With the effects of the COVID-19 outbreak taking hold on nearly all aspects of day-to-day life, what does this mean for the continued operation of the judicial system, and more specifically any court proceedings that businesses may be involved in or contemplating?
Where proceedings are already on foot, businesses may have dates fixed for upcoming hearings and will be eager to know, for example, whether and how these are likely to proceed, how key participants (witnesses, experts, counsel and even judges themselves) will be able to take part, and in what format hearing bundles are expected to be prepared. Where there is no trial or other hearing imminent, parties may still want to know what impact there will be on the day-to-day running of the case, including the implications for deadlines.
One impact of the current uncertainty is that many businesses and their counterparties are exploring their options and rights in relation to their contractual arrangements, and may be looking to trigger force majeure or MAC clauses, or may be at risk of imminent default. They will therefore be particularly concerned as to the impact of any closure of court offices or delay to court business, including on their ability to seek urgent relief. Access to the courts is likewise critical for those businesses experiencing acute financial distress and contemplating some kind of insolvency procedure.
Events continue to move very quickly - in relation to court procedures as in many other areas. We are closely monitoring communications coming from the judiciary and the court service, which are evolving as the situation develops. Below we summarise where things appear to stand at the moment.
Operation of the Courts
An early indication of the judiciary’s approach, including their commitment to continuing the work of the courts as a vital public service, was provided on 19 March in the form of a message from the Lord Chief Justice to judges in the Civil and Family Courts. Key points from the Lord Chief Justice’s message included:
- The default position now must be that hearings should be conducted with some or all participants attending remotely, where that is possible. Court rules are flexible enough to enable telephone and video hearings of “almost everything”, and any legal impediments will be dealt with.
- The courts service is working urgently on expanding the availability of technology, but in the meantime the courts will make use of phones, video facilities and Skype.
- Many more procedural matters may be resolved on paper within the rules.
- The courts will have to use technology to conduct business which previously would have been “unthinkable”, including final hearings and hearings with contested evidence, as otherwise “there will be no hearings and access to justice will become a mirage”.
- If too much court business is adjourned there will be inevitable backlogs and delays which will build to an intolerable level. Judges are urged, before agreeing to adjourn any hearing, to use available time to explore with the parties the possibility for compromise.
- However, it may be difficult to maintain trials and final hearings in the short term, not least because of the inability of people to participate. As events develop, individual decisions on priorities and practicalities will have to be made. The message is to do what can be done safely.
- Some types of application are likely to be urgent and may be unsuitable for telephone hearing (such as applications relating to injunctions and committal). Arrangements will be needed to hear them safely.
What is clear is that very few, if any, hearings in civil cases are being held face-to-face. The courts service has also set up a new web page, providing a daily summary of the courts’ operational position during the pandemic, which as of 6 April 2020 states that the courts are “continuing to avoid physical hearings and arranging remote hearings wherever possible” (see below).
The web page currently states that the High Court is now covering work according to a “High Court Contingency Plan”, by which non-urgent business will continue to be dealt with, although urgent business will be given priority. This is a welcome development on earlier updates which had indicated that the High Court was only covering urgent work, though in practice more hearings seemed to be taking place than that suggested. That being said, the Court of Appeal continues to cover only urgent work (meaning only applications where it is essential in the interests of justice that there be a substantive decision with the next 7 days). A new temporary insolvency practice direction, which came into force on 6 April 2020, also has the effect of adjourning all applications, petitions and claim forms listed for hearing prior to 21 April 2020, with the court’s resources being preserved for “genuinely urgent applications”.
It is of course understandable that the courts will be prioritising more urgent matters in the current circumstances, but it is hoped that ordinary business is not allowed to grind to a halt, in the Court of Appeal and elsewhere, during what could be a significant period of disruption caused by the pandemic. This would lead to an obvious risk of backlog and delay once more normal conditions resume.
In the weeks since the Lord Chief Justice’s message, we are aware of a number of cases in which arrangements have been made for trials or other hearings to be conducted by telephone or video, and have participated in a number of hearings conducted in this way. So the judiciary is clearly on board with this necessary change of approach.
