Woolf Reforms

“The Woolf reforms may have reduced cost and delay but they have had a detrimental impact on civil justice overall.” Discuss

Background

In 1995 there was a survey carried out by National Consumer Council[1] which found that 3 out of 4 people who are involved in serious legal disputes were dissatisfied with the civil justice system. It was found that of the 1,019 respondents, 77 percent believed that the system was too slow, 74 per cent stated that the system was too complicated and 73 per cent said that it was unwelcoming and outdated.[2] A cursory look at history reveals that Pre-Trial process has been the subject matter of reports and inquiries- more than sixty over the past hundred years. Since 1968 there has been the Winn Committee[3], the report of the Cantley Committee[4], the massive Civil Justice review 1985-1988[5] and the Heilbron-Hodge Working party jointly set up by the Bar and the Law Society[6]. These have not been discussed in this Essay as , new system of Civil procedure took effect on the basis of the recommendations made by Lord Woolf in his June 1995 Interim Report[7] and his July Final report both of which are entitled ‘Access to Justice'[8]. For long senior members of judiciary boldly defended the significance of civil justice and were concerned about the degradation and the problems inflicting the civil justice system[9]. Genn further stated that he was aware of the sorry state of the civil courts[10]. It was in this background of the continued criticism of civil justice system that the previous Conservative Government appointed Lord Woolf to carry out a far reaching review and overhaul the civil justice system. His inquiry is the 63rd such review in 100 years[11]. The 3 perennial problems of cost ,delay and complexity have been inflicting the civil justice system for ages and it was these ills that Woolf reforms along with the previous attempts at reform of civil justice wanted to redress[12]. The whole ethos of civil justice is bound to fail if litigation which in itself is a costly affair cannot provide timely, less expensive and simple justice. Lord Woolf wanted to eliminate the defects in the civil justice system which were identified as being: too expensive, too slow, lacking equality between powerful and wealthy litigants and under-resourced litigants, too uncertain in terms of the length and cost of litigation, too fragmented and too adversarial[13]. Therefore in this light it should be stated over here that in March 1994, the Lord Chancellor set up the Woolf enquiry whereby ways of reducing delay and accessibility of civil proceedings, and of reducing their cost were to be looked[14]. On 26th April 1999 New Civil Procedure Rules and the accompanying Practice Directions came into force. These rules constitute the most fundamental reform of the civil justice system of the 20th century, introducing the main recommendations of Lord Woolf in his final report, Access to Justice. He described his proposals as providing ‘A new landscape for civil justice for the 21st century'[15].

Woolf Reforms- The need for reform

The whole ethos of Woolf reforms was centred around avoiding litigation and promoting settlement between parties at dispute[16]. While it will be analysed in detail whether the much needed reforms fulfilled their purpose or not, it can be stated in the affirmative that the Reforms were very well received by various quarters of the legal profession[17]. However, the reforms have not escaped criticism and one of the major critic is Michael Zander. The inquiry by Woolf published its final report in 1996 and thereafter the proposals resulted in the Civil Procedure Act 1997 and the Civil Procedure Rules 1998 which are the same[18] for the County court and High Court. It needs to commented over here that the changes sought by Woolf Reforms bear effect through the Civil Procedure Act 1997 and the CPR 1998, although these have been supplemented by new practice directions and pre-action protocols[19] . Lord Woolf when he began his examination of the Civil law process identified diverse problems[20]. Interim report published by him in June 1995 sates that ‘the key problems facing civil justice today are cost, delay and complexity, these three are interrelated and stem from the uncontrolled nature of the litigation process. In particular there is no judicial responsibility for managing individual cases or for the overall assessment of the civil courts[21]…..; Heilbron Hodge who called for a ‘radical appraisal of the approach to civil litigation form all its participants' paved the way for Woolf report and accompanying reforms . It was analysed[22] by Lord Woolf that without effective Judicial control the adversarial process of the civil courts was ‘likely to degenerate into an environment in which the litigation process is too often seen as a battlefield where no rules apply' immediate effect of which would be disproportionate expense and unpredictable delay[23]. Being pretty considerate to all these problems Lord Woolf envisaged a New Landscape for the Civil justice which includes the following features[24]: Ø Litigation will be avoided wherever possible Ø Litigation will be less adversarial and more co operative. Ø Litigation will be less complex. Ø The timescale of litigation will be shorter and more certain. Ø The cost of litigation will be more affordable, more predictable, and more proportionate to the value and complexity of individual cases. Ø Parties of limited financial means will be able to conduct litigation on a more equal footing Ø There will be clear lines of judicial and administrative responsibility for the civil justice system. Ø Judges will be deployed effectively so that they can manage litigation in accordance with the new rules and protocols Ø The civil justice system will be responsive to the needs of litigants. Hence the genesis of reforms. For paucity of space I shall be discussing the main reforms that have an immediate effect on cost and delay: Pre-Action protocol, Part 36, Judicial Case Management and ADR. These were the brainchild of Lord Woolf, in this context I will compare Judicial Statistics as regards the impact of these reforms and will also evaluate the criticisms meted out to these reforms from various corners. The proposed objective of all these reforms was to[25] : 1) Encourage settlement/ avoid litigation 2) Encourage parties to be less adversarial/ more cooperative 3) Reduce Complexity of litigation. 4) Reduce Delay 5) Reduce Cost It is but utmost important to discuss the reforms to see whether these objectives have been met or not.

