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EXECUTIVE SUMMARY

The aim of this paper is to present early findings on the effects of the Civil Procedure Rules which were introduced in April 1999, following Lord Woolf's report on Access to Justice.

Key Findings:

• Overall there has been a drop in the number of claims issued, in particular in the types of claim where the new Civil Procedure Rules have been introduced.

• Anecdotal evidence suggests pre-action protocols are working well to promote settlement before issue and to reduce the number of ill founded claims.

• There is evidence to show that settlements at the door of the court are now fewer and that settlements before the hearing day have increased.

• Part 36 has been welcomed by all interested groups as a means of resolving claims more quickly. Although offers to settle can be made at any time during proceedings, there is a widespread belief that they are used in the early stages of a claim so that a trial may be avoided.

• There has been a rise in the number of cases in which Alternative Dispute Resolution is used suggesting that, since the introduction of the Civil Procedure Rules, parties are more likely to try alternative means of settling claims.

• The use of single joint experts appears to have worked well. It is likely that their use has contributed to a less adversarial culture, earlier settlement and may have cut costs.

• Case Management Conferences are a key factor in making litigation less complex, and appear to have been a success.

• The time between issue and hearing for those cases that go to trial has fallen. The time between issue and hearing for small claims has risen since the introduction of the Civil Procedure Rules.

• The number of appeals in the course of proceedings appears to have fallen sharply.

• It is too early to provide a definitive view on costs. The picture is still unclear with statistics difficult to obtain and conflicting anecdotal evidence.

• The views of litigants in person are difficult to obtain as they tend to use the system only once. Whilst research is currently being undertaken to assess their views, anecdotally it appears that courts are providing the assistance required.

• Sources external to the Lord Chancellor's Department show that, with one or two exceptions, the civil justice reforms have been well received overall.

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INTRODUCTION

1.1        This paper presents the emerging findings from the first phase of the Civil Justice Reforms which were introduced in April 1999. Lord Woolf's final report on Access to Justice set out a blueprint for the future of the civil justice system which differed substantially from the previous system both in structure and ethos.

Map 1 - chart of the old system

Map 2 - describes the new processes

Background to Access to Justice

1.2        In 1994, Lord Woolf was asked to review the rules and procedures of the civil courts in England and Wales.

The aims of the review were:

• to improve access to justice and reduce the cost of litigation;
• to reduce the complexity of the rules and modernise terminology; and
• to remove unnecessary distinctions of practice and procedure.

1.3        There have been many reviews of the civil justice system with a similar theme. The aim of the Civil Justice Review, which reported in 1988, was 'to improve the machinery of civil justice…in particular to reduce cost, delay and complexity'. Of the 91 recommendations that were put forward many were implemented, although some of those on court control of litigation were not.

1.4        The recognition of continuing flaws in the civil justice system led to the formation a joint independent working party set up by the General Council of the Bar and the Law Society in 1993. The 'key aspects of reform' identified by the report demonstrated a consensus among barristers and solicitor members that the way in which litigation was conducted was in urgent need of reform and that a change of culture was required.

1.5        A practice direction was issued on 24 January 1995 in which the Lord Chief Justice and the Vice-Chancellor set out new requirements in the preparation and control of cases. The Lord Chief Justice commented:

1.6        As Lord Woolf stated in his Interim Report:

Access to Justice Findings

1.7        Lord Woolf identified the problems within the old system as principally:

• litigation was too expensive, in that costs often exceeded the value of the claim;
• litigation was too slow in bringing a case to a conclusion;
• there was a lack of equality between litigants who are wealthy and those who are not;
• litigation was too uncertain in terms of time and cost;
• the system was incomprehensible to many litigants;
• the system was too fragmented since there was no clear overall responsibility for the administration of civil justice;
• litigation was too adversarial as cases were run by the parties and not by the courts with the rules all too often ignored by the parties and not enforced by the courts. (Endnote 1)

1.8        To confront these issues, Lord Woolf took a wide-ranging view and looked at the structure of the civil justice system and the use of technology, as well as procedures both within and outside the courts. Progress would require a "radical change of culture for all concerned". (Endnote 2)

1.9        In addition, the second stage of the inquiry concentrated on particular areas of litigation where Lord Woolf considered that the civil justice system was not meeting the needs of litigants. These were medical negligence, housing, multi-party litigation, judicial review and the specialist jurisdictions.

Principles of the Civil Justice System

1.10        Lord Woolf identified the principles which should underpin the civil justice system in his Interim Report. His subsequent findings were based around these principles. (Endnote 3)

• The system should be just in the results it delivers.
• It should be fair and be seen to be so by:
• ensuring that litigants have an equal opportunity, regardless of their resources, to assert or defend their legal rights;
• providing every litigant with an adequate opportunity to state his own case and answer his opponent's;
• treating like cases alike.
• Procedures and cost should be proportionate to the nature of the issues involved.
• It should deal with cases with reasonable speed.
• It should be understandable to those who use it.
• It should be responsive to the needs of those who use it.
• It should provide as much certainty as the nature of particular cases allows.
• It should be effective: adequately resourced and organised.

Access to Justice Recommendations

1.11        In his interim report, Lord Woolf stated:

1.12        In order to address these problems, the Access to Justice Report recommended radical procedural change putting greater emphasis on settlement and giving control of litigation to the courts.

Key new features of the system were to be:

• Pre-Action Protocols - to provide a clear framework for both parties to follow, to resolve or at least clarify a dispute before the issue of a claim.

• Part 36 offers - to enable claimants to make offers to settle, as well as defendants.

• Single joint experts - to reduce costs and promote co-operation between the parties.

• Case Management - to ensure cases are dealt with justly. Defended cases would be allocated to one of three tracks:

  Small Claims Track - for personal injury cases up to £1,000 and all other cases up to £3,000. In the light of research by Professor John Baldwin, it was decided to raise the upper limit to £5,000. Personal Injury and housing disrepair cases of less than £1,000 were excluded.

