On 3 November 2000, Mr Justice Cresswell delivered his judgment in favour of Lloyd's in The Society of Lloyd's v Jaffray, a case which the judge acknowledged to be the culmination of “the largest and most complex piece of civil litigation this jurisdiction has ever seen”.
As one of the first large-scale and complex disputes to be tried largely under the Civil Justice reforms (which came into force on 26 April 1999), the Jaffray litigation clearly demonstrates the court's new approach to case management.
It provides corporate litigants and their legal advisers with a taste of what to expect when they become involved in a major piece of litigation.
The reforms have provided unquestionable benefits to litigants, including, for example, speedier trials and greater access to justice. However the court's ‘hands on' approach to the conduct and progress of litigation has placed new demands on corporate clients involved in major disputes. Such demands include increased costs, increased senior management time which needs to be devoted to the dispute, and closer co-operation with legal advisers. The court's approach in the Jaffray litigation provides an insight into the precise nature and effects of the demands made upon major corporate clients.
Civil Justice reforms
Under the civil procedure rules (CPR), through which the Civil Justice reforms have been implemented, the courts must now further the ‘overriding objective' of ‘dealing with cases justly' by actively managing cases. The Civil Justice reforms have introduced a new procedural code, placing new demands on the judiciary, on parties to the litigation and on their legal advisers in order to achieve the overriding objective.
The reforms' central theme is the court's approach to case management, with the aim of transferring the responsibility for management of civil litigation from litigants and their legal advisers to the courts. In particular, Lord Woolf (who led the reform process) observed that, “without effective judicial control ..... the adversarial process is likely to encourage an adversarial culture and to degenerate into an environment in which the litigation process is too often seen as a battlefield where no rules apply”.
The reforms aim to bring an end to a procedural regime under which the parties could take advantage of a variety of measures to delay the proceedings or to make their opponent's life difficult and costly, often secure in the knowledge that any costs sanction which the court might impose would be of little practical assistance to their opponent.
The CPR (and the related practice directions) include new provisions for active case management, such as: fixing timetables; encouraging the parties to co-operate with each other; identifying the issues at an early stage; and considering whether the likely benefits of taking a particular step justify the cost of taking it.
The court's new approach to case management can have had no greater test since the introduction of the Civil Justice reforms than the Jaffray litigation. If any litigants had doubted how the courts would deal with the increased responsibility placed upon them by the CPR in relation to the management of cases, this must have been quickly dispelled in the Jaffray action which demonstrated that the courts have embraced their greater powers of case management with open arms.
Although the court's approach to case management will vary from case to case, some of the areas of case management adopted by the court in the Jaffray litigation are likely to have a general application to all major corporate litigants involved in the litigation process.
Setting timetables is, perhaps, the area in which the new approach to case management is likely to have one of the greatest impacts upon corporate litigants involved in major cases. The likelihood that the court may intervene to set an ambitious timetable should not be dismissed lightly by major corporate litigants. Indeed, the court's approach to setting the timetable for the progress of the litigation, as clearly demonstrated by the Jaffray litigation, means that it is no longer the preserve of the claimant to dictate the pace at which its litigation will proceed. The court's approach also places additional pressures on defendants, who now have less time to respond to proceedings served upon them.
For example, the Jaffray litigation was commenced in December 1997, with trial projected for 2002 at the earliest, and possibly as late as 2004. Although the initial progress of the litigation was slow (given the enormous scale of the document review required for disclosure), at a case management conference in June 1998 Mr Justice Colman expedited the process for disclosure of documents. Further, in March 1999, the judge ordered that the trial process should be expedited, with trial commencing in October 1999. Mr Justice Colman's orders were made on the eve of the implementation of the Civil Justice reforms and were clearly intended to embrace the spirit of those reforms. The court later granted an extension of the trial date to 28 February 2000, although it did so reluctantly and it was not prepared to grant any further extensions (notwithstanding an application by the names, led by Sir William Jaffray, requesting it to do so).
The expedited timetable severely restricted the time available to the parties to comply with the various procedural requirements which must be completed before the matter may proceed to trial. These include disclosure of documents and the preparation of witness statements.
In the Jaffray litigation, although the court made an order which effectively limited the scope of the disclosure, the order also required disclosure substantially to be completed between October 1998 and March 1999 (although in the event documents were disclosed on a rolling basis after that date).
Given the number of documents which Lloyd's had to review, the heavier burden in complying with that order fell upon Lloyd's and its lawyers – Lloyd's alone disclosed some 60,000 documents, which were accumulated after a review of around 35,000 boxes of documents, the majority of which were not indexed – all of which had to be reviewed and disclosed in a very limited period.
Similar tight deadlines were imposed by the court on the preparation and exchange of witness statements, the filing of written submissions (both opening and closing), etc. Indeed, the review of such a substantial number of documents was followed immediately by the preparation of witness statements (a significant number of which were filed by both parties) which, in turn, had to be completed within a tight timetable, placing a significant burden on each side.
