200. |
To return to the first
of the caveats mentioned above, namely, the difficulty in determining if and to what
extent reforms result in the saving of costs, one controversy which has arisen in
assessments of Lord Woolf's reforms is instructive. This involves discussion of the costs
consequences of pre-action protocols. |
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201. |
Pre-action protocols
(discussed further below) are guidelines as to reasonable conduct by parties to a dispute
before proceedings are commenced. They promote openness between the parties with a view to
facilitating early settlement and, if no settlement occurs, making progress of the case in
court more efficient and its case management more effective. Failure to observe pre-action
protocols may lead to costs sanctions if the case subsequently goes to court. |
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202. |
A recurrent criticism
of these measures is that they have resulted in a "front-end loading" of costs,
that is, in the parties having to incur costs at an earlier stage of the proceedings. The
complaint is that in the many cases which settle shortly after commencement of
proceedings, the costs of observing pre-action protocols are unnecessarily incurred. This
was one of Professor Zander QC's main objections to the reforms :- |
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208. |
These differences of
view illustrate the difficulty of assessing the costs impact of pre-action protocols. |
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208.1 |
Despite the
"front-end loading", costs may be saved or at least no additional expense
overall may be incurred if the case is in any event one not likely to settle shortly after
the start of proceedings. |
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208.2 |
Many such cases can
only be expected to settle after the issues are crystallized and the legal advisers have
felt able to assess the strength of each others' cases, so that costs have to be incurred
before that point is reached. The settlement may come only after the expense of pleadings,
discovery and exchange of expert reports and witness statements. |
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208.3 |
The front-end loading
of costs in such cases therefore does not mean additional costs but merely costs (in the
same or a lesser amount) being incurred at an earlier stage. |
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208.4 |
If the reforms lead to
an early settlement this may well mean that notwithstanding the costs incurred, savings in
costs overall are achieved, although that would necessarily be conjecture to some extent
since one cannot know for sure how much would have been spent if the case had gone on
without adherence to the pre-action protocol. Even if the costs bill were to be the same,
the parties would benefit from the earlier disposal of the dispute. The court too would
benefit either from the dispute settling before action is brought or from early disposal
of the action. |
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209. |
The debate also
illustrates the fact that a particular reform may increase costs in some cases (those that
would quickly have settled anyway) but may have reduced costs in other cases (where
parties settle early or without starting proceedings). It follows that some may favour the
reform as a cost-saver while others are critical of the additional expense. The net effect
on costs from the system's overall point of view is hard to assess since it is hard to
measure what costs would otherwise have had to be incurred. (Note 158) |
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210. |
Where the case does not
settle but fights to the trial's conclusion, the early requirement of precision in the
formulation of the parties' respective cases is likely to be beneficial and may save costs
at the interlocutory stage. |
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210.1 |
Slack practices such as
uninformative pleadings and unfocussed discovery are more likely to be avoided, reducing
the number of false issues, the production of irrelevant documents, the need for requests
for particulars and specific discovery, as well as interlocutory applications to enforce
such requests. |
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210.2 |
With earlier
crystallization of the issues, the case file is likely to be less cluttered with
irrelevant materials making interlocutory steps and ultimately the trial more efficient
and less costly. |
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211. |
The fact however
remains that the overall impact of a complex set of reforms on litigation costs is
difficult to assess and quantify. This has led The Lord Chancellor's Department in
assessing of two years' performance of the reforms to state cautiously :- |
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