Business-friendly Court reforms

Business-friendly Court reforms

A number of recent reforms to the English courts will have a noticeable impact on businesses conducting litigation here. For the most part, these reforms are welcomed as increasing access to a more cost-efficient and streamlined court system, but there are some proposals which could have a negative effect on smaller businesses with lower value claims.

 

The Business and Property Courts of England and Wales

We previously published an article on 10 October 2017 about the rebranding of the High Court business courts. The “Business and Property Courts of England and Wales” is the new umbrella term for the courts based in the Rolls Building on Fetter Lane, London, which form the largest specialist centre for financial, business and property disputes in the world. Those courts include the Commercial Court, the Chancery Division Courts (including those dealing with matters such as intellectual property and insolvency), and the Technology and Construction Court – in other words, all the specialist High Court divisions which focus on business and property disputes.

Business and Property Courts have also been established in the five main regional centres where similar work is carried out, namely Birmingham, Bristol, Cardiff, Leeds and Manchester. The intention is that there will be greater flexibility to deploy judges between these courts, to have greater harmony of practices and procedures, to speed things up and to spread judicial expertise in business disputes across the country.

The rebranded Circuit Commercial Court

At the same time, the Mercantile Court, part of the Commercial Court, has been renamed the Circuit Commercial Court. This court, which is based at the Rolls Building in London but also operates in eight regional centres, is an important court for businesses. The main Commercial Court only deals with the most difficult and high value business disputes, whereas the Circuit Commercial Court will continue to deal with a wide variety of general business disputes.

Unlike most of the other specialist courts where claims must be for £100,000 or more, there is no minimum value for claims to be issued in the Circuit Commercial Court. This is because the court recognises that some lower value business disputes can be hugely significant for smaller businesses and should be dealt with in an efficient manner by a commercial judge.  Yet the court is very prepared to deal with high value disputes too.

It has been suggested that a proposed new general High Court minimum claim value of £250,000 should apply to Circuit Commercial Court cases. This would mean that the county courts would instead deal with all business disputes up to £250,000, but as they do not have the same focus on or expertise in business disputes, we hope this suggestion will not go ahead. Furthermore, the county courts are typically less responsive and less efficient in terms of process and cases issued in the county courts will not be able to utilise the various expedited trial schemes which are currently available in the Rolls Building courts.

Streamlining, efficiency and pilot schemes

The last two years has seen the introduction of a number of pilot schemes aimed at modernising and improving the efficiency of the court system. The Shorter Trials and Flexible Trials schemes were both introduced in October 2015 and were designed to achieve more straightforward, faster and cost efficient case management and trials for business related litigation. Examples include restricting the amount of documentation the parties have to produce and cutting out various other non-essential procedural steps. Both pilot schemes will continue to run until October 2018. However, the option to issue proceedings using these schemes is not available in the county courts.

In November 2015, the successful electronic working pilot scheme began operating. On 25 April 2017, it became mandatory for court documents to be filed using the electronic filing system (known as CE-File) in the Rolls Building courts. Essentially, this means that instead of physically filing hard copy court documents at court (either in person or by post), documents can be uploaded online and be ‘stamped’ with an electronic court seal. This greatly improves efficiency and document management. Again, this system is not available to litigants using the county courts.  Further digitisation of the courts is planned.

Other proposed reforms include extending the hours of operation of the courts. A pilot scheme for flexible operating hours was originally planned to come into effect in May 2017. However, this has now been deferred until February 2018.

In other recent news, the Financial Times and other news outlets have reported that the City of London may also get its own brand new judicial complex focussing on fraud, economic crime and cybercrime. This will be backed by the City of London Corporation in partnership with HM Courts and Tribunal Service and will aim to promote and reinforce the City as one of the best places in the world to conduct financial and other business litigation in the face of fierce competition from overseas and concerns about Brexit. 

In general, the court reforms coming into effect are good news for businesses and should allow for increasingly cost efficient and streamlined litigation. However, if all of the proposals come to fruition, there is the potential for lower value disputes to be somewhat side-lined to less specialist and less responsive courts which could be problematic for smaller businesses which have relied on the London Mercantile Court, as it was formerly known. We will continue to monitor these developments. 

Contact our experts for further advice

Laura Beagrie, Paula Harris, Katrina Walter

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