A further striking feature of the court's management of the Jaffray litigation was the steps taken by the court, at its own initiative, to require the parties to identify the issues in dispute, and to co-operate so far as possible throughout the litigation. This manifested itself most notably in two areas:
(i) at a series of case management conferences in June and July 1999, Mr Justice Cresswell required the names to clarify their pleadings, thereby narrowing the issues in dispute; and
ii) Mr Justice Cresswell ordered that the parties should prepare and agree statements of facts (which eventually ran to 19 lever arch files of documentation) dealing with the factual matrix to the dispute. The court then required the parties to attend a two-day case management conference in February 2000 in an attempt to reach agreement between the parties on any issues where there was disagreement arising out of the initial drafts.
These steps without doubt produced a significant saving of time at trial. Indeed, the court and both parties relied extensively upon the statements of facts during the trial. Sections of the documents were also used to form the basis of a number of chapters of the judgment.
That said, it should be noted that, as with disclosure, given the size and resources of Lloyd's and its lawyers, the main burden fell upon Lloyd's to produce and circulate the first draft of the agreed statements of facts; to amend the documents in the light of comments received; and to finalise the documents, all within the short time frame directed by the court and at the same time as preparing all other aspects of the case. Major corporate litigants can expect a similar burden to be placed upon them when involved in large-scale litigation.
Case management conferences
The case management conference (CMC) plays a key role under the CPR. Whilst the issues raised in the CMC are largely similar to those raised under the old directions procedure, CMCs are generally longer than directions hearings under the old rules. Further, the parties need to be prepared not only to deal with the proposed directions, but also to deal with alternative case management suggestions from the court. CMCs are convened regularly by the court, which may have its own agenda of issues which need to be addressed. As a result, client attendance at the hearings is essential.
The Jaffray litigation was no exception. In the period June 1998 to March 2000, there were approximately 24 days of CMCs (two of which were conducted over the telephone), resulting in approximately 51 orders being made by the court. Certain of the CMCs (for example those referred to above), took several days, and they ranged across a wide variety of issues. Dealing with ‘housekeeping' issues became a regular feature of the CMCs (and indeed throughout trial), at which the judge would often raise of his own volition numerous issues which he believed needed to be addressed.
The benefit to the parties of such a high level of court involvement throughout the process was unquestionable, providing the trial itself with clear direction. Indeed, by the time the trial began, the case was able to proceed immediately to the substantive issues rather than having to deal with housekeeping matters.
At the outset of the trial, Mr Justice Cresswell made a statement setting out various guidelines for the conduct of
the trial. He confirmed that the trial would be conducted in accordance with the overriding objective; that he would expect a high degree of co-operation between the parties; and that the case should be conducted expeditiously and fairly.
Although the case had been set down for three to six months, the judge also indicated that it was his hope that it would be completed within the lower end of the estimate (in the event the trial lasted for four and a half months).
Throughout the Jaffray trial, Mr Justice Cresswell maintained a tight grip on the progress being made, requiring the parties to provide (and adhere to) estimates on:
(i) the length of their oral opening and closing submissions;
(ii) the amount of time they required to cross-examine a witness; and
(iii) the amount of time they required to re-examine a witness.
The overall result (coupled with the fact that witness statements stood as evidence in chief) produced a focused trial, the length of which was no doubt significantly reduced by virtue of the court's case management.
The Jaffray litigation clearly provides an invaluable insight into the court's approach to case management in the context of major litigation.
The benefits of the increased involvement are clear; major pieces of litigation are dealt with expeditiously by the courts, and many issues which would previously have occupied many hours of court time are now disposed of (potentially even by agreement between the parties) at an early stage of the proceedings.
From a commercial point of view, the fact that the expedited timetables produce a speedier resolution to the dispute is clearly attractive.
However, the benefits do not come without a cost. Whilst the resources available to major corporate litigants (both in terms of large legal teams and financial resources) mean that they are able, albeit perhaps with some difficulty, to meet the time limits set by the courts, this can prove more costly, both in terms of legal fees and also in terms of senior management time which needs to be devoted to the case. As a result, many commercial litigants have yet to see the overall cost reductions originally forecast by Lord Woolf.
In particular, and as became apparent throughout the Jaffray litigation, senior management and in-house legal teams will now have to be prepared to devote potentially significant amounts of time to the case over a relatively short period of time.
Whilst external lawyers will, of course, bear the burden of the increased demands so far as possible, significant input will be required from clients in attending CMCs; in ensuring that all potentially relevant documents are identified so that they may be disclosed in accordance with what may be a very tight timetable; in the preparation of witness statements (many of which may be made by senior management); and in liaising closely with their legal advisers on all other procedural matters.
The cost of this involvement is likely to be significant for corporate litigants.
Gareth Hughes and Will Atkinson are associates in Freshfields Bruckhaus Deringer's Dispute Resolution Department in London.