Pre-action Protocols

The idea was pioneered by Lord Woolf and can be considered as one of the most important innovations of the Woolf Reforms. Pre-action Protocols focus on the conduct of parties in the pre litigation stage which will be taken into account by the courts both during the case and also towards the end when the final decision regarding allocation of costs is taken. Pre-action protocols serves an effective means to this end as they are accompanied by the practice directions which describe their chief objective as encouraging exchange of early and full information about the prospective claim, avoiding litigation by promoting settlement and where litigation ought to be the last resort ,to support the efficient management of litigation[26]. It was stated by Lord Woolf in the Final report on Access to Justice (1996) that Pre-action protocols are intended to ‘build on and increase the benefits of early but well informed settlements'[27].Clearly one can say that if parties know everything before hand, it does promote healthy environment by way of co-operation and the civil litigation process can be avoided. There have been 9 pre-action protocols produced so far covering vast areas of practice such as personal injury, medical negligence and housing[28] . By 2003 they also existed for construction and engineering, defamation, professional negligence and judicial review. What was even batter was the fact that all these were supplemented by a Pre-action protocol practice direction[29].

The purport of these protocols is to[30] :

1. Set down pre-court procedures 2. Encourage good communication and early settlement Further these protocols cast a duty on the claimant to give the defendant details of the claim and on the other hand the defendant must respond to these claims within a stricter period of time. The protocols state that the key documents on which the party case wholly rests must be disclosed at an early stage. Both the defendant and the claimant must agree on the use of an expert witness where relevant. If the parties fail to comply with these pre-action protocols the immediate result is penalty whereby the party at fault must pay some or all costs of the proceedings. [31] Claims however, should not be issued until at least three months after the initial letter of claim once the claimant has written to the prospective defendant disclosing his claim [32]. Evaluation/impact of the protocols will be carried out in the next section but it may be mentioned here that although pre action protocols may be expensive and can lead to front loading of costs in cases which would settle without them they might be able to prevent the unnecessary costs of issuing proceedings and listing for hearing in the same cases. Another benefit that follows from the protocols could be that they might give the parties a healthy steer towards Alternative Dispute Resolution[33].

