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Commercial Court Report 2003-2004

For the year ending 30 September 2004

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. During the year work on the Commercial Court Project continued, reaching a point at which all relevant support for the Project has been given and a final Government decision is awaited. The Court and its users have contributed to the Government's consultation process on its discussion paper ' A New Way of Appointing Judges.'
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 are grounds for optimism that the improvement in technology will continue. We cannot do more to stress the urgent need for an improvement in the accommodation for the Court.

The work of the Commercial Court

7. Although, as in the previous year, no single event dominated the work of the court, disputes in international insurance and reinsurance again 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 action brought by the liquidators of BCCI against the Bank of England has occupied the time of one judge for the entire year. The most recent of the interlocutory applications resulted in a ruling from the House of Lords on the topic of legal professional privilege. The trial proper began in January 2004.
• The claim by Equitable Life against its former directors and auditors has continued to generate interlocutory applications and the trial is due to start after Easter 2005.
• The many disputes relating to insurance and reinsurance of films being managed together under the title 'The Film Finance Litigation' have largely been resolved by settlement.

9. The Commercial Court has again been able to accommodate very urgent cases. In the last year the ability of the Court to offer an expedited date for trial seems often to have contributed to early settlement of the dispute.

The work of the Admiralty Court

10. This year the exercise of the Court's jurisdiction has been as broad as last year and the number of claims issued has remained steady (see paragraph 16). The Court has sought to maintain its reputation for ease of access, speed and flexibility in the arrest, release and sale of vessels. The Court acknowledges the role played by Solicitors in this and the Admiralty Marshal has been greatly assisted by early notification of Claimants' intention to arrest vessels.

The volume and sources of the business of the Commercial Court

11. The number of claim forms issued has again fallen slightly from 1144 in 2003 to 1104 in 2004.

12. The number of cases given trial dates has also fallen from 255 to 222, and the number of trials which have settled has fallen from 174 to 164. The settlement rate has been about 70 per cent of cases where trial dates are given. 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. The Court believes that the promotion of settlements is an important part of its function.

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 very long trials and very many heavy interlocutory applications. The number of trials heard in 2004, 58, is in fact a greater number than in 1999, 50, although fewer than any year since then.

14. The number of applications issued fell from 1759 in 2003 to 1663 in 2004, whilst the number of those that were heard fell only very marginally from 1136 to 1114. The number of without-notice applications fell slightly. In addition, the Court dealt each week with a substantial number of applications made in writing.

15. During this year no formal survey was conducted to ascertain the proportion of the Commercial Court's work which emanates from businesses based abroad, but it is apparent that the pattern has not markedly changed with a clear preponderance of both Claimants and Defendants being based overseas.

The volume of business of the Admiralty Court

16. The Court has seen a similar number of claims issued to last year. (The figures do not include claims issued out of District Registries of the High Court.)

The number of trials heard is down on previous years but this is reflected in a higher number of settlements than usual. No fewer than 20 cases listed for trial (some 90% of the total) settled before hearing.

The number of applications issued is up on last year (83 as opposed to 69) and there was a small decrease in applications heard (80 down to 70).

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.
18. If some form of ADR is to take place the timetable will allow for this, but will usually 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. The calibre of the professional users of the Court is such that this is rarely necessary.

Case Management Conferences without a hearing

20. In the report for 2002 we referred to concern about the necessity of holding Case Management Conferences in straightforward cases where the parties were agreed on directions. 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. The Committee has since reported and its work has contributed to consideration at a higher level of possible measures to ensure that this valuable facility is better used.

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 concluded that it was unnecessary to introduce any substantial changes and in particular undesirable to introduce any mandatory features into the ADR procedure. However the working party did conclude, after consultation with the Court of Appeal, that some further impetus and encouragement should be given to the consideration of ADR after judgment has been given in the Commercial Court and before the parties have started to incur the expense of preparing for a hearing in the Court of Appeal. A suitable revision to the Commercial Court Guide will be issued.

The Arbitration Act

27. Concern continues to be expressed as to whether the strict requirements imposed under the Act for leave to appeal to the Commercial Court are impeding the development of the law, particularly in the field of shipping, insurance and reinsurance. This is an intractable problem, since it is probably the case that any relaxation of the requirements would lead to a reduction in the attractiveness of London as a forum for the resolution of disputes in fields other than those mentioned above. In any event, since the requirements are statutory the Court's hands are tied.