  Fast Track - originally intended for cases above the small claims limit and not exceeding £10,000. The upper limit was changed to £15,000 before implementation. Cases would be run according to fixed timetables leading to trial in 20-30 weeks to trial. The trial would be expected to last one day or less with limits on oral and expert evidence.

  Multi Track - for cases over £10,000 (changed to £15,000 before implementation) and those cases which were too complex for the fast track. Case management by judicial teams would be a feature of the track and there would be either standard or tailor made directions as appropriate.

• Costs - to increase certainty and proportionality, there would be fixed costs for cases on the fast track and the development of benchmark costs for multi-track cases. Costs orders were to better reflect the conduct of the successful party and the outcome of individual issues. Fixed costs were introduced for fast track trials

• Rules - to reduce complexity there would be a single set of rules for the High Court and county courts.

• ADR - the use of Alternative Dispute Resolution would be encouraged.

1.13        The process of reform is continuing. Annex A shows the coming into force dates of the different parts of the Civil Procedure Rules, Practice Directions and Pre-Action Protocols and those that will be implemented in the future.

EMERGING FINDINGS

Emerging Findings from the Civil Justice Reforms

2.1        Since the Access to Justice Interim and Final Reports were published, there has been much speculation about whether the reforms would succeed. On 26 April 1999 there were, of course, many cases already in the system. The transitional arrangements provided that all defended cases still unresolved had to come before the court within a year. Because in many of these cases Directions had been given under the old rules, with experts appointed for each side and the provision for oral evidence, a larger proportion was allocated to the Multi-Track than would have been indicated by the amount of claim. Following a consultation exercise conducted in September 1999, there was consensus that evaluation of the reforms should not commence until 12-18 months following implementation (the vast majority opting for 18 months). This was to allow for "bedding in" factors such as stabilisation of workload and the conclusion of cases issued before the new rules came into force. It must be remembered that the reforms are not yet complete, however, there are some indications of how the changes have affected the system.

2.2        Lord Woolf described the new landscape of civil litigation as having the following features, which we can use as the criteria for measuring the success of the procedural reforms:

• Litigation will be avoided wherever possible.
• Litigation will be less adversarial and more co-operative.
• Litigation will be less complex.
• The timescale of litigation will be shorter and more certain.
• The cost of litigation will be more affordable, more predictable, and more proportionate to the value and complexity of individual cases.
• Parties of limited financial means will be able to conduct litigation on a more equal footing.

2.3        Some aspects of these features are easier to measure than others. In particular the costs of litigation are extremely difficult to measure as the remit of the court is limited and some matters are confidential between a client and their solicitor. Though even where the information we have indicates significant change, we need to be cautious about ascribing causation. We have set out below the information available relating to each of the above features, what can be deduced from it, and the plans we have for research which will shed further light on some of these issues.

LITIGATION WILL BE AVOIDED WHENEVER POSSIBLE

(This section looks at the fall in claims and pre-action protocols.)

3.1        Overall there has been a drop in the number of claims issued, in particular in the types of claim where the new Civil Procedure Rules have been introduced.

Fall in Claims

3.2        To test whether litigation is being avoided we have looked at the numbers of claims issued. Data from the Court Service in Figure 1 shows a fall in the number of cases issued in the county courts.

3.3        Figure 1 shows that there was a peak early in 1999 and then a large drop in claims issued immediately after the introduction of the Civil Procedure Rules. Although numbers of claims have since risen, the overall trend remains at a lower level than before.

3.4        An amendment to the High Court and County Courts Jurisdiction Order 1991 which came into force on April 26 1999 provided that proceedings may not be started in the High Court unless the value of the claim is more than £15,000. The intention was to ensure that cases are dealt with by the appropriate judicial bench. So a fall in the number of claims issued in the High Court was expected.

3.5        Figure 2 shows a similar peak before the introduction of the Civil Procedure Rules and a significant fall after that date.

3.6        Figure 3 combines the data from the previous two and shows that the overall number of claims fell to a new level after April 1999. It is likely that this initial fall in claims issued was partly due to unfamiliarity with the new rules. However, although the number of claims subsequently rose, it did not reach the height of those issued before the introduction of the Civil Procedure Rules. Instead claims appear to have settled at a new lower level.

3.7        To test whether this fall can be, at least in part ascribed to the civil justice reforms, we have compared different types of claim.

3.8        Figure 4 shows the pattern of issue in the county courts for claims in contract and tort such as debt, personal injury and other forms of negligence for which the Civil Procedure Rules have introduced new procedures.

3.9        Figure 5 shows the pattern of issue of claims in other types of case and shows no overall decline. Procedural rules in these areas have not yet been fully incorporated into the CPR, thus providing some evidence that the reforms have had an effect in reducing the number of claims issued.

3.10        Anecdotal evidence also supports the view that litigation is now avoided where possible. For example, Stuart Farr, a member of Martineau Johnson's commercial litigation department said: "Lawyers are now being involved by clients earlier in an effort to avoid litigation". (Endnote 5) In a survey conducted for Lovells, a city law firm, 71% of respondents said they were now treating litigation as a last resort. (Endnote 6)

3.11        It appears that there are now fewer frivolous cases judging by the anecdotal evidence. John Taylor, a senior clerk at Old Square Chambers, Bristol notes: "We've noticed that the quality of PI [Personal Injury claims] has improved since Woolf as we're now beginning to be used by more defendants". (Endnote 7) Of course, the reforms to the system for the public funding of dispute resolution were also aimed at discouraging ill-founded claims and encouraging the use of alternatives to the courts where appropriate, so may have contributed to the fall in claims. However, it is too early to know the precise effect.

Pre-Action Protocols

3.12        Anecdotal evidence suggests that pre-action protocols are working well to promote settlement before issue and to reduce the number of ill founded claims.

