CJR – lessons learned so far:
a sharing of experience
Eric TM Cheung
Assistant Professor,
Faculty of Law, HKU
7 May 2010
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Agenda
• Some highlights of views expressed in the
recent CJR International Conference jointly
organised by HKU and UCL on 15 and 16
April 2010 (CJR: What Has It Achieved?)
• Sharing of experience and discussion
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Highlights of CJR Conference:
CJR: What Has it Achieved?
• Highlights of speech of Lord Neuberger (new
Master of the Rolls as from 1 Oct 2009; NPJ of
our CFA)
• Woolf’s new approach to civil justice: overriding
objective embedded with a commitment to
proportionality and proportionate costs in the civil
justice system
• Overriding objective not new: pre-Woolf RSC’s
implicit overriding objective: “to ensure that a
decision on the merits, or substantive justice, was
arrived at within any single piece of litigation”
(quoting Dr Sorabji from his article in (24) CJQ
(2005) 414
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• Other 4 principles (equality principle,
expense principle, expedition principle and
the efficiency principle) also not new
• Lord Clarke MR: “… Our civil justice system
has always been committed to ensuring
justice is achieved economically, efficiently,
in a timely fashion, and through the
application of equality of arms. There was
nothing novel there… No, the significant
difference between the Woolf reforms and
what had gone before was the commitment to
the proportionality principle.” (Proportionate
Costs from Woolf to Jackson, 10 July 2009)
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• Hence, parties are no longer automatically allowed
to pursue claim at whatever costs are reasonably
necessary to achieve substantive justice in that
case irrespective of proportionality and the
consequences for other litigants.
• Case tracks system: Low value claims to be
matched to a speedy and inexpensive process
while high claims matched to a more complex and
expensive process.
• In an extreme case, substantive justice might be
denied in its entirety, as pointed out by Lord
Hoffmann in Sutradhar v Natural Environment
Research Council [2006] 4 All ER 490 HL at [42].
• Lord Hoffmann at [42]: The overriding objectives of
the CPR include achieving justice for both claimants
and defendants and saving time and expense. These
objectives sometimes conflict and compromises are
required. It is not the case that the administration of
justice, alone among the services provided by the state,
is exempt from any considerations of cost. It is
obvious that a trial of this action…would be an
enormous and expensive undertaking. …the costs
incurred in these proceedings by the claimant and
other residents of Bangladesh who wish to bring
similar actions, at the expense of United Kingdom
public funds, already exceed £380,000… But when
one considers the scale and cost of a trial, the case for
stopping the proceedings now appears to me to be
overwhelming.
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• Note: The Court considered
proportionality not simply as between
the parties but as between the parties
and other litigants’ and the justice
system as a whole, which might justify
bringing a relatively weak claim to an
end without a substantive judgment at
trial
• Main Concern: Woolf’s overriding
objective with the commitment to
proportionality has downgraded the
English civil justice system’s
commitment to the achievement of
substantive justice, or justice on the
merits in a particular case.
• UK new approach should be understood
in the context of the unpalatable truth
that only limited public resources are
available for civil justice in the UK
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• Prof Dame Hazel Genn: Increased costs in
criminal justice: Crime control agenda (more
criminalization, more enforcement, more
defendants, more incarceration); HRA 1998
due process protection; more professional
defence lawyers; increased cost of criminal
legal aid
• Civil justice in decline: Fixed justice budget
and so no new money.
• Civil process not protected by HRA
• No votes in civil justice, no supporters
• Civil justice undefended
• HK CJR approach
• Concern raised to CJ’s Working Party’s
Interim CJR Report that if a Woolf-style
overriding objective was introduced into
Hong Kong, it “might divert the court from
deciding cases in accordance with their
substantive merits” (see Final CJR Report at
46-49)
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• Concern accepted => HK only had
underlying objectives subject to the explicit
caveat that “the Court shall always
recognise that the primary aim in exercising
the powers of the Court is to secure the just
resolution of disputes in accordance with
the substantive rights of the parties” (O 1A r
2(2))
• My observation: This fundamental
difference seems to have been overlooked
by some judges and practitioners when
citing or applying English CJR cases and
practices
• Lord Neuberger's other observations:
• Woolf proposals suffered from a lack of statistically
meaningful evidence, and were based on “impression,
anecdotal evidence, common sense, judicial experience
and foreign example.”
