1. Hearings and trials
With the prospect of lockdowns, social distancing, and widespread self-isolation, the Covid-19 pandemic brought with it huge uncertainty as to the operation of the courts in England and Wales. Thankfully, both the judicial system and the wider legal profession have been quick to adapt.
Among the key shifts has been the embrace of new technology, with the Courts Service bringing forward remote hearings which it had been considering for several years. Despite early teething problems and reports of technical difficulties, remote hearings may yet prove to be a permanent fixture, helping to save time and making travel to court a thing of the past.
However, the new landscape is not without its drawbacks. Concerns raised by critics, including some judges, have centred on the role of witness evidence in remote hearings. Some consider that witnesses may feel less inclined to tell the truth than they would in a physical court, whereas others have highlighted the loss of ability to observe body language as undermining the capacity of judges to determine the truthfulness of witnesses.
Meanwhile, some argue that the learning environment and professional opportunities which have traditionally been embedded in the court system are being lost – possibly to the detriment of the development of junior legal staff.
2. Jurisdiction
The Lord Chancellor’s Advisory Committee has issued new rules on serving claim forms out of jurisdiction in English courts. The Civil Procedure (Amendment) Rules 2021 (SI 117/2021) implemented those changes which came into effect on 6 April 2021. There is now a new wording provided under CPR 6.33 (2B) which reads as follows:
2B) The Claimant may serve the claim form on a defendant outside the United Kingdom where, for each claim made against the Defendant to be served and included in the claim form —
a) The Court has power to determine that claim under the 2005 Hague Convention and the Defendant is a party to an exclusive choice of court agreement conferring jurisdiction on that court within the meaning of Article 3 of the 2005 Hague Convention; or
b) A contract contains a term to the effect that the court shall have jurisdiction to determine that claim.
These changes are definitely a positive step, helping to reduce the costs for parties who opt for the English Courts as the forum of dispute resolution.
Those wanting to understand how the reforms might impact them and the advantages an exclusive English jurisdiction clause should now have their terms and conditions reviewed. This is a service which Blaser Mills Law can offer.
3. Alternative Dispute Resolution/Mediation: not so “alternative”!
The Master of the Rolls, Sir Geoffrey Vos, has revealed that compulsory mediation is being discussed as a way of keeping more disputes out of court.
While admitting the idea of compulsion was “highly controversial”, Sir Geoffrey said the Civil Justice Council, which he chairs, is looking at the extent to which litigants should be forced to mediate – and if so, in what circumstances. The sub-group’s report on the issue will be available shortly.
Sir Geoffrey suggested that the legal profession should stop referring to mediation as “alternative”, and that it should be “part and parcel” of resolving all disputes, whether they are between businesses and consumers, amongst families or between the citizen and the state.
4. Court fee increases
Despite widespread, opposition, court fees were increased from 30 September 2021 in line with inflation. The increases apply to 67 fees within the Civil Proceedings Fees Order 2008 No 1053, with those fees considered to have been set below the estimated cost of the service being targeted.
5. The Corporate Insolvency and Governance Act (CIGA) 2020
CIGA 2020 was a key pillar of the UK government’s strategy to protect the viability of businesses during the pandemic. It introduced a range of temporary measures including:
- The suspension of directors’ liability for wrongful trading (including trading whilst insolvent);
- Restrictions on winding-up petitions where the financial hardship was due to the pandemic; and
- Restrictions on landlords taking recovery action for commercial rental arrears.
The state of play with regards to the above is now mixed. While the suspension of directors’ liability for wrongful trading came to an end on 30 June 2021, restrictions on winding-up petitions will be phased out from 1 October 2021 until 31 March 2022. Meanwhile, the restrictions on landlords taking recovery action have been extended to March 2022.
6. Insolvency Service
Under new proposals, the Insolvency Service will be given powers to investigate directors of companies that have been dissolved, acting as a strong deterrent against the misuse of the dissolution process. The extension of the power to investigate also includes relevant sanctions, such as disqualification from acting as a company director for a period of time. The measures, which are contained in the Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill, will be retrospective.
Extending the disqualification regime to former directors of dissolved companies should also act as deterrent against using the dissolution process as a method of fraudulently avoiding repayment of Government backed loans to businesses made during the pandemic. This includes loans made under the Bounce Back Loans Scheme and represents part of the package of measures designed to combat Bounce Back Loan fraud, announced by the Chancellor in the March 2021 Budget.
7. ‘Breathing Space’ from 4 May 2021
Under a new government scheme, those with problem debt will be given access to professional advice and a potentially vital 60 days of “breathing space” with which to find an appropriate solution for their circumstances. Large numbers of people across England and Wales who are struggling to repay their debts could be eligible for the scheme, with the Government expecting up to 700,000 to benefit in the first year. 11,500 submissions have already made been made according to the Insolvency Service.
8. New IVA Protocol
A new version of the IVA protocol has been published. Insolvency practitioners who administer IVAs are being given advance warning of the updated protocol so that they can update their systems and procedures, as well as train their staff. IVAs drafted to be compliant with the 2016 protocol will no longer be proposed to creditors after 21 July 2021.
A protocol consumer IVA can last any length of time, however most IVAs will be proposed for 60 or 72 months.
A person suitable for a protocol consumer IVA is likely to:
- Be in receipt of a regular sustainable income; for example, but not limited to, from employment or a regular pension.
- Have several lines of credit or types of debt.
- Have uncomplicated assets.
9. Witness Statements
New guidance has been issued for the drafting of witness statements. Typically it is a lawyer who will draft a witness statement, often resulting in the adoption of technical terms and ‘legal speak’ which is clearly not the drafting of the individual. Under the new guidance it is the words of the witness which should now be heard, free of formalised language.
Practice Direction PD57AC seeks to promote and enforce best practice on the preparation of witness statements. It will apply to witness statements for use at trials in the Business and Property Courts, specifically to claims issued after 6 April 2021 or to existing proceedings where the witness statements for trial are signed on or after 6 April 2021.
10. A new ‘Consumer Duty’ for FCA-regulated firms
The Financial Conduct Authority (FCA) announced on 14 May 2021 plans for a new ‘Consumer Duty’ which will set a higher level of consumer protection in retail financial markets for firms to adhere to.
In accordance with the FCA rules and principles, firms are currently required to treat customers fairly and many firms are delivering the right outcomes (for example, around pricing and customer service).
However, in a press release the FCA have stated they continue to see evidence of practices which cause harm. There is concern that consumers lack confidence in the financial services industry, with only 35% respondents of one 2020 survey agreeing that firms are honest and transparent in their dealings with them.
11. Business Interruption Insurance
The Supreme Court delivered its judgment in the Financial Conduct Authority’s (FCA)’s business interruption insurance test case on 15 January 2021 (Financial Conduct Authority (Appellant) v Arch Insurance (UK) Ltd and others (Respondents) UKSC 2020/0177).
The court substantially allowed the FCA’s appeal on behalf of policyholders. This completes the legal process for impacted policies and means that many thousands of policyholders will now have their claims for coronavirus-related business interruption losses paid.
The judgment brings to an end legal arguments under 14 types of policy issued by six insurers, and a substantial number of similar policies in the wider market which will now lead to claims being successful. Each policy needs to be considered against the detailed judgment. Policyholders may be able to refer their claim to the Financial Ombudsman Service, whose role is to resolve individual disputes.