Transforming the justice system: likely reforms to insurance dispute resolution

Out-Law Analysis | 10 Nov 2016 | 3:48 pm | 4 min. read

FOCUS: Recent publications by the Ministry of Justice (MoJ) and the courts service emphasise the need to radically upgrade the court system in England and Wales in line with today's technology.

Although there is as yet no clear timetable for further consultations or implementation measures, a recent joint statement by three senior judges and related consultation establish a clear direction of travel for the future of the justice system. In particular, the consultation, which closed on 10 November, outlined some practical measures through which this ambitious vision might be delivered.

While the joint statement and consultation deal with specific measures for each of the criminal courts, civil courts, family courts and tribunals, it is those measures outlined for the civil courts that will be of most interest to insurers.

The planned measures, set out in detail in the MoJ consultation, include:

New online process for resolving claims

In this most radical development, the consultation describes how physical court resources in the civil courts at least will soon be reserved for "the most complex and difficult cases". All cases are expected to be commenced online, whether or not they are scheduled for the traditional system of resolution or for online resolution. Eventually, many routine disputes will be resolved completely online using innovative technology and specialist case officers.

This development relates directly to the recently completed Civil Courts Structure Review by Lord Justice Briggs and his final report, published in July 2016, in which he advocated for an online court. A new, streamlined Rules Committee will be created to design this new system, and to keep the processes simple.

Extending the fixed recoverable costs regime

The consultation confirms the intention to extend the fixed recoverable costs regime to as many civil cases as possible, and states that the senior judiciary will be developing proposals in due course to be consulted upon.

Fixed recoverable costs are legal costs which can be recovered from the losing side by the successful party to a claim, at a prescribed rate. Fixed costs currently only apply in personal injury claims valued up to £25,000, but senior judge Lord Justice Jackson recommended at the beginning of 2016 that every type of civil claim valued up to £250,000 should be subject to new restrictions.

The current measures for low value personal injury claims will now be built upon. The consultation notes that these measures provide transparency and certainty for all parties and are designed to ensure that the amount of legal work done is proportionate to the value of the claim.

Encouraging parties to resolve disputes themselves where possible

Signposting to mediation and alternative dispute resolution methods will be increased.

Civil enforcement

The High Court will be given powers to issue attachment of earnings orders to the High Court to create a simpler, more consistent approach to enforcement, and to make sure more people can get the money they are owed.

The fixed deductions scheme (fixed table) provisions in the 2007 Tribunals, Courts and Enforcement Act will also be commenced in the County Court and fixed tables will be introduced in the High Court, providing transparency and certainty over the rate of deductions from debtors' earnings in order to pay back their creditors.

Replacing statutory declarations in county court proceedings with a witness statement, verified by a statement of truth

Outdated and currently inconsistent procedures which are inconvenient for people to use, and resource-intensive to administer, will be replaced with a more modern digital approach. Strong penalties will be administered where a statement of truth is found to be false.

The driving force behind these publications - a desire to radically upgrade the court system in line with today's technology - is set out plainly in the concluding remarks to the 'Transforming our Justice System' joint statement. The Lord Chancellor, Lord Chief Justice and Senior President of Tribunals state:

"Our times – with the advent of the internet and an explosion in new technology – provide an opportunity for radical change. Traditional ways of working are being upended, not just in justice but across the board. To secure and enhance the global reputation of our justice system, therefore, we must respond to those changes radically and quickly - and the rapidly evolving needs and expectations of anyone who uses our courts and tribunals."

There is a strong sense that if the justice system does not take strong, decisive measures now to evolve in line with today's technology and meet the challenges that this presents, it is in danger of quickly stagnating, becoming complacent and losing its leading international position among justice systems worldwide.

The vision set out in the joint statement is high level and principles-based. Perhaps this itself reflects the daunting challenge of overhauling a firmly entrenched system. The three core guiding principles are described as being based on established strengths, and are that the system will be:

Just

This is further clarified in the foreword to the consultation as meaning a system where public confidence is maintained and the rule of law is strengthened because decisions and outcomes are fair; the judiciary is supported by processes that are modern, transparent and consistent; like cases are treated alike; and a strong judiciary and meritocratic legal professions draw on the widest available pool of talent.

Practical measures that are described in the consultation under this heading include:

  • making sure that there is an alternative route to justice for those that do not, or cannot, access online services;
  • ensuring the continuity of open justice, or the ability of the public to see and hear real-time hearings.

Proportionate

This is further clarified in the foreword to the consultation as meaning as system where people are saved time and money - and legal proceedings have less of an impact on their lives - because the cost, speed, complexity and degree of adversarial protection make sense and are appropriate to the nature and value of the dispute at issue.

Practical measures that are described in the consultation under this heading include:

  • more use of case officers for routine tasks;
  • more decisions made 'on the papers';
  • more virtual hearings;
  • more cases resolved out of court.

Accessible

This is further clarified in the foreword to the consultation as meaning a system that is intelligible and available for use by all; convenient for those who cannot easily attend in person; and supportive of those not comfortable with the law or technology.

Practical measures that are described in the consultation under this heading include:

  • putting probate applications online;
  • managing divorce online;
  • digitising applications for Lasting Powers of Attorney.

The joint statement describes the justice system of the future as one in which "more and more cases or parts of cases will be carried out virtually or online"; while noting that, in certain circumstances, justice will require real-time hearings in physical courtrooms. Still, the long-term intention for the UK court system is clear and unambiguous: justice is moving online.

Nick Bradley is an insurance law expert and Elaine Quinn is a Vario Consultant at Pinsent Masons, the law firm behind Out-Law.com.