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The Commercial Litigation Journal: November/December 2015

Maura McIntosh explores a recent judicial interpretation of Part 36

The High Court has held that an offer to settle was not a valid Part 36 offer since it related only to a claim put forward in draft amended particulars of claim: Hertel v Saunders [2015].

Teresa Rosen Peacocke investigates whether recent rule changes make US discovery more limited than UK disclosure

Civil litigation procedure has in some important respects developed differently in the US and the UK. One of the principal differences has been the availability in the US of expansive and seemingly unlimited discovery. However, this may soon no longer be the case. In fact, there is a possibility that disclosure in the UK will become (potentially) more expansive than discovery under US courts. This is due to the fact that amendments to the Federal Rules of Civil Procedure (FRCP), coming into effect in the US on 1 December 2015, will eliminate the discoverability of material ‘reasonably calculated to lead to the discovery of admissible evidence’, whereas the UK equivalent of this test – the Peruvian Guano test – is still provided for in certain specific circumstances in UK litigation.

Paul Joukador and Nathan Searle report on a landmark Supreme Court judgment

It is common practice to include a clause in a contract which specifies that predetermined compensation (commonly a sum of money or transfer of an asset) is due to the innocent party upon breach of the contract by another party. A key concern for these clauses is whether they are classified as liquidated damages, which are enforceable, or penalties, which are not. In these two cases the Supreme Court was asked to re-examine the long-standing rule against penalties to determine if it was fit for purpose and whether it should be extended or dispensed with entirely. The court decided not to abolish the rule, but it did confirm that the application of penalties is narrower than previously thought.

Anthony Gold

Adam Dyl takes stock of the implementation of costs reforms

It has been a few years now since Jackson LJ proposed reducing the costs in litigation by putting proportionality before whether those costs were reasonably or necessarily incurred. This article aims to explore what impact the new rules have had.

Daniela Vella examines the new Financial List: a ‘beacon’ for litigants?

In the second half of 2014 a group of judges from the Commercial Court and the Chancery Division, led by the Lord Chief Justice, Lord Thomas, invited a targeted pool of individuals drawn from various parts of the financial markets and legal industries, who had experience of litigation in the Rolls Building, to provide feedback on the potential for a swifter and more economical form of dispute resolution for financial markets disputes. In January 2015 a working group was formed to develop the ideas born out of these discussions into concrete proposals, and in April a joint consultation by the Commercial Court and the Chancery Division was published, proposing new procedural rules to establish a new specialist court list to handle court claims relating to financial markets – the Financial List – and inviting comments on the draft rules. Comments were gathered and reviewed, and the final Financial List rules were published in August and came into force on 1 October 2015. They comprise new civil procedure rules (CPR Part 63A), practice directions (PD 51M and PD 63AA), court forms and a new court guide.

David Niven and Elisabeth Mason look at aggregation clauses and the AIG Europe case

The High Court has ruled for the first time on the proper construction of the aggregation clause in the Solicitors Regulation Authority’s Minimum Terms and Conditions of Professional Indemnity Insurance (the MTC).

Gwendoline Davies and Andrew Beck review recent cases on freezing orders and provide some practical advice

A freezing order is an interim injunction which restrains a defendant or potential defendant from disposing of or dissipating assets. A freezing order is typically obtained by a claimant or potential claimant who wishes to ensure that a (potential) defendant’s assets remain available pending the enforcement of a court judgment. These orders are also known as Mareva injunctions, following Mareva Compania Naviera SA v International Bulkcarriers SA [1980], in which case such an order was first granted. The courts’ jurisdiction to grant a freezing injunction derives from s37 of the Senior Courts Act 1981 and Civil Procedure Rule (CPR) 25 and Practice Direction (PD) 25A.

David Sawtell summarises recent costs judgments

Costs budgeting is now a familiar part of the litigation landscape. Costs management hearings are supposed to be carried out quickly and with the application of a fairly broad brush. Only in exceptional cases do we see the court going through a Precedent H in granular detail. When that does take place, we begin to see how the courts are considering proportionality and reasonableness.

Clare Arthurs and Richard Marshall assess the value of early neutral evaluations

Litigation, the Pre-Action Practice Direction tells us, should be ‘a last resort’. That same PD states sternly that parties should consider the possibility of reaching a settlement at all times, including after proceedings have been started. It then lists several forms of alternative dispute resolution (ADR) which parties might consider. Among them (para 10(c)) is ‘early neutral evaluation, a third party giving an informed opinion on the dispute’.