3.13        Pre-action protocols in the areas of clinical negligence and personal injury cases came into force on 26 April 1999. There have since been others. (Endnote 8) The Practice Direction on protocols requires parties to comply with the general spirit of the protocols whatever the subject of the claim.

3.14        Before a claim is issued, claimants must write to defendants informing them that they intend to pursue a claim. They are then expected to begin following the pre-action protocol. Claims should not be issued until a minimum of three months after a letter of claim has been sent.

3.15        Early indications show that the introduction of Pre-Action protocols has been key in encouraging a new settlement culture. A survey of their members by the Association of Personal Injury Lawyers of their members showed that 48% of respondents felt that earlier settlement had been reached and 33% of cases avoided litigation.

3.16        To assess pre-action behaviour and the effect of the protocols, the Law Society and Civil Justice Council have jointly commissioned research by the Institute of Advanced Legal Studies and the University of Westminster. The project will look in detail at the impact of the civil justice reforms on pre-action behaviour, particularly focussing on the effect that pre-action protocols have had on personal injury and clinical negligence disputes, and will include the tracking of cases up to trial to test the point at which they settle. This will provide a definitive test of what is happening and will include both quantitative and qualitative data. The research is currently underway with a final report due at the end of 2001.

LITIGATION WILL BE LESS ADVERSARIAL AND MORE CO-OPERATIVE

(This section looks at settlement, Part 36, Alternative Dispute Resolution and Single Joint Experts.)

Settlement

4.1        There is evidence to show that settlements at the door of the court are now fewer and that settlements before the hearing day have increased.

4.2        The Court Service collects data on the disposal of cases that are listed for trial through a manual return. We have compared data for fast track cases with cases allocated to a District judge pre-CPR and data for multi-track cases with cases allocated to a Circuit judge pre-CPR. The data show a large and unexplained increase in cases transferred to another court, particularly for 'multi-track' cases. We have excluded these cases from the analysis below and are investigating the reasons for the increase. Meanwhile, the data should be treated with some caution.

4.3        For 'fast track' cases, shown in Figure 6 the proportion of settlements or withdrawals before the hearing day has risen from 50% (July 1998-June 1999) to 70% (November 1999-December 2000). In addition, the proportion that was heard fell from 33% to 23%.

4.4        For 'multi-track' trials, in Figure 7 the change is less marked, with the settlement rate before the hearing day at 63% in July 1998-July 1999 and 72% in November 1999-December 2000. The percentage of cases heard appears almost unchanged; from 22% down to 20%. It is also encouraging to see a drop in the number of cases settling on the day of the trial in both charts.

4.5        Once again, this view is endorsed in the anecdotal evidence. Andrew Horrocks, writing in The Times noted, "Our experience confirms that more cases are settling and faster, with fewer preliminary court applications" (Endnote 9).

Part 36

4.6        Part 36 has been welcomed by all interested groups as a means of resolving claims more quickly. Although offers to settle can be made at any time during proceedings, there is a widespread belief that they are used in the early stages of a claim so that a trial may be avoided.

4.7        Part 36 offers were proposed by Lord Woolf in the Access to Justice Interim Report and were introduced on 26 April 1999. Part 36 enables the claimant as well as the defendant to make an offer to settle. This offer to settle can be made before the claim is issued or during proceedings. If the claim proceeds to trial, then any offer made by either party will be taken into account when it comes to awarding costs.

4.8        Unfortunately it is extremely difficult to obtain figures on disputes where no claim is issued so it is difficult to know exactly how often Part 36 has been used in cases which have not proceeded. However, in the CEDR Civil Justice Audit 74% of external lawyers (those not practising in a firm which dealt with its own litigation) felt that Part 36 made settling cases easier. (Endnote 10) Freshfields also note that "Whilst Part 36 has only been in operation for 12 months and there have as yet been relatively few reported decisions on the application of the new rule, the preliminary indications are that Part 36 offers are being made in practice on a regular basis (particularly by claimants)." (Endnote 11) Furthermore, Freshfields acknowledge that: "Evidence suggests that pre-action offers are being widely used by both potential claimants and potential defendants" (Endnote 12). This suggests that there is more conciliatory behaviour on the part of solicitors.

4.9        There has also been praise from individual practitioners. David Marshall, treasurer of APIL and a partner at Anthony Gold Lerman and Muirhead commented: "[Part 36 offers] are a success story" (Endnote 13) although in the same article Robin Knowles QC stressed the need for care saying: "…there is a difference between creating a climate where a disciplined and sensible approach by parties towards settlement is encouraged, and creating a climate which creates undue pressure to settle regardless of merits." (Endnote 14)

Alternative Dispute Resolution

4.10        There has been a rise in the number of cases in which Alternative Dispute Resolution is used, suggesting that since the introduction of the Civil Procedure Rules, parties are more likely to try alternative means of settling claims.

4.11        Alternative Dispute resolution can be undertaken at any time once a dispute has arisen and the pre-action protocols encourage the use of ADR before a claim is issued. The introduction of the Civil Procedure Rules has raised the profile of ADR. Once a claim is issued, ADR is most likely to be encouraged by the courts at the allocation stage, case management conferences and pre-trial reviews. The court may of its own initiative stay the timetable to allow parties to try to settle the case by ADR or by other means. Although there appears to be a growing interest in ADR, there is a clear view that it should not be made compulsory.

4.12        Since the introduction of the Civil Procedure Rules, CEDR has recorded a 141% increase in the number of commercial mediations.

4.13        Over 130 ADR orders were made in the Commercial Court between 26 April 1999 and June 2000 compared to 43 in the preceding 12 months. A review of the ADR scheme in the Commercial Court is being undertaken by Professor Hazel Genn which will report on the outcomes of these orders. It is due to be published in the Spring, together with Professor Genn's review of the Court of Appeal ADR Scheme.

