The third revision of the second edition of the TCC Guide was published on the MOJ website on 1 May 2014. The first edition of the Guide since the Jackson reforms, it contains interesting and important changes from the second revision, published in October 2010.
Here are a few of my selected highlights for practitioners to watch out for.
Sanctions for non-compliance with the Guide
The tone of the new post-Jackson regime is set in paragraph 1.1.2, which notes that the Guide is “designed to ensure effective management of proceedings” and that the TCC will be “more ready” to impose sanctions for failure to comply with the Guide itself.
Paragraphs 1.3.1 and 1.3.6 reflect the decision in West Country Renovations v McDowell that, generally, cases with a value of less than £250,000 will not usually be accepted by the TCC in the High Court unless there is good reason so to do (the main exception being adjudication enforcement claims) and will be transferred to the County Court (paragraph 3.6.2).
This is a significant change from the second revision, where the threshold was £50,000.
Pre-action protocol exceptions extended
Two new exceptions to the need to comply with the Pre-Action Protocol for Construction and Engineering Disputes have been included:
- At paragraph 2.3.1(b), “to seek an urgent declaration or injunction in relation to adjudication (whether ongoing or concluded)”. This exception recognises the increasingly common practice of parties seeking injunctive relief (for example for want of jurisdiction) at the outset of the adjudication instead of reserving their position and resisting enforcement of the decision. A case in point is Twintec Ltd v Volkerfitzpatrick Ltd, from earlier this year.
- At paragraph 2.3.1(f), public procurement disputes.
New guidance has also been included that the Protocol stage “should not be drawn out” and, perhaps surprisingly, the Guide specifically notes that the pre-action meeting is not mandatory and may be dispensed with if it would involve disproportionate time and cost, or would not serve any useful purpose.
Electronic [not] working
In a development that seems at odds with the move to the use of new technology in litigation (and the TCC’s move to the Rolls Building), paragraph 3.8 notes that it is no longer possible to issue claims electronically in the TCC.
This procedure was possible when the TCC was in its old building at St. Dunstan’s House, but is not currently provided for in the new Rolls Building. It is understood that a new IT system for the Rolls Building is due by late 2015.
Section 5, dealing with costs, has undergone several important changes, including reference to:
- The need for parties to consider e-disclosure and use of the TeCSA e-disclosure protocol (which was developed in consultation with the TCC judges) (paragraph 5.1.1). Paragraph 11.2.3 states that, where necessary, this protocol is likely to be ordered if the parties have not agreed an alternative e-disclosure procedure by the time of the first CMC.
- Parties considering the use of an electronic document management system (paragraph 5.1.1). In paragraph 15.2.4 it is stated that parties are encouraged to use such systems in document-heavy cases during the trial; a step towards paperless trials perhaps?
- Costs Management Orders (CMOs) (paragraphs 5.1.1 and 5.4.1). The post-Jackson costs management regime is covered in detail in a new paragraph 16.3 (as discussed below).
- Detailed provisions for the drawing up of orders (paragraph 5.8). This is designed to address the practice of advocates debating the precise terms of an order handed down in court. It asks for any competing views to be set out neutrally for the judge to consider. Paragraph 5.8.2 notes that if the judge wants to hear submissions on the draft form of order, he will ask for those submissions. It also states that any party unreasonably refusing to agree terms of an order can expect to have costs orders made against them.
Menu of disclosure options included
Section 11 on disclosure contains significant changes reflecting the Jackson reforms to CPR 31. Standard disclosure is now merely one of a “menu” of disclosure options. Other options (in paragraph 11.1.2) include:
- No disclosure.
- Disclosure of documents on which each party relies and any specific disclosure requested by the other party.
- Disclosure on an issue-by-issue basis.
- An order that a party discloses documents that it is reasonable to suppose will support its case or damage that of another party.
Guidance from the second revision that, in many TCC cases, standard disclosure will not be appropriate given the volume of documentation involved is repeated and may now be adopted more frequently.
Costs management post-Jackson
The most significant development is a new paragraph 16.3 covering costs management, which implements the Jackson reforms and refers to the new Section II of CPR 3 (including CPR 3.12 to 3.18). New measures include:
- Each party is required to file a costs budget before the first CMC in the form of precedent H. The Guide notes the Court of Appeal’s judgment in Mitchell v News Group Newspapers that the “penalty for failure to serve a budget is draconian” (paragraph 16.3.3).
- Costs budgets are to be discussed between the parties and agreed if possible. Failing agreement, the court will make a CMO at the first CMC (paragraph 16.3.4). Counsel should prepare a summary of any differences between the parties for the CMC (paragraph 16.3.8).
- The Guide notes that once approved, the costs incurred at each stage will usually be recoverable on a detailed assessment, but that recovery will not be permitted if a party has overspent on a phase, even if there is an underspend on a different phase (paragraph 16.3.6). However, the budget can provide for contingencies, if an explanation is given (paragraph 16..3.7)
- A party can also apply to have its costs budget varied if there is good reason to do so (paragraph 16.3.8). The court will consider at the PTR any applications for review or variation of the costs budgets (paragraph 14.5.1).
The applicability of the costs management regime is subject to the exceptions referred to in paragraphs 5.1.1 and 16.3.9 of the Guide, that is, it applies to all TCC cases commenced after 22 April 2014 with a value below £10 million.
Since the last edition of the Guide in 2010, the CPR in England and Wales has undergone considerable change with a new, harsher approach to non-compliance with the rules. The revised Guide provides important clarification of the procedural steps in the TCC, and on the approach the TCC judges will take. It therefore makes for essential reading for all TCC users.