• “But impression can be a euphemism for preconception;
anecdotal evidence is often merely listening to the loudest
shouters; common sense can equate to prejudice; judicial
experience is by no means representative of the great run
of cases – not least as the great majority settle; and what
works in one jurisdiction doesn’t always transfer easily to
another, with its different traditions and practices. And
none of these compare in value with hard statistical
evidence. Further, if there is no statistical evidence, how
can you fairly and reliably assess the success of the
reforms?”
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• We should be cautious before making changes.
• “Modifications in civil procedure... cause
uncertainty and expense, while the
consequences are worked out [i.e. While those
changes are litigated and decided by the
courts]. So, however beneficial a change may
be in the long run, it must be right to take into
account the uncertainties and expense which
will be suffered in the short, even the medium
term.”
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• Jackson LJ’s recent Review of Civil Litigation Costs in
England and Wales (commenced on 1/1/2009 with a final
report produced on 14/1/2010)
• Evidence based review
• Evidence shows that litigation costs after Woolf reform go
up rather than down
• Identified the conditional fee agreement (CFA) regime
(with success fee and After the Event Insurance premiums
recoverable from losing party) as the largest single cause
of disproportionate costs.
• [2.20] “First, claimant costs are substantially higher than
defendant costs. Secondly, claimant costs in CFA cases are
substantially higher than in non-CFA cases. …claimant
costs in the CFA cases…range between 158% and 203% of
the damages awarded. Claimant costs in the non-CFA
cases…range between 47% and 55% of the damages
awarded.”
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Highlights of Prof Genn’s Speech
• Correct starting point: Civil justice is a public good
• Civil justice system contributes quietly and
significantly to social well-being: Supports economic
activity; Protects the weak; Controls exercise of
executive power in democracies governed by the rule
of law; Underpins sense of orderly society with
rights that can be made good
• Ability to participate in redress systems is a measure
of the health of democracies
• See two slides below taken from Prof Genn’s
PowerPoint:
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Adjudication
The Reality of
the Dispute
Resolution
Iceberg
Legal problems/
disputes
Judicial
determination
provides framework for
settlement in common law
system
Settlements take
place in shadow of
adjudicated cases
Lessons learned on Mediation in UK
• High level of satisfaction among volunteers, but
litigants do not like to be forced into mediation
• Successful mediation reduces costs, but
unsuccessful one may increase costs
• Principal motivation for mediating is to avoid
anticipated cost, delay and discomfort of trial
• Not about positive potential of mediation for
reconciliation, creative settlements or “harmony”
• More recently, motivation is the desire to avoid
risk of Dunnett v Railtrack cost penalties
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• Increased pressure to mediate appears to
lower settlement rates: parties may just
go through the motions to avoid costs
penalty
• Most settlements involve simply
transfer of money – minority are
creative
• Claimant makes significant discount in
mediated settlement including small
claims
Danger
• Woolf Report anti-adjudication/anti-lawyer
rhetoric repeated around the world
• Opinion leaders co-opted by emerging
profession seeking a market
• Promotion of ADR as a central solution to
the problems of civil justice
• Presentation of legal disputes as private
problems
• Conceived judicial determination as failure
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• Focus on ADR diverts attention from need
for accessible adjudication system
• Civil justice system associated with private
resolution rather than as a public good
• Public losing confidence in judicial
determination system
Highlights of HK Judiciary’s views
• Ma CJHC: Judiciary is compiling data to measure
the effectiveness of CJR objectively
• Li CJ: HK Judiciary is not suffering from
insufficient resources => reducing cases and court
workload is not an objective of CJR (and of
promoting mediation in particular)
• Registrar Au-yeung: Affordability and costseffectiveness can be reflected by how well CJR
can improve the efficiency of the proceedings and
eliminate delays.
• Hence: Focus on specific CJR measures to reduce
steps and hence costs in litigation
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• These include:
– Measures in the pleadings stage (O 13A admission;
SOT reduces substantial amendments to pleadings);
– Control over time extensions (use of unless order
as the norm);
– Control over interlocutory applications (cut down
call-over hearings and use of summary assessment);
– Case management;
– Encouragement of Mediation;
– Measures in taxation (simplified format of taxation
bills; use of paper taxation).