4.14        Gary Webber, a barrister at 33 Bedford Row described his experiences of mediation in the Solicitors' Journal noting that: "ADR has been around a long time and recent surveys have shown that it is increasingly being used. However, it is still seen as trendy and people are not convinced that it works. It does. Try it." (Endnote 15) Freshfields comments that: "…the take up for ADR remains relatively low in comparison with the number cases proceeding through the courts". (Endnote 16)

4.15        The number of people using mediation is rising and those who use it are generally encouraged by the results. It is likely that the numbers will rise as the users of the civil justice system become more familiar with and gain confidence in ADR techniques.

Single Joint Experts

4.16        The use of single joint experts appears to have worked well. It is likely that their use has contributed to a less adversarial culture, earlier settlement and may have cut costs.

4.17        Lord Woolf argued in his Access to Justice reports that the use of experts was a major problem in the civil justice system. They contributed to the cost of litigation, increased the complexity and delayed the proceedings, all of which were against the spirit of his recommendations. He proposed that there be a single joint expert where possible and that the duty of the expert to the court should be emphasised. "As a general principle, single experts should be used wherever the case (or the issue) is concerned with a substantially established area of knowledge and where it is not necessary for the court directly to sample a range of opinions". Access to Justice Final Report, Recommendation 167

4.18        The Court Service collects information on cases that are heard through the 'Trial Sampler', which all county courts complete in March and September each year. Unfortunately the information from this source is only reliable between 1994 and 1997, and September 2000. To avoid any seasonal bias we have compared the September post Civil Justice Reform data with the same month in previous years.

4.19        Data from the Trial Sampler tell us that while a higher proportion of trials involved expert witnesses after the introduction of the Civil Procedure Rules, a slightly lower proportion involved expert witnesses instructed by one party; in 2000 36% of trials involved expert witnesses, but only 22% involved expert witnesses instructed by one party, compared with 25% of trials where expert witnesses appeared in 1997 (all expert witnesses being assumed to have been instructed by one party pre CPR).

4.20        Post CPR, joint expert witnesses were used in 41% of cases involving any expert witnesses, with only one case involving additional expert witnesses. Unsurprisingly, there were also fewer cases where there was at least one expert witness instructed by each side; 11% in 2000 compared with 15% in 1997.

4.21        Anecdotal evidence appears to confirm this trend, which has also been endorsed by the experts themselves. Judge William Rose, writing in the JSB Journal noted that: "the shifting of the expert's duty from his client to the court cannot but save time and costs. "He further commented: "My discussions with experts lead me to believe that…the reforms are broadly welcomed". (Endnote 17)

4.22        In a recent speech, District Judge Wyn Rees outlined the changes and the differences with the earlier system. "The acceptance of single joint experts, of written questions being put to experts and, where there are separate experts, imposing the requirement that experts discuss the issues arising from their reports and prepare schedules of the issues which they agree and those upon which they disagree with reasons for any disagreement, and the court's permission being required to enable a party to use the written or oral evidence of an expert is leading to a great deal of expert evidence being agreed and that, in turn is also contributing to earlier settlement or resolution of claims. The change of culture that has taken place in relation to expert evidence may be appreciated when one recalls that at a meeting of expert witnesses…about two years before the Civil Justice Reforms were introduced, one expert recounted his experience of attending court to give evidence and not being shown the report of the expert instructed by the other party until the day of the trial. The Civil Justice Reforms have put an end to those experiences." (Endnote 18)

4.23        However, there is a note of caution from Freshfields, whose clientele may not be typical, as to whether the changes made to expert witnesses will indeed bring down costs. "Lord Woolf's recommendation that single joint experts be used where possible was intended, at least in part, to save costs. In practice this may not happen as parties are likely to appoint their own experts to shadow the single joint expert". (Endnote 19)

4.24        In an article on 'The Impact of the Woolf Reforms' by M R Macnicol for the British Orthopaedic Association Newsletter, based on a questionnaire of their members, the author notes: "Several fellows have written in to confirm that the new Civil Procedure Rules are proving effective and the number of reports undertaken seems unaffected, half of the respondents reporting no change, one quarter an increase and one quarter a decrease. Despite a longer preparation time per report the provision of expert opinion continues much as before".

4.25        Participants in the CEDR focus group in their survey commented: "The employment of a single expert often leads to a prompt settlement." (Endnote 20)

4.26        Generally, the change to a single joint expert appears to have worked well. Although there may be some doubt about the cost if parties do appoint their own experts the single joint expert seems to lead to settlement and a less adversarial approach.

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LITIGATION WILL BE LESS COMPLEX

(This section looks at the Civil Procedure Rules and case management.)

Civil Procedure Rules

3.1        A single set of rules applying to the High Court and county courts is being introduced in phases. The number of ways of commencing a claim has been substantially reduced.

5.2        Under this general heading, Lord Woolf envisaged a system with a single set of rules for the High Court and county courts and all proceedings commenced in the same way by a claim with special rules for specific types of litigation kept to a minimum.

5.3        The Civil Procedure Rules are developing to meet these criteria; they apply to the High Court and county courts, and the number of ways of commencing a case has been greatly reduced. The plethora of initial documents: Default Summons, Fixed Date Summons, Writ, Originating Application and Originating Summons are being done away with. In October 2001, when the new Civil Procedure Rules on Housing come into force, the many different ways of commencing a claim for possession will be replaced by a single form of claim.

Case management

5.4        Case Management Conferences are a key factor in making litigation less complex, and appear to have been a success.

5.5        Lord Woolf also saw litigation being simplified by the introduction of case management by the court, with the court being able to strike out issues or whole claims where there is no real prospect of success and controlling discovery.

5.6        The Department has commissioned research by Nottingham Law School into the effectiveness of case management. Professors John Peysner and Mary Seneviratne are investigating whether case management has been effective against the criteria of the Access to Justice report. The report will provide both quantitative and qualitative data which will allow an in depth view of what is happening in the civil justice system and a final report is expected in January 2003. The research by Nottingham Law School will provide information on the effectiveness of case management.

