Cymraeg | Access Keys | Site Map | Feedback

The Admiralty and Commercial Courts 2002 - 2003 Report

Contents

Introduction

1. This Report covers, in the same way as last year, the work of the Commercial Court and Admiralty Court, as the same Judges sit in both Courts, share a common administration and follow the same procedures. When we refer to 'the Court' in this Report, we refer to both the Admiralty Court and the Commercial Court.
2. The jurisdiction of the Commercial Court is wide. It extends to any claim relating to the transaction of trade and commerce (including commercial agreements, import and export, carriage of goods by sea, land and air, banking and financial services, insurance and reinsurance, markets and exchanges, commodities, the construction of ships, agency, arbitration and competition matters). The Admiralty Court has exclusive jurisdiction over certain maritime claims (including the arrest of ships, collisions and salvage), but many actions relating to disputes under bills of lading are brought in the Commercial Court as are almost all charterparty disputes.
3. The Court has again experienced a very busy year in terms of the volume and complexity of cases it has handled.
4. It has also proved an important year in relation to the development of the Court:

• Work on the Commercial Court Project continued with some advances in IT.
• A number of overseas judges visited the Court.
• The Court and its users have begun consideration of the Government's proposed constitutional reforms.

5. The Court would not have been able to achieve what it has without the hard work and help of the Court staff, again so cheerfully and unstintingly given.
6. Although out-dated technology, very poor accommodation and a scarcity of resources continue to impede the ability of the Court to serve its users in the way in which those users expect and the Court would wish, there has been an improvement in the technology available to the court, and there are grounds for optimism that the improvement in technology will continue, and that the accommodation for the court will be properly considered.

The work of the Commercial Court

7. Although, as in the past year, no single event dominated the work of the court, disputes in international insurance and reinsurance provided a very significant volume of work.
8. The nature of the Commercial Court's work has, therefore, been very varied, ranging from long trials to short hearings of one day or less. Reports of all material decisions are available from the Court's website free of charge and can be most easily found through the Court's on-line Index.

• The Metro litigation, which was referred to in the reports for the years ending 30 September 1999, 2001 and 2002. Phase 4 was postponed and phase 5 was tried during the year. The judgment is reported at [2003] EWHC 2792 (Comm).
• A number of disputes relating to insurance and reinsurance of films continue to be managed together under the title, 'The Film Finance Litigation'. One of the major trials settled as a result of judicial intervention through a case settlement conference.
• The largest single piece of litigation in the Court in 2002, Sphere Drake v Euro-International, a case relating to 'carve out' reinsurance, concluded at the end of December 2002, with the trial having lasted the entire year. The judgment is reported at [2003] EWHC 1636 (Comm).
• The Court tried a long and important case on the competition aspects of liner conferences: Arkin v Borchard Lines Ltd [2003] EWHC 687 (Comm).
• The action brought by the liquidators of BCCI against the Bank of England has seen a number of interlocutory applications as a prelude to the trial, due to commence in January 2004. One of these is reported at [2003] EWHC 145 (Comm).
• The claim by Equitable Life against its former directors and auditors has already been the subject of interlocutory applications in the Court. One of the applications is reported at [2003] EWHC 112 (Comm).

9. The Commercial Court has again been able to accommodate some very urgent cases. By way of example, a dispute in relation to broadcasting rights in Russia arose in July, and the court was able to arrange a two- week trial in September.

The work of the Admiralty Court

10. This year has seen a return to the wider jurisdiction of the Admiralty Court, with claims arising from collision, cargo damage, salvage, oil pollution, ship mortgages and limitation of liability. The flexibility and speed of the Admiralty Court in dealing with the arrest, release and sale of vessels has been enhanced by the revised form of the relevant rules and associated Practice Direction. The Admiralty Registrar and the Admiralty Marshal continue to provide an essential part of the Court's services.