– Sanctioned offers and payments
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• Reyes J: Fostering dispute resolution and costs
effectiveness through case management
• In a Case management Conference, Court and
parties should try to achieve:
• (1) Identifying the issues in dispute
• (2) Mapping the steps which have to be taken to
resolve the dispute
• (3) Working out a timetable for the steps to be
taken
• (4) Considering whether in conjunction with that
timetable mediation might be attempted
• Reyes J: Admitted to be a convert of mediation
• “Much still needs to be done in terms of promoting
mediation in Hong Kong to bring about a culture where
mediation is attempted as a matter of course in most
cases at the earliest opportunity.”
• Court imposing costs sanction for refusing to attempt
mediation: no difference in principle from imposing
sanctions for failure to beat payment into court or
Calderbank offer, as court should encourage settlement
• My comments: One can measure objectively whether a
winning party obtains a better result by insisting on trial
instead of accepting a PIC. Court does not impose costs
sanction for a party’s refusal to negotiate settlement.
Why should court penalise a party for not trying one of
the means to achieve settlement, but who insists on court
performing its primary role to resolve justly a dispute
according to the parties' substantive rights?
• Lam J: mediation in the context of CJR and the
role of the judiciary
• Benchmark for assessment: not on number of
cases settled by mediation, but on change of
mindsets of litigants and lawyers from adversarial
approach to collaborative approach
• Why should a judge be involved?: proactive case
management under O 1A R 4(2); unique position
to give impartial view on proportionality and
appropriateness of mediation; civil litigation only
one of the means to resolve dispute
• Preparation of Mediation Certificate: Solicitors needs
to exercise his mind on the option of mediation before
he advises his client on its pros and cons; client goes
through an education process on mediation
• Mediation briefing: voluntary mediation briefing by
Masters; information sessions by Mediation
Information Office and Mediation Co-ordinator’s
offices
• Role of judiciary: costs sanction only secondary;
primary goal is to facilitate the parties to understand
the option of mediation and to make an informed
decision
• My query: In practice, is the judiciary giving a
balanced view on the pros and cons of mediation and
allow the parties to make an informed decision?
Highlights of Practitioners’ views
• Martin Rogers:
• What has been working well:
• SOT for pleadings; tighter control of
pleading timetable; more vigorous scrutiny
of applications to amend pleadings;
• less late applications shortly before trial;
• tighter control over deployment of expert;
• less appeals against interlocutory decisions
• Not working well:
• court scheduling (citing examples of waiting for 4 to 8
months to get a date for CMC, hearing for a leave
application for appeal, and for striking out part of a
pleading);
• case management (not many firms handle CMC well
and judiciary not robust enough to ensure compliance);
• mediation (unclear intention stated as to whether to
mediate; pushing for mediation even if there is no real
prospect of success; lack of recognition of the need to
ensure impartiality of the mediator in the appointment
process)
• Judiciary should compile useful statistics of what is
actually happening in the courts and be transparent in
disclosing their concerns as to where the system is not
working well.
• Other views expressed:
• It cannot be cost-effective to have legal representation to
pursue a claim of less than $200,000 or $300,000.
Should Small Claims Tribunal’s jurisdiction be further
increased to, say, $250,000 (or have a concurrent
jurisdiction with DC for claim between $50,000 and
$250,000)?
• Not enough has been done to deal with e-discovery
• Should HK follow the recent Australian practice to have
experts giving concurrent evidence at trial (let the
experts deal with each other’s queries/comments direct,
and discuss together)?
• Normally get less upon summary assessment of costs
than on taxation (my observation: should lawyers ask for
provisional summary assessment instead?)
• Very few practitioners follow the PD and serve the costs
estimate together with the skeleton arguments
General Issues for Discussion
• Any significant change to the litigation mindset
and culture?
• Are lawyers ready for advising and dealing with
mediation?
• Is the court pushing too far/little on mediation?
• Will Honey Moon period be over and will the
court be more robust to ensure due compliance?
• Any saving of costs, delay, and complexity?
• Is litigation now more affordable and costeffective?
• How well do the new CJR rules operate on
unrepresented litigants?
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