5.7        In the meantime there is some evidence to show that the courts are taking responsibility for case management and utilising the provisions for case management conferences. As Lord Woolf himself noted: "The conference is a significant opportunity to take important decisions about a case, including the possibility of settlement or referring the dispute to ADR, and to consider the costs so far and the estimate of the future costs. The client must be enabled to know what has happened and be involved in the decisions about the future of the action." (Endnote 21)

5.8        Under the old rules, the Trial Sampler asked for the number of interlocutory applications in the case and the number of interlocutory applications relating to directions for trial or case progression. Under the new rules, the sampler form asks for the number of applications and the number of case management hearings. The data show a higher proportion of cases with case management hearings than with applications for directions or case progression, 60% in 2000 compared with 43% in 1997.

5.9        The number of cases with applications has also risen since the introduction of the Civil Procedure Rules. However, those cases in which applications are made now have a smaller number of applications compared to cases issued before the introduction of the Civil Procedure Rules. This is likely to have a downward impact on costs and ensure that cases are resolved in a shorter time.

5.10        As Philip Kabraji, head of forensic services at accountants Grant Thornton has commented: "Litigation is being speeded up. Because of case management conferences there is a lot of direction, a lot more than there used to be, and pleadings and expert reports and witness statements are more or less consecutive. There are no delays now whereas before there used to be a lapse of several months between pleadings and witness statements being issued." (Endnote 22) However, there is criticism from the Lovells survey (Endnote 23) that courts may not monitor the progress of cases and chase up deadlines.

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THE TIMESCALE OF LITIGATION WILL BE SHORTER AND MORE CERTAIN

(This section looks at the time between issue and hearing and appeals.)

3.1        The time between issue and hearing for those cases that go to trial has fallen. The time between issue and hearing for small claims has risen the introduction of the Civil Procedure Rules.

6.2        Lord Woolf envisaged a system where cases would be conducted in a quicker time frame and the Fast Track was introduced with a 30 week time period from issue to trial. Lord Woolf also wanted litigants to know what events would take place during this time period and when they would occur. A key to reducing the timescale of litigation is case management in Fast and Multi-Tracks.

6.3        The Court Service collects information on small claims hearings through the Small Claims Sampler. This is collected from 29 courts three times a year in February, July and October. Figure 8 shows that the average time between issue and hearing rose following the introduction of the Civil Procedure Rules. The last section of the graph underestimates the time between issue and hearing since the longest cases had not yet concluded by the time the last survey was carried out.

6.4        Data from the Trial Sampler data shows that the average time from issue to trial was lower after the introduction of the new rules; 522 days in 2000 compared to over 600 days between 1994 and 1997 as shown in the table below. While it is not certain that this drop should be attributed to the Civil Procedure Rules, it is very likely. Furthermore, 44% of cases took less than 1 year to go from issue to trial in 2000 compared with an average of 30% across the whole period.

6.5        6.5 The greatest decrease in average time from issue to trial between 1997 and 2000 occurred amongst claims of £5000 or more, as shown in Figure 10 below. The average time of unspecified claims fell from 674 (which was close to the average between 1994-97) to 537 days, while that of claims £5000 or more fell from 744 to 450 days and there was a significant decrease in claims where the value was unspecified at issue.

6.6        Anecdotal evidence on the setting of trial dates confirms these statistics. Lovells, in their survey found that litigation is now quicker with 66% of respondents saying that judges now set tighter timetables. Furthermore, "two-thirds "rubber-stamped" joint requests by the parties to move back dates in the time table, but this flexibility did not extend to trial dates". (Endnote 24)

6.7        His Honour Judge Holman, in his article for the JSB Journal writes: "There is the occasional case where the solicitors carry on at their own pace ignoring the timetable set by the court but this is rare and generally the approach of the profession has been excellent." (Endnote 25)

Appeals

6.8        The number of appeals in the course of proceedings appears to have fallen sharply.

6.9        Lord Woolf wanted a system where appeals from case management decisions would be kept to a minimum and would be dealt with expeditiously. We do not have information on the time taken for dealing with appeals. However, since April 1999, the Civil Appeals Office at the Royal Courts of Justice has received 55 applications for permission to appeal on a matter of interpretation of the Civil Procedure Rules, of which 43 were given permission. 19 of these have been dismissed.

6.10        These figures compare well with previous years. The Civil Appeals Office set down 520 interlocutory appeals in 1998, and 609 in 1997. Although it must be borne in mind that Part 52 of the Civil Procedure Rules, which came into force in May 2000, changed the destination of some appeals and so a fall in the number received at the Civil Appeals Office is to be expected.

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THE COST OF LITIGATION WILL BE MORE AFFORDABLE, MORE PREDICTABLE, AND MORE PROPORTIONATE TO THE VALUE AND COMPLEXITY OF INDIVIDUAL CASES

7.1        It is too early to provide a definitive view on costs. The picture is still unclear with statistics difficult to obtain and conflicting anecdotal evidence.

7.2        A key criterion of the Access to Justice report was that litigation should be less expensive and the costs more proportionate to the value and complexity of claims. There is a mixed response to the question of the effect of the reforms on the cost of litigation.

7.3        It is clear that the introduction of pre-action protocols has resulted in the front-loading of costs before proceedings are issued. However, with fewer cases being issued, overall costs may have decreased. Practitioners believe that there are benefits for their clients who can now make better assessments on whether they wish to pursue their claims or how they would like to deal with them. Summary Assessments of costs have also provoked controversy but it is likely that this will decrease over time as judges and practitioners become more familiar with the new rules. Finally, the benchmarking of costs has proved problematic as obtaining information has taken time but this is likely to be addressed shortly.

7.4        The situation on the cost of litigation is difficult to prove. The landscape of litigation after the introduction of the Civil Procedure Rules has not been stable enough to provide a definitive view. There is a danger that evaluating the effects of the reforms on costs too early will mean the result will be skewed as the longest running cases that were issued before the April 1999 will not have been completed. Furthermore, there is a wide range of practitioners and businesses which participate in civil litigation and gaining access to files is a difficult issue, particularly with regard to confidentiality.

