to separate or ‘distinctly integrate’ the knowledge of and application of different English and Welsh law in the same legal system is a challenging question. It is highly unlikely that a completely separate system of courts, judges and lawyers would be required, sustainable or affordable. A welcome move is the planned codification of Welsh law by subject area, to enable better awareness of and accessibility to Welsh law.
The issue of how a separate Welsh jurisdiction will operate will undoubtedly be the subject of further debate in the year ahead.
Disclosure of fewer documents in litigation?
Any business that has been involved in litigation will be aware of the disclosure process, which requires each party to produce and disclose copies of all relevant documents relating to the dispute to their opponent. These often include emails, internal documents, diary entries as well as relevant contracts.
Given the extensive number of documents that can be retrieved via electronic storage, there has been concern as to the consequent cost caused by extensive searches, in order to review potentially relevant documents.
Consequently, a two-year pilot scheme is operating in High Court cases in the main commercial court centres (including Cardiff) from this month which varies the traditional approach to disclosure of documents.
It places more onerous duties on parties and their advisers in initially preserving and reviewing their own documents, and generally restricts the number of documents that will need to be served on an opponent. Parties are now required to serve key documents with their initial claim documents, and co-operate with each other to identify what (if any) further disclosure is needed.
The usual approach will therefore result in significantly fewer documents needing to be disclosed in litigation in the future. Parties will still be required to serve any documents that are adverse to their case. If the pilot scheme is successful the change will apply more widely to to other cases in the future.
Impact of Brexit on civil justice
No preview of the year ahead could avoid the potential implications of Brexit. From a civil litigation perspective important issues arise in relation to the jurisdiction of cases and the recognition of judgments obtained in a UK Court in other European countries.
At present EU rules determine which country’s courts hear a civil or commercial law case that raises cross-border issues, which country’s laws apply and how a judgment obtained in one EU country can be recognised and enforced in another.
In the event that there is a ‘no deal’ Brexit there would be no agreed framework for ongoing cooperation between the UK and EU countries. There are wider international agreements that would continue to apply though these are generally less comprehensive than the current EU rules.
Any business that operates across borders should consider the implications on its terms of business as to specified jurisdiction and operative law.
Please contact us if you would like more information about the issues raised in this article at 029 2034 5511 or nparker@berrysmith.com
Nick Parker is a Partner and Head of Dispute Resolution at Berry Smith LLP, and is a highly experienced independent civil and commercial mediator, acting across the UK.
