New Commercial Hub introduces a more efficient disputes system in Northern Ireland

The rules surrounding commercial disputes in Northern Ireland (NI) are going through a period of significant change. This principally involves the creation of a specialist court with new case management rules aimed at resolving cases more quickly and cost-effectively, as well as improving commercial clients’ general experience of the litigation process.

Background

NI is a comparatively small jurisdiction and yet that has not always been reflected in the efficiency of the court system, with many cases tending to move more slowly than they objectively ought to.

This was, for the most part, due to a combination of parties conducting cases to their own timelines, as well as a court that was generally amenable to allowing further time for compliance with deadlines, resulting in a culture of inefficiency and delay, with increased costs to clients.

With commercial cases, this inefficiency was evident through the drawn out and expensive process of periodic review hearings (akin to case management conferences in England and Wales), with some cases being reviewed more than twenty times.

Due to such inefficiencies, during the course of civil justice reforms in the rest of the UK in 2017, Lord Justice Gillen (who at the time was one of the Lords Justices of Appeal in NI) led a review of Civil and Family Justice in Northern Ireland with the expressed hope:

….not only to create a situation that chimes with the timescales and efficiencies that are emerging in England and Wales … but to create a scenario in which Northern Ireland, with all the advantages of a small jurisdiction and fewer cases, is at the leading edge of timely, efficient and cost-saving disposal of business cases that will attract the confidence of the business community.

Implementing the recommendations of this review has proven difficult in the absence of a devolved government. However, a new Practice Direction (which introduces many of Lord Justice Gillen’s suggestions for the commercial division) now places the onus on the courts and the participants to improve the efficiency of the system through a strict approach to case management.

Commercial Hub

The new Practice Direction, which came into effect on 29 April 2019, applies to all litigated commercial claims, including professional negligence actions, and creates a specialist commercial court, known as the ‘Commercial Hub’ (‘the Hub’).

Cases that fall within the Hub’s jurisdiction are now subject to three key case management stages, during which the parties are directed on key steps including timescales. Should parties fail to adhere to the timescales as set by the court, then cases can be dismissed and cost penalties imposed. It is hoped that this will eradicate the current culture of non-compliance.

In addition, the current Commercial Judge has made it clear that parties must proactively approach the court to request an extension if they anticipate failure to comply with timescales. Any failure to do so could lead to cost orders or a case being struck out.

Case management – three key stages

  1. Early Directions Hearing (EDH)

    Taking place within three weeks of the service of proceedings, the EDH allows the court to provide directions for the progress of the case through to trial.

    Parties are encouraged to agree a discovery plan in advance of the EDH. Notably, where one party insists upon full discovery, which later transpires to be of little benefit to the resolution of the case, that party may be ordered to pay the costs of providing that discovery, regardless of the substantive outcome of the case. Parties will therefore need to be ready to carry out early and accurate assessment of documentation relevant to the dispute.
  2. Case Management Conference (CMC)

    The CMC ensures the case is prepared for the most effective means of resolution, (whether that be trial or some form of alternative dispute resolution) and is likely to be of key strategic importance to the outcome of the case. It therefore has the potential to become contentious.

    Counsel, solicitor, and client are all required to attend. We anticipate that eventually solicitor and counsel attendance will suffice but at the outset, we advise client attendance until we come to know how strictly judges will adhere to this rule.
  3. Pre-Trial Review (PTR)

    The purpose of the PTR is to allow the court to ensure that the case is ready for trial. In some cases (i.e. if the case is ready for trial and no further court input is required) it will be dispensed with.


Costs

Cost sanctions for non-compliance with court directions are a key part of the changes to commercial litigation in NI. Where parties do not fall into line, costs orders are a possibility and we expect the Commercial Judge to make examples of those who do not comply. Whilst an initial period of grace has been provided to allow time to adjust, this is unlikely to continue into the new court term in September. Satellite costs disputes between parties are therefore likely to increase.

Comment

Overall, these are welcome changes for those who do business in NI. Historically, cases moved slowly and court directions were often treated as suggestions rather than compulsory steps.

As the pace of litigation increases, participants will need to become more nimble and have the capacity to consider the requirements of the Hub. This means sufficient time must be invested at the outset of the case to quickly identify the pertinent issues, the relevant documentation, and the optimal strategy to resolve the case in accordance with the new regime. Early investment of time should save overall costs by ensuring that parties are able to comply, which should ultimately conclude cases more quickly and cost effectively.