7.5        The Department has convened a Costs Working Group, including representatives from the judiciary, the Bar, and the Law Society, to look at finding data sources. Although the courts hold information about the value of claims and their fees, there is no information readily accessible on the charges by solicitors on court systems. Through insurers it should be possible not only to gain information on costs from their files, but also to identify law firms which may have useful data. Discussions have commenced with the Association of British Insurers and Lloyds of London to provide data, as insurers deal with large numbers of cases. The Legal Services Commission are also providing data regarding the costs of claims conducted through the Legal Aid system. This will enable the Department to assess whether the cost of litigation has fallen in specific areas and whether costs are more proportionate to the claim.

7.6        Further information on the costs of litigation will be obtained from the research into Pre-Action Behaviour commissioned by the Law Society and the Civil Justice Council. This will look at the costs of claims up to the point of trial although no cases actually proceeding to trial will be included. Nottingham Law School will look at costs on the Fast Track and Multi-track as part of the research they are conducting on Case Management.

7.7        There are a number of views on the subject of costs. The principal criticism is that costs may have increased due to front-loading. However, this is balanced somewhat by the requirement to explain the likely costs before a case proceeds to trial.

• "There is less litigation than there used to be. The disadvantage [of Woolf] is that the costs are up front. People who want to bring a claim know there is a huge expenditure that has to be made up front, whereas previously they could stagger the costs. That puts people off bringing cases because they have to put their money where their mouth is." (Endnote 26)

• "More activity early on means more analysis and advice, so more costs at the outset".(Endnote 27)

• Ted Greeno, a partner at law firm Herbert Smith, claims companies face 'more expensive litigation with less certain outcomes'. (Endnote 28)

• "The costs of preparing the documentation needed for the case management conference in particular can be high, and the time spent on case budgets and costs has not always delivered tangible benefits for the client (although it is likely to prove beneficial in the longer term)." (Endnote 29)

• "I readily accept however, that costs may often be incurred at an earlier stage rather than later stage, but it is the greater understanding that those early costs achieve (rather than the costs themselves) that can promote settlement." (Endnote 30)

7.8        The Centre for Dispute Resolution Civil Justice Audit contains the results of a poll of lawyers. 38% of external lawyers (working for firms providing legal services) said that front-loading has had an effect on their willingness to issue proceedings and the focus group comments were generally positive. Responses to the question on costs and responses from the Wragge and Co survey are shown in Figure 11 below. (Endnote 31)

7.9        There has also been much discussion around summary assessments of costs. Writing in Legal Action, Suzanne Burn believes the summary assessment to be a 'lottery'. (Endnote 32) Commentators are unsure as to whether the costs are fair and how difficult it is for judges to make an informed assessment.

• "Reaction to the implementation of the summary assessment provisions has been mixed, but they do appear to be discouraging peripheral applications and thereby contributing to more proportionate costs overall." (Endnote 33)

• "Summary assessments of costs has been hard for the circuit bench, although less so for district judges who, after all, have been used in the past to taxation" (Endnote 34)

• "Summary assessment of costs is not a success. It is time-consuming for the Practitioner and the Judges, inefficient and unpredictable."( Endnote 35)

7.10        Lord Woolf recommended that costs in the Fast Track should be fixed. To assist in developing a possible costs regime, the Department commissioned research by the Institute of Advanced Legal Studies (IALS). IALS used hypothetical case studies to determine the amount of work required by a solicitor conducting a case through the fast track. The research covered road traffic accident and employers' liability personal injury cases and contract cases. The research concluded that although it was possible to devise a cost matrix for claimants and defendants in personal injury cases, it was not possible to devise a matrix in contract cases. It was also clear that the implementation of a wholly new procedure from 26 April 1999 would present difficulties in predicting accurately the work necessary to take cases through the fast track. In addition, the extension of conditional fees and the increasing use of alternative methods of funding such as the use of insurance cover had the potential to alter dramatically the way in which lawyers charge for and fund cases.

7.11        In the absence of any fast track fixed costs (other than trial costs) consideration turned to the establishment of benchmark costs. A scoping study into the development of benchmark costs (Endnote 36) found that existing court systems held little useful data about costs and that the validity of any benchmark derived from existing data would be questionable.

7.12        Further work on the establishment of benchmark costs is now being taken forward by the judges themselves. Senior Costs Judge Hurst is currently assessing information he has collected regarding the benchmarking of costs and his report is expected later this year.

7.13        Changes have also taken place in what can be recovered from the paying party as an item of costs. Although Conditional Fee Agreements have been available to a greater or lesser degree since 1995, the success fee element was not recoverable from the unsuccessful opponent. While a client could seek an assessment of their own solicitor's bill, including the success fee element, it is not believed that an assessment of the success fee ever took place. From 1 April 2000, it has been possible to recover the success fee from the paying party subject to rules of court. It is also possible to recover the insurance premium taken out in the case, whether in support of a conditional fee or not. Where a case is likely to attract an additional liability, such as a success fee or insurance premium the court and opponent must be informed of the existence of the additional liability, but not its quantum. If there is no additional liability there is no requirement to inform.

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PARTIES OF LIMITED FINANCIAL MEANS WILL BE ABLE TO CONDUCT LITIGATION ON A MORE EQUAL FOOTING

8.1        The views of litigants in person are difficult to obtain as they tend to use the system only once. Whilst research is currently being undertaken to assess their views, anecdotally it appears that courts are providing the assistance require.

8.2        Lord Woolf was concerned that people should not be denied the opportunity to use the courts if they did not have large sums of money. The Access to Justice report recommended that there should be more help from advice services and the courts. (Endnote 37).