The volume and sources of the business of the Commercial Court

11. The number of claim forms issued has fallen slightly from 1213 in 2002 to 1144 in 2003.

12. The number of cases given trial dates has also fallen from 277 to 255, and the number of trials which have settled have also fallen from 204 to 174. The Court continues to experience a settlement rate of 60 per cent of cases where trial dates are given. Some may think that this is a much higher rate than is desirable. However, the refining of issues, the evaluation of the parties' positions in the light of discovery and exchange of statements and reports are all part of the process that can bring about a settlement, particularly if this all takes place within a timetable that concentrates the minds of the parties and their lawyers on the impending trial.

13. The number of trials the Court hears each year fluctuates, and is not a real indicator of the volume of business in the Commercial Court as the Commercial Court hears a number of long trials.

14. The number of applications issued rose from 1692 in 2002 to 1759 in 2003, but the number of those that were heard fell from 1288 to 1136, indicating a better settlement rate. The number of without-notice applications remains broadly constant. In addition, the Court dealt each week with a substantial number of further applications made in writing.

15. During the year a further survey was conducted to ascertain the proportion of the Commercial Court's work which emanates from businesses based abroad. This was carried out for a period of eight weeks between March and May 2003, and was of shorter duration than the survey referred to in last year's report. This showed that 56 per cent of claimants were based outside England and Wales, and 61 percent of defendants were based outside England and Wales.

The volume of business of the Admiralty Court

16. Last year, a substantial drop in cargo claims was noted (40 down from 137). This trend has continued (20 down from 40). Despite this, the overall number of claim forms has increased from 125 to 157 reflecting use of the Court's wider jurisdiction.

The number of trials heard continued at a consistent level reaffirming the conclusion that there is a focus on the larger claims. (It must be born in mind that claims involving sums less than £150,000 are commonly transferred to the London County Court [Business List]).

The picture as regards applications issued is similar to last year (69 as opposed to 70), and there was a small decrease in applications heard (95 down to 80).

Case Management

17. Case management continues to play an important part in the work of the Court. In all but the exceptional case, it is the general practice of the Court to set a timetable down to trial at the first case management conference, and to require the parties to fix, within a few days of the case management conference, a date for the trial within the range of dates specified at the case management conference. The failure of some solicitors and counsel to attend at the Listing Office to fix the trial date in accordance with the Order made at the CMC, was addressed during the year by careful monitoring of compliance with the Order of the Court and taking action to ensure that any who were in default attended promptly to fix a date.
18. If some form of ADR is to take place, the timetable will allow for this, but will nonetheless contain fixed dates, including a provision for the fixing of the trial date, so that proceedings can continue if ADR fails, without the need to return to the court. It is the experience of the Court that it is generally essential to ensure that a date is fixed for trial so that the minds of the parties are concentrated on the ultimate progress of the case.
19. The imposition of "progress monitoring dates" by which the parties must report their compliance with the pre-trial timetable has enabled the Court to take active steps where necessary to ensure that cases are ready for trial by the fixed dates.

Case Management Conferences without a hearing

20. In last year's report, we referred to concern about the necessity of holding Case Management Conferences in straightforward cases where the parties were agreed on directions. As we indicated, the issue was considered further and the Court issued formal guidance on 29 November 2002 and published it on the Court's website. The guidance sets out the circumstances in which the Court will consider dispensing with an oral hearing and the procedural steps that are to be strictly followed in such cases if the Case Management Conference is to proceed without an oral hearing.

