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.
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.
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
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.
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.