8.3        In order to find out how an individual experiences the civil justice system, Professor Hazel Genn looked at how people dealt with justiciable acts, (problems that could be dealt with legally) in her research "Paths to Justice", conducted in during Autumn 1997 and Spring 1998. She found that only about 20% of non-trivial justiciable problems experienced by private individuals lead to any kind of legal proceedings. Furthermore, although the public regarded the courts as important and there was some lack of confidence in the fairness of hearings. The research provides useful information on the views of those who used the system before the introduction of the Civil Procedure Rules.

8.4        The Legal Services Commission is rerunning some elements of Paths to Justice in a further survey. This will determine, in the context of a baseline and follow up survey of legal need, whether the experiences of people with legal problems have changed and in what way, and the extent to which the Community Legal Service reduces unmet legal need. The Court Users survey will also be launched with two separate questionnaires, one for litigants in person and the other for lawyers, which will obtain information on how the civil justice system has changed. Both these surveys are currently in their early stages and results are not yet available.

8.5        Anecdotally there is some criticism that the system is more favourable to litigants in person than to those who have engaged professionals. However, as one article notes: "The legal professionals might complain if too much help is given to litigants in person but if the aims are to ensure access to justice and equality, then something has to give". (Endnote 38).

8.6        However, as Lord Woolf himself noted in the Access to Justice Interim Report: "I believe it is essential to the success of my proposals that the courts themselves should in future take a more pro-active role in relation to unrepresented litigants, both in giving information about sources of professional advice and other outside help, and in themselves providing direct assistance." (Endnote 39).

8.7        There is great difficulty in finding the views of litigants in person. They tend to only use the system once and in order to find those who have used the system a very large sample size must be used. Furthermore, they are unlikely to have used the system both before and after the introduction of the civil procedure rules.

8.8        The experiences of litigants in person are an important part of the Access to Justice recommendations. Through repeating some of the earlier surveys done during "Paths to Justice" and seeking the views of those who use the courts, it should be clear whether Lord Woolf's reforms have had a direct impact on litigants in person. This should extend to those who sought a different way of resolving their dispute. It appears anecdotally that courts are assisting litigants in person.

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OVERALL VIEW OF EXTERNAL SOURCES

9.1        External sources to the Lord Chancellor's Department show that with one or two exceptions the civil justice reforms have overall been well received.

9.2        Wragge and Co, in their survey of Legal Heads of FTSE 1000 companies showed that 89% of respondents were in favour of the reforms. The majority of those surveyed welcomed earlier disclosure, greater co-operation and faster resolution of claims. The shift from the old culture to the culture that Lord Woolf envisaged of a more co-operative, less adversarial style of civil litigation was not regretted. (Endnote 40)

9.3        The Centre for Dispute Resolution conducted a MORI poll of practitioners. Figure 12 shows there was an 80% level of satisfaction amongst respondents to their survey. Amongst the changes noted and welcomed were the reduction in litigation, speedier resolution and judicial case management. (Endnote 41)

9.4        Key aspects of the reforms were also welcomed by the Association for Personal Injury Lawyers (APIL) and the Forum Of Insurance Lawyers (FOIL) who distributed a questionnaire amongst their members. They reported an increase in the number of settlements, a more conciliatory attitude to settlement negotiations and widespread approval of Part 36.

9.5        Eversheds Access to Justice survey shows that 54% of its respondents said that the litigation process had improved. (Endnote 42) 71% in the Lovells survey of their litigation lawyers confirmed that parties are now treating litigation as a last resort and are going to greater lengths to try and resolve disputes without recourse to legal proceedings. (Endnote 43) As Frances Gibb writing in The Times noted: "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." (Endnote 44)

9.6        Early responses to the new Civil Procedure Rules were positive as well. The Law Society sent a questionnaire to members of its Woolf Network. Respondents believed that the rules were working quite well when the responses were published in September 1999. Although unhappy with some of the fees being charged (particularly the allocation fee for small claims, which has since been removed for claims of £1,000 or less), they believed that there was more willingness to settle cases and to exchange documents.

9.7        Anecdotal evidence also appears to show that the reforms have worked well.

• "Initial reports from the courts and practitioners suggest that the changes have proved less disruptive than was feared and that despite some minor problems, the CPR are generally working well in practice".

• "While there is still room for improvement, I am positive about the new rules". (Endnote 45)

• "I have no hesitation in concluding that an enormous amount has been achieved and that overall the have been reforms a success". (Endnote 46)

• "I think the whole thing [the Woolf Reforms] is a complete waste of time… I do not think it has speeded anything up, personally I think it has made it worse". (Endnote 47)

• Professor Michael Zander who is concerned about the cost of litigation and who argues that the sceptics' "worst fears have been realised" concedes the system is "superficially working quite well; the sky has not fallen in". (Endnote 48)

• "According to [Ian] Walker [then President of APIL], the reforms are by and large, running smoothly." (Endnote 49)

• "One aim was to let the courts operate more "efficiently" by making it easier for administrators and judges to do their job of processing cases…This has quite clearly been a roaring success. The other aim, more important but more difficult, was to provide greater "access to justice" in a user friendly system. That system would be predictable both in terms of costs and in terms of time-scale and both expense and delay would be reduced. In many cases this has happened and it is a credit to the reforms and those who conceived and implemented them". (Endnote 50)

9.8        The view of practitioners and judges, with a few exceptions, is that the Civil Procedure Rules are working well. There are specific areas singled out for praise in the surveys, such as the change in culture from an adversarial climate to a more co-operative climate and a reduction in litigation. Although there is criticism from some quarters about litigation becoming slower and more costly, this is not felt by the majority of those who have expressed an opinion. Both judges and lawyers are in favour of the changes. Attempting to change many of the most significant features and the culture of the civil justice system is a huge task and it would be surprising if everything worked well from the start. In spite of the far reaching changes and the increase in workload resulting from case management which the courts have absorbed there is a feeling that the new system is running smoothly and that all the participants; court staff, judges, lawyers and other users are working to fulfil Lord Woolf's vision of a new civil justice system.