Lead Times

21. The Court attaches very considerable importance to its lead times, and to making available a rapid means of dispute resolution to the financial, trading and business community in the City and elsewhere in the world. The Court continues to make its lead times publicly available on a regular basis on the Commercial Court web site.
22. As trial dates are normally fixed within a few days of the Case Management Conference, and as Case Management Conferences take place generally within two to three months after the issue of proceedings, litigants wishing to commence proceedings in the Commercial or Admiralty Courts will have a guide as to when a trial is likely to be heard.
23. It is inevitable that lead times will fluctuate, but our aim is to keep lead times for trials within the following bands:

Fluctuation

Duration	Lead Time
1-2 days	4-5 months
1 week	7-8 months
2-3 weeks	9-10 months
4 weeks or longer	11-12 months

 

24. Lead times for applications for a half to a whole day's hearings vary, but the aim is for a lead time of 1 to 2 months.
25. In order to keep lead times within these bands, the Court encourages parties in suitable cases to transfer the cases for trial at a Mercantile Court. On 30 December 2002, the Court published guidance to facilitate such transfers. In July 2003, the Users' Committee appointed a sub-committee to consider whether any further steps could be taken to facilitate the use of the Mercantile Court in London.

Alternative Dispute Resolution

26. In the spring of 2003 a working party was established under the joint chairmanship of Mr Justice Colman and Mr Justice Tomlinson to review how ADR had been operating in the Court, and whether any changes were necessary to the Court's rules or procedures. The working party is well advanced on its task and a report will be published in the coming year.
27. If an ADR order is made, the parties are generally required to report the outcome to the Court as quickly as possible. Unfortunately, parties who are successful in settling a case do not normally report whether this was the result of ADR. The Court is attempting to keep figures, but because of poor reporting, these may not be as valuable as is desirable.

The Arbitration Act

28. At the request of users of the Court, the Commercial Court began early in 2002 to collate statistics relating to the number and types of appeals and other applications under the 1996 Act. In the calendar year 2002:

• Leave to appeal applications: 77 applications were made; 25 were transferred to other courts, 32 were refused, 8 were settled or abandoned and 12 granted.
• S.67 and s.68 applications: 30 applications were made; 2 were transferred out, 10 were settled or abandoned, 11 failed and 3 succeeded.
• Applications for injunctions: 28 applications were made.
• Applications for declarations: 7 applications were made.

29. The Court welcomed the decision of the Court of Appeal in The Northern Pioneer [2002] EWCA 1878, and its guidance on the way applications for leave to appeal should be made.
30. Concern continues to be expressed as to whether the strict requirements imposed under the Act for leave to appeal to the Commercial Court were impeding the development of the law, particularly in the field of shipping, insurance and reinsurance. This is an important subject, which clearly needs further study and consideration. Mr Peter Rogan and Mr Bruce Harris agreed to undertake some preliminary work to enable the Court and the Users' Committee to decide on a course of action

The Judges of the Court

31. In October 2002, the Court had 13 Judges, including Mr Justice Toulson, who had by then become Chairman of the Law Commission. In July 2003, Mr Justice Tomlinson was appointed Judge in Charge of the Commercial Court upon the appointment of Mr Justice Thomas as Senior Presiding Judge. This reduced the number of Judges to 12, as no new appointment has yet been made. It is hoped that a further appointment will be made soon.
32. The workload of the Court has required eight of the Judges of the Court to sit throughout each term. During the year, eight Judges were available for most of that period. This was reflected in the increase in sitting days.

Commercial Court

Admiralty Court

A complement of 8 judges should be available to the Court for most of the coming year. Without that complement, the Court could not maintain the current workload and the service it provides to its users.

33. The volume of work, particularly the number of long trials and the increased complexity of the matters that are considered without an oral hearing, has placed a very considerable strain on the resources of the Court. However, with the support of Mr Justice Simon and Mr Justice Field (who sit for some of their time in the Court), and those nominated to sit as Deputy Judges, it again proved possible to avoid standing any trial out of the list.

