26th April 2017
The UK civil courts today are undergoing significant changes and are subject to an unprecedented drive towards offering more varied, flexible and cost-effective options to help parties to resolve their disputes. At the same time, parties to high profile and high stakes disputes are recognising that the UK courts continue to offer a dispute resolution service that is second to none. Walker Morris’ Commercial Dispute Resolution partners Gwendoline Davies and Malcolm Simpson consider some recent key cases and highlight some of the important and innovative options now open to commercial clients.
In recent years the structure of the civil courts in England and Wales has been subject to scrutiny like never before. Lord Justice Briggs’ wholesale review (Civil Courts Structure Review: Final Report, July 2016 ) has coincided with the HM Courts and Tribunal Service’s five year programme “to deliver a more effective, efficient and high performing courts and tribunals administration through the use of modern technology, an improved estate, and modernisation of current working practices” . A focus on digital tools; reduced reliance on buildings; and the effective and efficient allocation of work between judges and other court officials, aims to modernise the court system and the administration of justice generally. In addition, this all follows shortly after Lord Justice Jackson’s sweeping reforms to civil procedure (Review of Civil Litigation Costs: Final Report, December 2009), which elevated the importance of costs management and proportionality within the conduct of litigation.
More than ever, commercial clients are demanding, and the UK civil courts are delivering, a wide range of effective and efficient options for national and international dispute resolution, even where the stakes are at their highest.
In appropriate cases, the UK courts now offer the Shorter and Flexible Trial schemes. The schemes have been developed in response to feedback that businesses often prefer a less-exhaustive option, instead of the traditional ‘no stone unturned’ approach.
Under these schemes, key elements of the civil litigation process are shortened, tailored or even dispensed with altogether, in order that trials can be heard, and judgments delivered, earlier and at less cost than would otherwise be possible. The schemes are available in commercial cases brought in London. Cases are managed and tried by docketed judges, to ensure continuity and efficiency. They are opt-in schemes, though courts will encourage opt-in for suitable cases. There will be limited disclosure, paper applications and a trial within 10 months, all of which lead to a substantial cost and time saving.
The recent case of National Bank of Abu Dhabi PJSC v BP Oil International Ltd  EWHC 2892 (Comm) was the first trial to take place under the Shorter Trial scheme. Apart from the legal principles covered, this case is particularly interesting because, although the claim was worth over $68 million, it was fully resolved within just nine months from commencement of the claim and following a trial of just one day.
As with so many commercial disputes, this case centred on the parties’ differing interpretation of contractual provisions. Despite the substantial sum claimed, this case covered the correct interpretation of two contracts. The parties agreed that the case could suitably be dealt with under the Shorter Trial scheme; witness evidence was dispensed with; and there was very limited disclosure.
The court praised the parties for this cooperative and commercial approach, and the procedure was streamlined, and the trial and judgment were expedited, accordingly. It is estimated that costs incurred by each party amounted to some £350,000 which, in the context of such high value litigation, was proportionate and likely to have been significantly cheaper than a case fought under traditional English rules.
The Shorter and Flexible Trial schemes will not be appropriate for all commercial disputes – particularly those that are factually contentious and/or document-heavy. However this case demonstrates that the need for extensive disclosure and to follow full traditional litigation procedure, does not necessarily correlate with the value of a claim.
The schemes and this clear message are also consistent with Jackson LJ’s recent confirmation (in his keynote speech to the Law Society Commercial Litigation Conference 2016) that his next big ‘push’ will be to ensure that the traditional approach to voluminous standard disclosure is no longer seen by judges and practitioners as the default position, but rather a much more targeted approach.
The Shorter and Flexible Trial pilots have just been extended to enable more parties to take part, and will now run until September 2018.
In a similar vein, the past year has also seen the introduction of Insolvency Express Trials pilot. This will run until April 2018 and will deal with simple insolvency applications which can be disposed of in no more than two days; which require limited directions and disclosure; and where costs of each party will not exceed £75,000. It is anticipated that Insolvency Express Trials are likely to increase in number and popularity during in 2017, not least if the number of insolvencies rises generally as a result of economic instability associated with Brexit.
Alongside the modern emphasis on resolving disputes efficiently is the need for the British legal system to retain its worldwide reputation as the leading forum for the resolution of complex, high profile and high value commercial disputes.