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THE FUTURE

10.1        It is clear that these findings are very much emerging findings. Providing figures and anecdotal evidence is not an evaluation in itself and it does not intend to be. However, research which will include qualitative information is being carried out by Nottingham Law School and by the Institute of Advanced Legal Studies and the University of Westminster will allow us to assess the impact of the reforms more fully and consider the need for further change.

10.2        The Court Users survey and the Legal Services Commission survey will also provide information on the experiences of those who use the civil justice system. Further work will be undertaken to provide information on how the reforms have affected costs.

10.3        The Civil Justice Reforms are ongoing and other major initiatives, not dealt with by Lord Woolf are, contributing to the significant changes still planned for the civil justice system.

Housing

10.4        New civil procedure rules for housing and land will be implemented on 15 October 2001. These will streamline and simplify the procedures and should result in claims being dealt with more quickly. Landlords and tenants alike will have greater clarity as to when their case is likely to be heard. The new rules, for general possession cases, provide for a hearing no later than 8 weeks after the claim is issued. For trespass cases hearings will normally be sooner. An accelerated possession procedure already exists for claims for assured shorthold tenancies. These time scales may be too slow in cases where there is a potential for violence or there is a threat of harm to witnesses. The current court procedures already allow the court to abridge time scales. The Practice Directions that will accompany the new rules will highlight when judges should give particular consideration to the exercise of this power. Consideration is currently being given as to how the effects of these changes will be evaluated.

Specialist jurisdictions

10.5        There are specialist jurisdictions dealing with matters such as commercial and company cases, admiralty and patents. Work is currently under way to streamline rules of court on matters relating to these areas.

General protocol

10.6        At present there are 4 pre-action protocols in place, which are designed to encourage the settlement of disputes in particular areas before a case comes to court or to support the efficient management of proceedings where litigation is unavoidable. We are now developing a general protocol for all users, whether lawyers, businesses or litigants in person, which will apply where no other approved protocol exists. This should help all those in dispute to focus on resolving the dispute with consequential savings of time, money and stress and may enable working relationships to continue which otherwise might have been irreparably damaged by legal proceedings. A general protocol will help to reduce the need for a multiplicity of protocols for different areas of dispute.

Representative Claims

10.7        A Consultation Paper on Representative Claims was issued on 2 February setting out proposals for a framework which would allow representative claims in England and Wales.

10.8        Currently it is not possible for organisations such as consumer and environmental groups or trade associations to bring civil proceedings on behalf of the people whose interests they represent. These proposals aim to increase access to justice by widening the scope for organisations to bring or defend claims in the civil courts as the representatives of others, where they can demonstrate a sufficient interest in the matter.

Enforcement

10.9        Lord Woolf did not look at enforcement because a Departmental review was already underway. It is critically important to the delivery of justice, and the public's perception of justice, that judgments, once made, are enforced. The present system is not as effective as it should be. Phase 1 of the Enforcement Review - looking at procedures - has been completed with a report setting out its recommendations published in July 2000, and it is expected that new Civil Procedure Rules will be ready for signing in July 2001.

10.10        Phase 2 of the review will look at to include structures for, and regulation of, civil enforcement agents. This will enable us to consider a market based strategy for the first time. We want to make both the private and publicly funded sector more competitive, productive and innovative. The review will be examining the scope of a regulatory structure providing the creation of a new class of enforcement agents who would be officers of the courts, but not necessarily employed by the court. Both bailiffs and Sheriffs would come within the new system, but there would be an end to existing monopolies for enforcement activities in line with Lord Woolf's aim of having one set of rules for both the High Court and county courts.

Modernising the Civil Courts

10.11        Lord Woolf saw the introduction of new information technology as a key component of improving the civil justice system. The Modernising the Civil Courts Programme will provide the infrastructure in terms of IT support and business systems to carry forward this aim.

10.12        The Court Service launched a consultation paper on 5th January 2001 (Endnote 51), which sets out a broad range of proposals for new ways of managing the civil justice system, new ways of serving customers, and new ways of handling cases and supporting the judiciary and court staff. Ideas include separating 'back office' administration from hearing centres, the provision of on-line services available round the clock, and the development of the electronic file.

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Endnotes

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Annex A

Table showing the coming into force date of Civil Procedure Rules, Practice Directions and Pre-action protocols

PHASE 1
26 April 1999	Civil Procedure Rules Parts 1-51 Practice Directions to Parts 2-8, 10,12,14-37, 39-49, 51 Schedule of RSC and CCR Pre-action protocols for Personal Injury and Clinical Negligence Claims
26 May 1999	Practice Directions to Parts 2,33,34, RSC orders 53, 54, Directors Disqualification, Use of Welsh Language
11 August 1999	Practice Direction on Devolution Issues
13 December 1999	Practice Directions to CC Order 26, RSC Orders 46,71,91,95
28 February 2000	Civil Procedure Rules Part 53 Defamation Claims
PHASE 2
2 May 2000	Civil Procedure Rules Parts: 6B Service out of Jurisdiction 19 B Group Litigation 25 Interim Remedies 40D Court's Power in Relation to Land 47 Appeals from assessment 52 Appeals Practice Directions to Parts 6B, 19B, 40D, 52, RSC Order 85
3 July 2000	Practice Directions to Parts 43,44,45,46,47,48
2 October 2000	Civil Procedure Rules Part 54 Judicial Review Practice Directions to Part 54 and CCR Order 49 Rule 6A Pre-action Protocols for Construction and Engineering Disputes and Defamation Claims
15 October 2000	Civil Procedure Rules Parts 55, 56 Housing Practice Directions to Parts 55, 56
2001	Civil Procedure Rules Part 57 Contentious Probate Practice Direction to Part 57
To be decided	Civil Procedure Rules Parts 58, 59, 60, 61 Enforcement Practice Direction to Parts 58, 59, 60, 61