To facilitate the move to remote hearings, a new Practice Direction (PD) 51Y was introduced on 25 March, with immediate effect, in relation to video or audio hearings during the Coronavirus pandemic. The changes are to:
- Clarify that the court can direct that a remote hearing be held in private if it is not practicable to broadcast the hearing simultaneously in a court building and it is “necessary to do so to secure the proper administration of justice”. This is in addition to the power to direct a private hearing under CPR 39.2.
- Confirm that a direction for a private hearing may not be made under the above provision “where a media representative is able to access proceedings remotely while they are taking place”. Where a media representative does access the proceedings remotely, it will be considered a hearing held in public.
- Clarify that the court must direct that a remote hearing held in private be audio recorded, where that is practicable, and may also direct that it be video recorded.
- Provide for the public to have access to such recordings, with the court’s permission.
The courts service has also published new guidance on telephone and video hearings and a new protocol regarding remote hearings applying to hearings of all kinds, including trials, applications and those in which litigants in person are involved, in the County Court, High Court and Court of Appeal (Civil Division). The temporary insolvency practice direction (see above) also provides for insolvency hearings to proceed remotely.
The Coronavirus Act 2020 also includes measures to allow video and audio hearings to be broadcast to the public, in the interests of continuing to promote the important principle of open justice. It also includes provisions allowing the court to direct that such proceedings be recorded, and banning the unauthorised (video or audio) recording or transmission of such proceedings.
In an early example of such measures being put into practice, in the trial in National Bank of Kazakhstan v Bank of New York Mellon, with open justice in mind, the first day’s proceedings were broadcast to a screen in the courtroom, but for the second day onwards (once the Coronavirus Act had been passed) a publically accessible livestream was made available over the internet. Daily transcripts were also posted on the claimants’ solicitors’ website,
Hearings on paper?
Despite the Lord Chief Justice’s message that there may be scope for resolving procedural matters on paper, it seems, however, there are limits to the courts’ willingness to move to determining matters on the papers.
In a recent Chancery case, Conversant Wireless Licensing SARL v Huawei Technologies Co Ltd (Judge Hacon, 25 March 2020), the court rejected the claimant’s legal team’s suggestion that a trial concerning FRAND licences could be conducted largely on the papers, with brief Skype hearings only for the purpose of dealing with any questions the judge had after reviewing written submissions and evidence.
Although the legal team was “commended” for suggesting an alternative way forward, the judge said that, at present, neither the CPR nor the Lord Chief Justice’s or Chancellor’s guidance permitted the trial to be conducted in that way. There were issues which required cross-examination, and significant costs were involved. Accordingly, the trial was adjourned, with the parties given permission to seek a new trial date on the first available date after 1 October 2020.
As for court filings, a number of court counters have been closed, but most documents are filed using the online CE-file system in any event so physical attendance at court is not ordinarily necessary. Court users are being told to expect delays in the CE-file system due to a reduced workforce, but that should not affect limitation issues as claim forms are issued as at the date they are received onto the system.
Provisions for court bundles to be lodged electronically have also been introduced. The new protocol on remote hearings (discussed above) contains directions on the contents of electronic bundles, and more specific guidance has been issued for hearings in the Commercial Court and Queen’s Bench Division of the High Court.
Extensions of Time
The courts have also shown increased flexibility regarding court deadlines, in light of potential difficulties arising from the COVID-19 outbreak. As an early indication of this, one counsel’s chambers published an update regarding what they referred to as the first “Covid-19 Direction”. In that case, the court granted an order doubling the period for which the parties can agree extensions to procedural deadlines without further order from the court (to 56 days, up from 28 days under CPR 3.8(4)).
The position has since been formalised by the introduction of a new Practice Direction (PD) 51ZA on 2 April, with immediate effect. It is designed to introduce additional flexibility for parties to agree extensions of time where their ability to comply with deadlines is affected by the COVID-19 pandemic, and to ensure that the court takes into account the impact of the pandemic when considering whether to grant an application for an extension. Broadly:
- Under the new provisions, parties can extend time by written agreement for up to 56 days, rather than 28 days as was the position previously. Any extension beyond 56 days will require the court’s permission, which will be considered on the papers (though an order made on the papers must, on application, be reconsidered at a hearing).
- It also provides: “In so far as compatible with the proper administration of justice, the court will take into account the impact of the COVID-19 pandemic when considering applications for the extension of time for compliance with directions, the adjournment of hearings, and applications for relief from sanctions.”
The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2020