Get on with the business of doing business – a quick tour of the 11th Commercial Court Guide

The 11th edition of the Commercial Court Guide (the “Guide”) comes into force this week, on Wednesday 6 April 2022.

The Guide reflects the next stage of evolution for the Commercial Court. Some updates have been brought about by the “steep learning curve" of the Covid-19 pandemic; other updates bring the Guide in line with recent procedural changes such as the Disclosure Pilot Scheme and Practice Direction 57AC (“PD57AC”).

The overall aim of the update is to make litigation speedy, efficient, and of high-quality for parties, to give certainty in transactions and let businesses “get on with the business of doing business".

This is a short summary of some of the significant changes.

1. Remote hearings

Remote hearings were imposed on the court by the Covid-19 pandemic; however, under the new Guide, the court may continue to grant permission for remote witness evidence, including use of internet video conferencing.

In fact, the Guide requires litigants to at least consider remote evidence for witnesses that have to travel substantial distances to give evidence that is not expected to last longer than half a day at a hearing (H4.1).

The Video Conferencing Guideline in Annex 3 to Practice Direction 32 remains relevant, and the party proposing to provide evidence via video link must serve a memorandum dealing with the matters in Annex 3 and outline precisely what arrangements they propose for remote evidence.

The Guide reminds parties that witnesses located abroad may need permission from authorities in their jurisdictions before giving evidence for a trial before the courts of England & Wales. Compliance with this requirement, or a statement that it does not apply, should be confirmed in the party’s pre-trial checklist.

2. E-bundles

Another change to court procedure necessitated by the pandemic but here to stay is e-bundles.

The Guide introduces an updated Appendix 7 on Preparation of Bundles. The new norm is to provide the court with electronic bundles, with hard-copies only necessary if requested by the judge. There is also emphasis on minimising use on hard-copy bundles by parties and participants generally.

Appendix 7 to the Guide prescribes the form and structure of e-bundles, which includes a 100% default view, removal of meta data, and optical character recognition amongst other requirements.

The Guide also reminds parties that trial bundles should only include documents that a judge will be asked to read or will be shown at the hearing. This normally includes only a very small proportion of disclosure documents (J4.3).

3. Foreign law

The Guide expands on the procedure for adducing evidence of foreign law, recognising that “Expert evidence of foreign law features in a significant proportion of Commercial Court trials” (H3.1).

Parties must now invite the Court to consider how to approach evidence of foreign law, taking into account how much foreign law is in issue, the importance of the points, time and cost efficiency, the nature of issues and legal sources, and any previous English law decisions on the point (H3.4).

The suite of approaches are set out in paragraph H3.2 and range from the parties exchanging expert reports and preparing a joint memorandum to the court taking judicial notice of the foreign law sources.

The Guide allows for experts to give oral evidence at trial where their evidence is not agreed, but also envisages oral submissions from counsel at the trial instead, who may refer to foreign law materials and any served expert reports.

In line with promoting cost efficiency, the Guide outlines that foreign law experts may not always be necessary where parties have already retained foreign lawyers, and this should be discussed between the parties ahead of the CMC (H3.5). Further, where there is a pre-trial review, any directions for oral expert evidence on foreign law should be re-considered (H3.7).

4. Arbitration

Changes to section O of the Guide make it easier for the Court to throw out unmeritorious claims.

Parties seeking to challenge an arbitral award for serious irregularity under section 68 of the Arbitration Act (the “Act”) must now show a serious ground for thinking an irregularity has occurred or that there is or will be substantial injustice (O8.3).

Likewise, a challenge under section 67 of the Act must be based on serious grounds for a contention that the matters affect the substantive jurisdiction of the tribunal as set out in section 30 of the Act (O8.4). It should, further, be supported by evidence to show absence of jurisdiction (O8.5).

The Guide reminds parties that the court may dismiss claims without a hearing, and it will do so where challenges to awards under section 67 or 68 of the Act, or the evidence filed in support, has no real prospect of success (O8.6).

As in the old guide, if the court dismisses a claim under section 68 for serious irregularity without a hearing, the applicant may still apply for a hearing; however, doing so risks an adverse costs order on an indemnity basis if the application is again dismissed. Under the new Guide, this also applies to a challenge of jurisdiction under section 67 (O8.7).

The Guide also deals with security for costs under section 70(6) of the Act and security for awards under section 70(7), prescribing that any application must be dealt with “very promptly”, and be listed on the first available Friday after issue (O8.11).

5. Disclosure

The Guide confirms that Practice Direction 51U applies to most proceedings in the Commercial Court, with exceptions to this general rule listed in Appendix 15.

Parties are required to consider disclosure at an early stage; once pleadings have been served, parties should promptly identify the significant matters in dispute to inform the List of Common Ground and Issues and the List of Issues for Disclosure (C6.1).

Parties are now required to give careful consideration to how they will prove or defend their factual case at a trial on an on-going basis. Depending on the nature of the case, the Guide encourages seeking ongoing advice from counsel instructed for trial (E5.1) and this review should guide the approach to disclosure (E5.2).

Where it applies, the Guide discourages parties from filing an unnecessarily lengthy or complex Disclosure Review Document (“DRD”). Rather, the DRD should be kept simple and concise, and the court expects DRDs to be approved in the first CMC of a case within 1 hour. Using different models of extended disclosure is also to be avoided (E2.2).

The Guide also advises that it may be appropriate for disclosure to be dealt with as a Less Complex Claim under PD51U, even if the claim is generally complex or its financial value is very high (E2.5).

6. Witness evidence

The default position under the Guide is that witness statements must be prepared in accordance with PD57AC and its appendix, which came into force last year (H1.1).

For more detail about PD57AC, read our previous post here.

Although witness statements for interim applications are outside of the scope of PD57AC, the key principles from PD57AC now also apply to interim witness statements. For example, interim witness statements must not be used to argue an application; rather, they should be confined to (a) matters of fact, and (b) satisfying any specific CPR provisions that requires the matter to be included in a statement (F8.2).

7. Time estimates

The court’s experience has been that parties under-estimate time far more often than they overestimate. Paragraph F5.3 of the Guide sets out the court’s powers to adjourn hearings and/or penalise parties in costs where pre-reading or hearing time is under-estimated.

The new approach to trial estimates now includes the judge’s pre-reading time. The trial timetable should provide for reading, opening submissions, witness evidence, expert evidence and closing submissions (including time for any written closings or outlines) (J5.4).

8. Other updates

In addition to the above, some other key changes include:

• the form of Case Management Information Sheet in Appendix 2 has been updated to include new questions on case management, use of IT, and initial disclosure;
• claimants must now file an updated draft order the day before a CMC, setting out the agreed and rival directions proposed;
• “Alternative Dispute Resolution” is now referred to as “Negotiated Dispute Resolution”;
• updated guidance on service out of the jurisdiction has been included in Appendix 9, including changes necessitated by Brexit; and
• statements of case should still be up to 25 pages long; however the maximum number of pages that does not require the court’s permission has increased to 40 pages.

You can view a copy of the Guide here.