The Judges of the Court

28. In October 2003, the Court had only 12 Judges who sat with any regularity, including Mr Justice Toulson, Chairman of the Law Commission. In the summer of 2004 the strength of the Court was augmented by the appointment of Mrs Justice Gloster.
29. 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. Interestingly, the number of judge days used in trials and applications was greater (albeit only 3 days more than 2000) than in any of the last five years, with the exception of 2003 during which our resources were very severely stretched.

Commercial Court

Admiralty Court

Since 1 October 2004 the Court has usually had available nine judges to sit at any one time. This very welcome increase in our strength was a response to the particular demands made by the proportionate rise in the number of very long trials being heard by the Court but has already been instrumental in keeping our lead times within targets which both we and our commercial users regard as reasonable. Without this complement of nine judges the Court could not maintain the current workload and the service it provides to its users. One sometimes overlooked aspect is that an increase in the complement of judges sitting in the Court is directly reflected by an increase in the speed with which judgments can be produced.

30. 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 and the Listing Office

31. The Court is dependent on the very close working relationship it enjoys with the Registry and the Listing Office which operate under the overall management of Keith Houghton. A list of the staff is at Appendix 1.
32. The Registry, under the leadership of Rod Morgan, continues to provide essential assistance to the Court and the profession in relation to the new Rules, Guide and Forms and the constant revisions thereto, and in managing the numerous paper applications made to the Court.
33. The operation of the Listing Office is key to the smooth operation of the Court and the disposal of its work, and it has continued to operate with conspicuous success under Angela Hodgson and her team.
34. Within the Registry 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 that 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 40 below is operational, then they will be relieved of this outmoded and unnecessary burden.
35. At the end of the year the Registry and the Listing Office relocated to new premises in the basement of the East Block of the RCJ. This has resulted in an undoubted improvement to the area used by those who attend to list cases, a source of complaint and dissatisfaction in the past not least because the staff were concerned at the difficulty in preserving the confidentiality of material on their desks. These concerns have now been completely allayed although unfortunately at the partial expense of the Registry who have more rational storage space but less actual working space than before.

The Users' Committees

36. The two Users' Committees have been very supportive of their respective courts and continue to provide an invaluable forum to discuss issues relating to the work of the courts, to assist their development through working parties to obtain feedback and as a medium through which informed representations can be made to Government and other bodies concerned with the administration of justice. 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 most recent important contribution of the Users' Committees has been to produce an authoritative report on the problems thrown up by the need to disclose electronically created and stored documents. This report persuaded the DCA and the Deputy Head of Civil Justice to agree to an immediate revision of the Commercial Court Guide to give guidance in relation to this crucial topic and has given impetus to the expected rule change to reflect the need to define more clearly what is meant by a 'document.'

The Commercial Court Project: accommodation

37. The history of the project, which covers both the Admiralty and Commercial Courts, was summarised in the report for 2002. 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.
38. The task of pressing for new accommodation continued to receive strong support during the year from the Bar and the solicitors (both individually and through their professional associations) and the City. The Lord Mayor, Robert Finch, like his predecessor 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. 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.
39. 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 complex. Work on this continued throughout the year, culminating in the submission of detailed proposals to Government in the Summer of 2004. A final decision is now awaited.

The Commercial Court Project: IT

40. The Commercial Court IT Project will deliver an integrated case management system including E-file, E-diary and E-listing. Although the scope of the Project does not include the filing of documents by the parties straight into the E-file, the system will have the capability to provide this function in the future. With further development and enhancement both remote and public access to the system will be possible. The judges of the Commercial Court have been pressing the DCA for modern IT support for the Court for some years. It is hoped that the IT Project will deliver an integrated case management system in the course of 2005. The judges wish to acknowledge the very considerable assistance in relation to the Project which has been provided by a number of partners in leading city firms (and their IT specialists). To date this is the only project of its type in the Civil and Family Justice system. Modern IT support for the Court is long overdue.

Visitors and assistance to other countries

41. In October 2003, two members of the Court attended the second conference of EU Commercial Court Judges.
42. During the year, the Court received a number of visitors, including Judges from China, the Czech Republic, Ghana, Japan and Uganda.
43. 43.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 and to assist in the development of courts overseas. In particular, Mr Justice Colman took part in a symposium in Russia on judicial encouragement of pre-trial settlement organised by the Council of Europe for Russian commercial judges.

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 and Co
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
- Position vacant; until further notice contact the Admiralty Marshal