The Registry, the Listing Office and the Case Management Unit

34. The Court is dependent on the very close working relationship it enjoys with the Registry, Listing Office and Case Management Unit, which operate under the overall management of Keith Houghton. A list of the staff is at Appendix 1.
35. The Registry, under the leadership of Rod Morgan, provided essential assistance to the Court and the profession when the new Rules, Guide and Forms were introduced, and throughout the year in managing the numerous paper applications made to the Court.
36. The operation of the Listing Office is key to the smooth operation of the Court and the disposal of its work, and it has operated during the year with conspicuous success under Angela Hodgson and her team. To the delight of all, Laura Donnell was promoted to become her deputy on Terrie Castle's decision to move from London. Jenny Roussel and Dan Pope joined the team for part of the year. The Judges and the users are again very grateful to them for undertaking this work with such cheerful efficiency.
37. The Case Management Unit performs an important function in managing the numerous paper applications in relation to case management, checking on whether parties have complied with the timetable set by the Court at the Case Management Conference, and ensuring the cases are ready for trial. It also administers applications under the Arbitration Act. They still have to use two separate IT systems, but once the electronic file project referred to at paragraph 48 is operational, then they will be relieved of this outmoded and unnecessary burden.
38. During the year, a decision was made by the administration of all the Courts at the Royal Courts of Justice to apply for Charter Mark. Two customer satisfaction surveys were undertaken under the supervision of the energetic officer manager, Pauline O'Brien. Initial feedback was very positive, save for adverse comments on the accommodation. Good feedback was also received from those Admiralty and Commercial Courts users who took part in the Court Service National Survey.
39. We have taken this opportunity to review internal forms and practices to improve our service and are piloting changes to the provision of in-court support to our Judiciary and court users.

The Users' Committees

40. The Users' Committees have been very supportive of the Courts and continue to provide an invaluable forum to discuss issues relating to the work of the Court, to assist its development through working parties and to obtain feedback. The list of members of the Commercial Court Users' Committee is set out at Appendix 2, and the List of the members of the Admiralty Court Users, Committee at Appendix 3. The Commercial Court Users' Committee has been very active in its support of the Commercial Court Project as well as affording a lively contribution to issues such as Court Fees, where a proposal put forward by the Government had overlooked the potentially absurd effect on multi-party commercial litigation.

The Commercial Court Project: accommodation

41. The history of the project, which covers both the Admiralty and Commercial Courts, was summarised in last year's report. That report, while recording that the prospect of funds being available for a new court building was very slim, made clear that the Judges and the Court Service would, with the help of the professions, continue to examine all the available options. The need for improvement, which has been clearly identified, must be met.
42. The task of pressing for new accommodation received strong support during the year from the Bar and the solicitors (both individually and through their professional associations) and the City. The Lord Mayor, Alderman Gavyn Arthur, has been tireless in advocating the need for new accommodation, and the importance of the Court to the maintenance of London as a pre-eminent financial centre. He made this a central theme of his Mansion House speech in November 2002, and throughout his mayoralty did a great deal to move the project forward. Many options were examined, including an examination of whether there is scope for premises that could be shared by the Court and by arbitral institutions.
43. As a result, a decision was made in June 2003 to undertake a detailed study for the financing of new accommodation, with a view to the construction of a new building within the Royal Courts of Justice. Work on this is well in hand.

The Commercial Court Project: IT

44. Progress has been maintained with other aspects of the Commercial Court Project.
45. The Website now has its own address (www.commercialcourt.gov.uk) so that it can easily be accessed. The site is visited regularly, both by those in the UK and from all over the world.
46. E-mail communication with the court became possible during the year. A subcommittee of the users generously gave of their time to assist in advising the Court on the use of e-mail and the provision of formal guidance for its use. This guidance was published on the website in March 2003 and also sets out the addresses to be used.
47. However, without an electronic filing system, it is difficult to expand its use much more than in providing an alternative means of communication with the Court which has principally been used for the listing and for submitting skeleton arguments.