Consistent with the aim to allocate work more effectively within the court system, the specialist Financial List has been introduced to handle claims: which are for more than £50 million and relate to banking or financial transactions; which would benefit from being heard by judges with particular expertise in the financial markets; or which raise issues of general importance to the financial markets.
A traditional adversarial approach will not always be appropriate in such cases and so the Financial Markets Test Case Scheme pilot (the FMTCS) was introduced on 1 October 2015 and will run until October this year. The FMTCS is intended to be a collaborative mechanism whereby parties may issue proceedings by mutual agreement and present agreed facts. It applies to a claim started in the new Financial List which raises issues of general importance to the financial markets in relation to which immediately relevant authoritative English law guidance is needed. The FMTCS provides a specialist procedure within which parties can ask the court to grant declaratory relief in a ‘friendly forum’ (that is, without there necessarily being a cause of action between the parties), so as to facilitate the resolution of market issues in the public interest.
The increased speed of the process will also support the financial markets by providing certainty at an earlier stage and clients’ commercial relationships are more likely to be preserved.
Several cases of note have been conducted via the new Financial List so far, including: Property Alliance Group Ltd v Royal Bank of Scotland Plc  EWHC 3342 (Ch), the first reported case to address claimants’ allegations flowing from the 2012 LIBOR scandal; GSO Credit v Barclays  EWHC 146 (Comm), concerning interpretation of the 2012 Loan Market Association Terms in the context of secondary loan trading; and the very recently reported conflict between Russia and Ukraine in a claim brought on behalf of the Russian Federation on a $3 billion Eurobond issued by Ukraine in 2013.
All of these cases were significant in terms of value, complexity and importance for the financial markets in particular, and the international dispute resolution stage more generally.
The UK has long been a vital legal destination for global companies to settle their disagreements. The Financial List cases to date seem to have been managed and decided with a speed and quality which may encourage other parties to follow, and so it is hoped that the Financial List and the FMTCS will prove an important development to maintain and enhance that reputation.
The recent Russia/Ukraine Eurobond dispute  is also particularly interesting because, as well as being dealt with under the new Financial List, it highlights the very significant tactical and financial value of a dispute resolution tool that is traditionally the reserve of UK civil litigation – that is, the summary judgment procedure.
Summary judgment allows swift resolution, in a preliminary hearing, of cases where a party has no real prospect of succeeding and there is no other reason to decide the case at full trial. It is an option which depends entirely upon the merits of a case and it can therefore mean that for suitable cases, even (as here) those worth in the $billions and involving issues as sensitive as international economic, political and military pressure, judicial resolution can be obtained quickly and cost-effectively and without all the trappings of a trial.
Another early dispute resolution promoted by the UK courts today is Early Neutral Evaluation (ENE) . ENE is a form of alternative dispute resolution (ADR) in which an independent evaluator – often a judge – is appointed to assess the merits of each party’s case or a particular part of it on a non binding basis. It gives the parties an opportunity to obtain an impartial and persuasive view on the relative strengths and weaknesses of their case before trial, which can assist in settlement negotiations and even in avoiding trial altogether.
Finally, the judiciary has announced that, as from June 2017, the specialist civil courts (including the Commercial Court, the Technology and Construction Court and the courts of the Chancery Division dealing with financial services, intellectual property, competition and insolvency) will comprise one umbrella specialist business dispute resolution jurisdiction known as The Business and Property Courts.
The new Business and Property Courts will preserve the familiar practices of the existing courts, but will allow for greater flexibility in the cross-deployment of judges with specialist expertise. There will be Business and Property Courts in Birmingham, Manchester, Leeds, Bristol and Cardiff (with expansion to Newcastle and Liverpool likely in future), enabling greater connection between work undertaken in the regions and in London.
The new structure should further enhance the UK’s reputation for international business dispute resolution and it is to be hoped that the increased flexibility, closer specialist working and the enhanced regional connection may result in increased efficiency and improved service delivery for business court users.
Whatever the subject or stakes of your commercial dispute, and whether it is UK-centred or involves cross-border issues, it is clear that the UK courts today offer a variety of flexible and cost-conscious options, and Walker Morris’ expert commercial dispute resolution team can help you to successfully navigate the most appropriate course for your case.
 the report can be accessed here
 HM Courts and Tribunals Service Business Plan 2014-15; and see HMCTS Reform Programme
 Law Debenture Trust Corp plc v Ukraine  EWHC 655 (Comm)
 As of October 2015 the court’s ability to order ENE has been codified into the Civil Procedure Rules.