Part 36

As a result of the Woolf Reforms Part 36 was put in place which promotes greater incentive for the parties to settle their differences now. Under Part 36 procedures exist for either party to make an offer to settle their disputes and was significantly revised with effect from 6th April 2007. Now a part 36 offer can be made before the proceedings start and also in the appeal proceedings. ‘Offeror' is referred as a party making the offer and ‘Offerre' is the one who is receiving it. Upon acceptance of offer by the claimant a duty is cast on the defendant to pay the sum offered within 14 days, failure to do so will allow the claimant to enter judgement. Any pre- action offer to settle while making an order for costs will be taken into consideration by courts. A side refusing it will be treated less generously. It happens in offers which are open to the other side for at least 21 days after the date they were was made. Lord Woolf suggested that for a settlement offer to qualify as an offer under Part 36 it must be made in writing with the intention to have the consequences of part 36. As regards Defendant making the offer, a period of not less than 21 days must be specified whereby defendant liability for claimants will be established if the offer is accepted. Revised Part 36 however allows the withdrawl of any offer after the expiry of the ‘relevant period' as defined in Rule 36.3.1.c without the court's permission[34]. Michael Zander stated that when the defendant paid a sum of money into the court account as an offer of settlement, the case would end upon acceptance of the money. However if the offer is refused by the claimant, the defendant can still increase his payment-in. Upon further refusal the case will go on trial and will be determined by the outcome. If the Claimant does not recover, more than the amount paid in, the court will order him to pay the cost of both sides from the date of payment-in. It would be worth mentioning over here about the technique called as Calderbank letter because technically the system applied only to cases which concerned a damage or other money claim whereas under this if the defendant makes an offer of settlement ‘without save as prejudice to costs' it would virtually be treated by the courts in the same way as if it was payment into court. Pre -CPR this rule 36 was applied inflexibly. Post 1999 the courts can mitigate the harshness of the traditional rule where the claimant was automatically ordered to pay the cost of both the sides upon failure to secure a penny more than the amount paid in by the defendant. New rules now provide for the Claimant's offer which was considered to be a big change. For money claims Part 36 payment apply. However, where the claim is not monetary the defendant can still make a part 36 offer (as opposed to part 36 payment) and thereafter the same basic rules shall apply. However courts discretion is open . All in all allowing the claimant to make an offer of settlement under the CPR has proved to be a welcome step[35]. The analysis of Part 36 will be discussed in the next section.

Case Management

This is the most significant innovation as it was perceived by Lord Woolf that case control by judiciary rather then leaving the conduct of the case to the parties will bring the cases to trial quickly and efficiently[36]. It can be seen that the litigants in this new system will have much less control over the pace of the case than in the past. As the case is now subject to timetable parties will not be able to draw out proceedings and cause delay. A positive duty is cast on the court which means[37] :

CPR 1.4(1)

1) encouraging parties to co-operate with each other in conduct of the proceedings 2) identifying the issues at an early stage 3) encouraging parties to use ADR 4) helping parties to settle whole or part of the case. Under the CPR Cases must be assigned to 1 of the 3 tracks: small claims, fast track or multi-track as all these have their own separate regime depending primarily on financial value of claim[38].

Small Claims

Limit for small claims cases is 5,000 except for personal injury and housing cases where it is 1000. Proportionate procedure is followed where straight forward claims with a financial value of not more than 5,000 can be decided without needing substantial pre hearing preparation and the formalities of substantial trial and also without incurring large legal costs[39]. The procedure is controlled by district judges on an informal basis[40].

Fast Track

Cases involving amounts betweenw 5,000-15,000 are for this track unless they are deemed unsuitable. A set timetable of no more than 30 weeks to trial, limited pre -trial procedure, trial restricted to no more than 3 hours which was further extended to 5 hours, restriction on oral evidence form experts and recovery of standard fixed costs was the concept well established over here[41].

Multi track

Cases involving amounts in excess of the fast track limit or cases with lesser amounts which are considered too complex or too important to be dealt with as small claims or fast track cases are dealt with here[42]. Evaluation of the impact of judicial case management on reduction in cost, delay and complexity will follow in the next section.

ADR

ADR though have not part of the Court system it has been brought into connection through the CPR. Lord Woolf in his Final Report urged that people should be told and encouraged to resort to growing number of grievance procedures, or the ADR before taking up the judicial review proceedings. These ADR are featuring prominently in the rules as CPR 1.4(1) states that ‘the court must further the overriding objective by actively managing cases'. However, Woolf commented that ADR cannot be imposed compulsorily on parties at dispute in civil litigation[43]. There are no complex court procedures to be adhered while using ADR and also it saves a lot of time and avoids the ever escalating litigation costs.

