The FRC’s Efficiency Statement – Pushing For a more Responsible Approach to Litigation

New guidance was published for users of the Financial Remedies Courts on 11 January 2022 by Mr Justice Mostyn and HHJ Hess.  The new guidance includes an Efficiency Statement and applies to all hearings before judges below High Court level (there has been an equivalent statement for High Court level and above since 2016) and replaces the Good Practice Protocol which had been in place since November 2019.  The suite of documents that form the new guidance can be found here, which merit reading in full, as court users will need to get to grips with them quickly.

We are hearing a clear message from the latest guidance: practitioners and litigants must take on greater responsibility to have a joined-up approach to proceedings to make better (more efficient) use of the court’s valuable and limited resources. Ultimately, if cases are conducted in a more focused way, this should ease the pressure on the court system – but will it lead to a better experience and outcome for court users?

In this post, we have rounded up of the aspects of the new guidance that we welcome most, as follows:

1. Judicial continuity

Aspiring to have the same judge presiding over as much of a case as possible is not novel (and all practitioners can think of cases that have suffered as a result of a lack of judicial continuity).

The new guidance sets out explicitly how it sees this being achieved in the Financial Remedies Courts: either a judge will conduct all hearings up to and including the FDR, after which another judge will be appointed for subsequent hearings, or the allocated judge will conduct all hearings apart from the FDR hearing. The guidance also states that any interim applications within the proceedings must be made to the judge allocated to the case.

We see this as having the potential to add value in different ways.  If at a First Appointment hearing a case is almost capable of settlement, being able to have the same judge who is familiar with the matters at hand preside over the FDR (rather than a judge with no prior knowledge of the case), could be the difference between the case settling or not.  On the other hand, where there are issues of compliance and genuine concerns about the efficacy of the FDR hearing, it may be beneficial for a judge who has knowledge of those issues from early on to be the one who is also conducting the final hearing (and dealing with any interim applications).

The extent to which this will be feasible, given the immense pressures on the court system, remains to be seen.  Practitioners ought to be proactive in considering in the run up to First Appointment hearings which hearing structure would work best for each case and ask whether the court can accommodate accordingly.

2. Consolidation and clarification of guidance 

During the course of 2021, there was a myriad of new guidance for the Financial Remedies Courts that came into play that court users are having to grapple with. The new Efficiency Statement helpfully pulls together the various threads of the guidance on expert evidence, witness statements, e-bundle and drafting of orders.

The guidance also offers total clarity as to exactly what the court expects to receive in advance of each hearing, how long it should be and by when.  Some may decry aspects of the guidance as ‘nannying’.  However, introducing greater focus as to what can and should put before the court, when there are such significant constraints on its time, is something we see value in.  The new guidance has also been prepared with litigants in person in mind, who represent an increasing proportion of court users; after all, practitioners and litigants alike need to be singing from the same hymn sheet.

3. Collaboration

Many practitioners strive towards taking a collaborative approach, notwithstanding ongoing litigation.  It is an expectation that is now made plain in the new guidance.

Significant frontloading of cases has been introduced, which requires enhanced collaboration on the part of the parties in advance of court hearings in order that the court has more joined up information and evidence to progress cases, even in advance of First Appointments. The guidance also mandates collaboration on case summaries (on which, see below), asset schedules and chronologies in advance of FDR and final hearings, indicating that producing competing documents for those hearings is no longer acceptable.

The changes will necessarily require all parties to be more proactive in the run up to hearings.  In our view, this presents practitioners with an opportunity to be more intentional in their preparation for hearings, so parties are as well placed as they can be to achieve settlement.

4. Advent of standardised case summaries

A standardised template case summary (entitled ‘ES1’) has been attached to the Efficiency Statement, setting out the key information parties are required to present jointly to the court at each hearing. The idea is that the document will carry the parties through the case and will need to be updated with each hearing. In addition to key dates and basic information about the parties, the new case summary requires each of the parties to identify what they perceive the key issues to be by answering ‘Yes’, ‘No’ or ‘Unsure’. They are even required to confirm their willingness to consider alternative dispute resolution and to list the open offers that have been made, with little opportunity to elaborate on areas beyond the scope of the template (each party is limited to a mere 80 words).

The new case summary strips back the information the court feels it needs for a judge to get to grips with a case at a first glance.  Some may be concerned that important nuance is lost, but the exercise perhaps allows court users to step back and assist them in taking a proportionate approach.

The recurring message from the courts has been – and is here – that time is limited, and a judge cannot be expected to look at every shred of evidence.  This may not feel particularly satisfactory to court users (and they may be better served alternative forms of dispute resolution) particularly with this greater emphasis on distilling issues as early as possible in proceedings. This is, however, consistent with the President’s guidance from his two recent ‘Views’:

“Parties appearing before the court should expect the issues to be limited only to those which it is necessary to determine to dispose of the case, and for oral evidence or oral submissions to be cut down only to that which it is necessary for the court to hear” (para 43 of June 2020 View)  

This was followed up in July 2021, as follows: “I make no apology for repeating this central message. There is a need for us all to redouble our efforts.”

5. Duty to negotiate openly

Practitioners will be familiar the duty to negotiate openly and reasonably on parties to proceedings with the introduction of PD 28A para 4.4 in 2019, and the potential for cost consequences arising from non-compliance.  We know from the case law since then that courts are more prepared to make costs orders in these circumstances but, in practice, there still seems to be a reticence in making early open offers.

The changes brought in by the new guidance makes the duty to negotiate openly harder to ignore. From now on, the court is expected to be updated on whether parties have complied with the duty; the fact of open offers feature in the new case summaries, and details of the efforts to openly negotiate must be set out in position statements.

Ignoring an open offer will be plain for all to see, and will increasingly will become a risky strategy – particularly since the new guidance emphasizes a willingness to impose cost consequences irrespective of assets in case.

(Interestingly, the guidance seeks updates on efforts to negotiate ‘responsibly’ – supplementing the words ‘openly’ and ‘reasonably’.  The idea of practitioners having to take more responsibility is one we see being echoed throughout the guidance.)

The aspiration for more focused litigation is a positive one; the new guidance suggests that it requires all court users to take on a more responsible approach to enable the courts to better serve them.

The culture change that we see from the courts might be summarised by the following:

• more front-loading
• a focus on key points
• support for courts to guide parties to closure at an earlier stage, and
• consequences for those who fall short

There is much here to be welcomed. We appreciate that some will see it as a call to step away from court perhaps for a more discursive exploration or an approach in which their own thoughts and values can be heard more loudly.  But that, as something that reduces burdens on the court, may be welcomed by the authors of the scheme too.