The Commercial Court Project: Electronic File

48. During the course of the year work began on a new project to create an electronic filing system for the Court. This is by far the most significant development in providing acceptable IT for the Court and its users.
49. In the spring, a sub-committee was formed, comprising partners and IT managers of some of the major users of the Court, to advise on the establishment and implementation of a project to enable claim forms to be filed electronically, and the court file to be held in electronic form. The sub-committee has endorsed the outline plans for the project and the way in which it is to be implemented. The Judges of the Court would like to record their immense gratitude to those who are advising the Court, for the generosity with which they have made time available.
50. However, the project has proceeded much more slowly than could ever have been anticipated. Some initial delay occurred because there was uncertainty as whether there would be funding, due to a review of IT funding within the Department for Constitutional Affairs. After that was resolved, further delay was attributable to the fact that the IT department at the RCJ does not have sufficient staff. Pleas for the assignment of more staff did not then meet with any success. When the IT department at the RCJ was asked to design, set up and operate the IT system for Lord Hutton's enquiry in the summer of 2003, all the available staff had to devote their time to that. Although the IT system used by Lord Hutton's enquiry won universal praise, and has demonstrated the ability of the IT department, the unfortunate effect has been to delay the Commercial Court's electronic file project.
51. In view of the delays, the risk that some further event will mean that the staff cannot devote time to the project, and the lack of response to the request for further staff, it is impossible to provide an accurate idea of the timescale within which the project is likely to produce an operational system. However, while this report has been in draft, there have been encouraging signs that progress can be made. It is possible to express cautious optimism that, with the support and enthusiasm which those advising the Court have shown for the project, we will be able to implement the first stage of a new system over the coming year. If so, this will be the first step towards realising the considerable benefits providing a modern system for IT will have for the Court and its international standing.

The Financial Markets Law Committee

52. In 2003, the Secretary of the Financial Markets Law Committee joined the Users Committee; the Financial Markets Law Committee is interested in looking at ways in which information could be provided to the Court in relation to the wholesale financial markets where the workings of those markets might never before have been the subject of a court decision or where information about the practices of a market might be important to the court.
    
53. A presentation was made by the Secretary to the Users' Committee and discussions are under way with a view to producing some workable proposals.

Visitors and assistance to other countries

54. In June 2003, the first conference of EU Commercial Court Judges was held, under the auspices of the Lord Chancellor's Department. The Lord Chancellor, Lord Irvine of Lairg, gave the opening address, and many of the judges of the Court presented papers or made interventions. It was a very successful conference and the Judges look forward to attending future conferences.
55. The Court also participated in June 2003 in a programme for commercial officers at UK embassies throughout the world, designed to introduce them to the legal services available in London, and to the Courts. While at the court, they attended part of the trial in Jordan Grand Prix v Vodaphone Group [2003] EWHC 1956 (Comm).
56. The Court received a number of visitors, including Judges from Bangladesh, China, Guernsey, Guyana, Japan, The Netherlands and Taiwan. These were short visits.
57. In July 2003, the Judges of the Commercial Court of Uganda and their Registrar returned to spend further time at the Court. On this occasion they were accompanied by members of the profession. They had implemented in their own Commercial Court some of the procedures that they had observed on their visit in 2002 and wished to examine further the procedures of the Court.
58. Apart from receiving visitors interested in learning about the work of the Court, the Judges of the Court visited other countries to speak about the work of the Court. Mr Justice Morison visited the Czech Republic under the programme organised by Mr Justice Colman; Mr Justice Thomas and Mr Justice Gross gave a two-day seminar to the Jamaican Judiciary on the Commercial Court in conjunction with the British-Caribbean Jurists' Group.

The effect of the proposed Constitutional Reforms

59. In June 2003, the Government announced a major programme of constitutional reform and published Consultation Papers in July 2003. Three aspects of that programme are of particular importance to the Court:

    a. The appointment of Judges The Users' Committee appointed a sub-committee, representative of the City and the professions, to prepare a response to the consultation paper on the appointment of Judges, issued by the Government. The Users' Committee wanted to ensure that there was a clear understanding of the need and the procedure for appointing judges for the Court who have had a number of years' experience of commercial law prior to appointment. The report of the sub-committee was published on 7 November 2003 and is available on the Court's website.