Experts

This was another area with which Woolf was concerned. It was contended by him that expert evidence was a major cause because of which excessive expense, delay in some cases and complexity increased. He wanted to do away with the system where both the both parties could appoint their own experts, rather wanted a single expert who would owe his allegiance to court rather than the parties. Given the criticism to his proposal he admitted that though significant shift towards single experts is not possible but it was possible to initiate a shift in that direction[44].

Impact/Evaluation of the Reforms

Before evaluating the reforms it may be stated in the affirmative that the Overriding Objective of the new CPR was to enable the courts to deal justly with the cases. CPR rule 1.1(1) reads : These rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly[45]. The combined effect of the major reforms was to avoid parties going to litigation and promote settlement. These will be analysed with empirical data now. Also the major focus is to evaluate reduction in cost and delay. New CPR can be described as the most revolutionary change brought about in the civil process for over 100 years as a result of which the operation of civil justice has been radically altered. The basic intent was to avoid litigation and promote early settlement and early evidence reveals success as during May to August period in 1999, there was a 25 per cent reduction in the number of cases issued in the county courts as compared with the previous year. Further fall of 23 per cent by the end of January 2000 was witnessed. Lord Phillip stated that the reforms have proved to be effective in changing the whole ethos of litigation but the litigation is still expensive and still problems with the cost of litigation exist. It was commented by Gary slapper et al that overall reforms can be seen as an triumphant step in the right direction as wider proportion of society is able to achieve greater access to justice especially when the issues at dispute are relatively small and can be dealt with quickly and cheaply in the lower courts. However, the reforms are not that good when it concerns complex commercial disputes.[46]. As a result of the reforms much positive have happened, culture has become less adversarial, there is better exchange of information between the parties before the start of litigation and settlement now focusses on the substantive issues in the case[47]. ‘Cards on table' culture as it can be called is a major factor leading to settlement. Communication and exchange of information at an early stage always help[48]. Claimant offers under Part 36 have been singled out for praise as claimants could now obtain response from the defendant and defendants appreciated them as they could set upper limits to the bargaining range. Protocols by focussing on formulating clear ground rules on the basis of which claim was formulated and responded to, encouraged parties to focus their minds on the key issues at an early stage and thereby led to greater openness[49]. File survey undertaken by Goreily et al revealed, median time from medical report to settlement had fallen from 170 days pre woolf to 123 days post-woolf, its reflective of the fact that settlement has become quicker[50]. In case of large claims which were subject to court timetables solicitors thought the speed has become quicker. As regards cost it was acknowledged that costs increased because of ‘front-loading' as now more work is required to be done at an earlier stage.[51] Evidence regarding protocols suggested that it had some impact in reducing costs as earlier exchange of information could lead to speedier settlements because both sides become aware of the issues much sooner. Case management evaluation received a mixed response. Experience in relation to High Court Masters in London was perceived as positive one leading to a greater incentive to reach agreement before hearing. However, outside London the experiences were not that positive[52]. Judicial statistics reveal number of claims falling to less than 1,90,000 in 2005 as compared to 2,20,000 in 1998. . All this has happened since the coming into force of Woolf reforms, though favourable economic climate also accounts to this[53]. Cases have diverted from being litigated in the courts as a result of the use of pre-action protocols and claimant offers under part 36 which encourage pre-trial settlements . Result being that only 8 per cent of cases which are listed for trial settle at the time of trial and 70 per cent settle much earlier. This is suggestive of the fact that the reforms have been a positive step in the out-of-court settlements which has the advantage of providing a quick/speedy end to the dispute coupled with reduction in costs. First evaluation of the new Civil Procedure Rules by Government[54] pointed that overall reforms have been beneficial. It was stated that cases are not settling at the doors of the court but much earlier. Litigation is regarded as last resort by lawyers and clients who make more use of ADR. Pre-action protocols were believed to be a success. All these facts were further supported by the latest research[55] into the civil justice system[56]. A major official study published by the institute of Civil Justice at the Rand Corporation in California (Kakalik et al.,1996) looked into the effect of American Civil Justice Reform Act,1990 based on a 5 survey of 10,000 cases. The study suggested that JCM lead to a reduced time to disposition . Early use can yield reduction of one and a half or 2 months to resolve cases that last at least 9 months. Discovery timetable further reduces time to disposition and reduces the amount of hours spent by a lawyer working on the case. However one drawback is that case management will ultimately lead to approximately 20 hour increase in lawyers work overall[57]. There have been so far only 2 proper research studies of the impact of Woolf reforms. The first one was carried out for the Civil Justice council and the Law Society (Goreily et al.')[58]. The second was conducted for DCA by Professors Peysner and Seneviratne[59] on the case management aspects of the reforms[60]. It was contended on the basis of research by Profs J. Peysner and M. Seneviratne that protocols generate better preparation of cases, co-operative attitude amongst parties, more voluntary disclosure and more widespread employment of single joint experts and that the days of the “hired gun”, the expert generally instructed by one side only and perceived to be “pro-claimant” or “pro-defendant” are largely over and neither practitioners nor judges expressed any nostalgia[61]. It is important over here to mention the benefits as a result of implementation of Woolf Reforms which have been indicated from a variety of sources[62] : Ø A less adversarial culture between parties is developing. Peysner and Seneviratne(2005) reported , “the overall view was that the culture has changed for better. Ø Pre-action protocol appear to be working to promote earlier settlement and probably more settlement. Ø Part 36 offers or payments -and especially the possibility of part 36 offers by claimants - seem to be helping to achieve earlier and perhaps more settlement Ø The use of single joint experts is working better than critics feared. Ø Considerable efforts have been made to promote consistent approaches to case management throughout the country. Judicial Statistics reveal average waiting time from issue of claim to trial has reduced form 85 weeks in 1998 to 52 weeks in 2005 in the county courts[63]. Analysing Statistics form DCA, Reynolds Porter Chamberlin(RPC) a large city law firm found that in the first year of the reforms 41.3 per cent drop in cases being litigated took place and in the following 5 years it further declined to 1.7 per cent in 2005[64]. District Judge Terence John being sceptical, however stated that the reforms have changed the civil legal world for better and are here to stay and further observed that 70 per cent of the claims are being dealt through the small claims track and 20 per cent through the fast track, all this makes recourse to justice realistic[65]. Also Judge Charles Harris, QC stated that trails are held pretty briskly as a result of case management which does not allow cases to prolong because of soporific or incompetent litigators[66].

Criticism

The major criticism was mounted by Zander who raised the following objections: 1) There is immense pressure[67] on parties to enter settlement once the case begins which is further outlined in CPR 1.4(2)(e). 2) Empirical evidence suggest that it is not necessary that pre-trial hearing will reduce cost and delay[68]. 3) Report by T.Goreily et al suggests that overall time before and after reforms have remained the same[69]. However it may be stated, there are no further empirical data on delay as a result of reforms[70]. 4) It was contended that reforms have led to increased judicial discretion in the decision making of pre-trial judges which leads to inconsistent and unappealable decisions[71]. 5) Procedural timetables for the fast track are doomed to failure[72] because of the inability of huge proportion of firms failing to adhere to prescribed timetables for range of reasons. Thus, disproportionate and unjust sanctions will be imposed causing injustice to clients for the failings of their lawyers[73]. Rand report further reflects that case management leads to problem of front loading[74] as it adds to the lawyers work hours with more work needed at an earlier stage and thus more costs[75]. There were others who criticised the reforms and it was argued that out of court settlements creates injustice, because parties usually hold unequal bargaining positions because of their financial background[76]. Lord Justice Jacksons preliminary report on costs review also confirms the view that costs of litigation have increased as a result of ‘front loading' [77]. Another problem as cited by Lord Phillip is that courts are under resourced to deal with case management and the modenisation of civil courts and introduction of IT has failed to go hand in hand with Woolf reforms[78]. Mr. Justice Burton of the QBD[79] assessed the new rules and outlined problems along with the benefits of reforms. Problems were identified as ‘ inflexibility on part of court in not allowing the extension of time between parties themselves, risk of lawyers and clients exploiting ‘standard' disclosure by concealing important documents, single joint experts usurping the role of judges, time guillotines being pushed on parties and assumptions by judges while making summary assessments. Benefits listed include: pre-action protocols, encouraging settlement, judicial intervention and Part 36 offers to settle[80]. I would very briefly like to discuss a few cases which happened after the reforms:

1) Huck v Robson[81]:

Court of appeal allowed the claimant's appeal who was not given indemnity costs or interest as his 95-5 offer under Part 36 was considered ‘derisory'. It reflects the uncertainty created by the new rule[82].