    Under the present constitutional arrangement, it is the Lord Chancellor who designates the judges who sit in the Court. The sub-committee has put forward the view that when a new appointment is required for the Commercial Court, then the candidate should be selected on the basis that he will primarily sit in the Commercial Court and that his deployment should then be a matter for agreement between the Lord Chief Justice and the Judge in Charge of the Commercial Court.

    b. Resources The failure to provide proper resources is evident in the lack of modern IT, and the very poor accommodation provided for the Court. It has been proposed by the Judges' Council that the provision of resources for the courts be governed by a statutory framework, which would ensure both the provision of sufficient resources and the judiciary's involvement in the making of decisions in the spending of those resources. The response of the Judges Council is published at http://www.dca.gov.uk/

    c. Queen's Counsel The importance to the Court of Queen's Counsel is also set out in the response of the Judges' Council.

Appendix 1: Commercial and Admiralty Court Office Staff

Appendix 2: Members of the Commercial Court Users' Committee

The Judges of the Commercial Court
The Judges of the Court of Appeal and the Lords of Appeal in Ordinary who have been Judges of the Commercial Court
Mr Paul Arditti, Ince and Co
Mr Michael Brindle QC, succeed by Mr William Blair QC in July 2003
Mr Mark Camley, Director, Supreme Court Group, the Court Service
His Honour Anthony Diamond QC
Mr Nigel Durham, The Sugar Association and Refined Sugar Association
Mr Peter Farthing, Clyde andCo
Mr Julian Flaux QC
Mr Jonathan Gaisman QC
Mr David Gold, Herbert Smith
Mr Robert Goldspink, Morgan Lewis and Bockius
Mr Tony Guise, President of the London Solicitors Litigation Association
Mr Mark Hamsher, London Maritime Arbitrators Association
Mr Bruce Harris London Maritime Arbitrators Association
His Honour Judge Hallgarten QC
Mr Arthur Harverd, Carter Backer Winter
Mr Ian Hunter QC
Mr J Jarvis QC
Mr Geoffrey Johnson, Group Chief Legal Advisor, Lloyds TSB plc
Ms Veronica Kendall, COMBAR
Dr Jost Kienzle. CMS Hasche Sigle, Hamburg
Mrs P Kirby Johnson, Director General, GAFTA
Ms Janet Lambert, Barlow Lyde and Gilbert
Mr Stuart Logan, FOSFA
Mr David Lucas, Middleton Potts
Mr David Mackie QC, Allen and Overy
Mr Stephen Males QC
Mr Peregrine T. E. Massey, Thos R Miller
Mr Stelios Niotis, Chairman, BIMCO Documentary Committee
Mr Neil Palmer, Senior Clerk, 20 Essex Street
Ms Betty Pedrini, Norton Rose
Mr Alastair G Schaff, 7 King's Bench Walk
Mr Ian Taylor, Freshfields
Mr Martin Thomas, Financial Markets Law Committee
Mr V. V. Veeder QC
Mr Peter Vipond, Insurance Market Liaison Panel, ABI
Mr Andrew Whittaker, General Counsel, The Financial Services Authority

Secretary:
Mrs Angela Hodgson, Clerk to the Commercial Court

Appendix 3: Members of the Admiralty Court Users' Committee

Mr Justice David Steel
Mr Registrar Miller
Mr Keith Houghton, Admiralty Marshal
Mr C Hume, The Shipowners' Protection Ltd
Mr Nigel Meeson QC
Mr RC Hough, Tindall, Riley (Marine) Ltd
Mr RJ Sayer, Ince and Co
Mr N Teare, Q.C.
Mr M Telford, WK Webster and
Mr N Greensmith, Clyde and Co
Mr WA Bishop, Holman Fenwick and Willan
Ms Sara Burgess, Gard (UK) Ltd
Mr TD Brenton, Q.C.
Mr J Hulmes, Hill Dickinson

Secretary:
Pauline O'Brien, Deputy Admiralty Marshal