2) Three Rivers DC v Bank of England[83]

The case started in November 1995 and ended after 10 years in November 2005 with the claimant abandoning the claim against the bank. Law Lords over here reverted to pre-CPR philosophy and the majority decision resulted in 10 more years of fruitless litigation with skyhigh costs. Zuckerman commented that such an approach would be fatal to CPR reforms unless the judiciary be persuaded to embrace the overriding objective of dealing with cases justly[84]. It needs to be mentioned that though there was criticism, it was only in minority and the reforms have achieved a lot as they were directed to promote a culture of settlement and co-operation.

Conclusion

It can be easily concluded, overall the Reforms were supported by both branches of the legal profession, judiciary and both the lay and the legal press welcomed them[85]. Promoting settlement and avoiding litigation can be the biggest boon to litigants who otherwise when get entangled in the costly and everlasting court procedures suffer a lot. The reforms intended to focus on reduction in cost and delay, however they did not escape criticism and reduction in cost is still considered to be a debatable area. But the reforms were a step in the right direction and were deemed triumphant as they have resulted in justice being accessible to wider proportion of society especially when problem is of small nature and can be quickly and cheaply dealt with in lower courts[86]. Wholistically, the advantages/positives of the Reforms outshine the disadvantages. The reforms were a positive way for the future, still a lot of work needs to be done in a few areas for making timely, inexpensive justice available to the lay man. Reduction in cost of litigation as a consequence of reforms was not fully realized but nonetheless it cannot be said that reforms had a detrimental impact on civil justice overall as timely exchange of information between the parties does promote culture of co-operation and settlement if not always and as a result of the reforms problem of delay in litigation were well catered[87]. There was a move away from the adversarial culture and increase in out of court settlements was seen. It can be concluded that the foundation stone for a better and prosperous litigation culture has been laid, what needs to be done now is to rectify the shortcomings of the Woolf reforms and build on the so called revolutionary/ much needed positive reforms aiming to avoid litigation and promoting timely settlement of disputes, so that parties no longer are faced with the never ending litigation process. As an old Chinese proverb goes “ A journey of a thousand miles starts with a single step”. [1]Seeking Civil Justice: A survey of people's needs and experiences, 1995, NCC. [2]Gary Slapper and David Kelly, The English Legal System 9th edition, Routledge.Cavendish, Chapter 9(The Civil Process), pg 334. [3]Report of the Committee on Personal Injuries Litigation,1968, Cmnd. 369. [4]Report of the Personal Injuries Litigation Procedure Working Party, 1979,Cmnd.7476. [5]Civil Justice Quarterly, 1988, pp 281-312, also Richard Thomas. ‘Civil Justice review -Treating litigants as consumers', 6 Civil Justice Quarterly, 1990, p 51. [6]Civil Justice on Trial- The Case for Change, 1992. [7]11 Civil justice Quarterly, 1995, pp 231-49. [8]Michael Zander, Cases and material on the English Legal System 10th edition( Cambridge University Press,2007) Chapter 2 Pre-trial proceedings, pg 47 [9]Genn, Judging civil justice: the Hamlyn lecture 2008( Cambridge university press,Cambridge:2010( Chapter 2) , pg 48. [10]Ibid 9, pg 51. [11]Elliott and Quinn, The English Legal System 10th edition (Pearson:2009), Chapter 22, pg 511. [12]Ibid 8. [13]Peysner and Seneviratne, ‘The Management of Civil Cases: A Snapshot' (2006) 25 Civil Justice Quarterly 312 [14]Ibid 2. [15]Elliot and Quinn, The English Legal System 10th edition (Pearson:2009), Chapter 22, pg 516. [16]Genn, Judging civil justice: the Hamlyn lecture 2008( Cambridge university press,C