Report No. 188
Scotland has been having a 'Commercial Court' at Edinburgh for a long time. The initial background is that the Court of Session has had special provisions for dealing with commercial actions for many years. The present much-revised arrangements have been operating since Sept. 1994.
In broad terms, their purpose is to enable specialist Judges to handle commercial cases quickly and flexibly. The relevant Rules and Practice Notes for commercial actions are available in the above mentioned website.
The definition of 'commercial action' is broad and so a wide range of cases may be dealt with under those arrangements. Broadly speaking, they include any transaction or dispute of a commercial or business nature. Examples are banking and insurance transactions, contracts for the sale or supply of goods or services (national or international) and commercial cases. The Court also deals with disputes about building contracts, partnership agreements and business property. The Commercial Court at Edinburgh has three specialist Judges. The full time commercial Judge is Lord Mac Fadyen and there are two part time commercial judges, Lord Eassie and Lord Clarke.
The preliminary stage of a commercial case is as follows. The case is initially allocated to one of the three judges. In general, that judge will be responsible for overseeing the progress of the case and for deciding it at first instance. If a change has to be made, the case will be transferred to another commercial judge. Very soon after its allocation to the particular judge, the action will be brought before him for a preliminary hearing. The purpose of that hearing is to take stock of the dispute and to choose what appears to be the best means of resolving it.
Sometimes, as a result of prelitigation discussion or otherwise, the features of the dispute are already well-defined and, with only a little preliminary treatment, the case can be sent for adjudication where the dispute is on a point of law, such as the interpretation of a contract, and the Court may be able to decide it without hearing evidence. When there is a dispute on facts, the Court may quickly order a hearing of evidence. More commonly, it will be necessary to hold a number of preliminary or similar hearings before the issues are sufficiently focused to allow the case to be sent for debate or the hearing of evidence.
At all those preliminary stages, the Judge will take an active part in the discussion. His intervention may help parties to narrow the gap between them and lead to an early settlement. In other cases, some important issue or issues may be singled out from the rest and dealt with separately in the hope that, by resolving that point, the court will help to resolve the whole dispute. The Court may ask a technical expert to decide, or express a view on some technical aspect of a case. For example, the Court might send a question of valuation in a building-contract dispute to a quantity surveyor for that purpose. Conversely, parties in an arbitration conducted by a nonlegal arbitrator may ask a commercial judge to decide a legal point which has arisen.
The preliminary stages are essentially informal and have the character more of a chaired discussion than of a formal court hearing. Consistently with that, neither the Judge nor the parties' representatives wear formal court-dress at those hearings.
Pleading the case is the next stage. While written pleadings (summons and defences) remain the primary method by which parties set out their cases, the commercial judges encourage the use of alternative techniques. The key-note is flexibility. Where a case, or part of it, has been formulated in a pre-litigation document (such as in a claim document in a building dispute), the judge may be content to use it, with only a minimal amount of written pleading. Likewise, expert reports are commonly referred to without any requirement to translate them into "lawyer's language". Computer generated spreadsheets have been used successfully to set out complicated matters in detail, as in disputes between landlords and tenants over the state of repair of a building.
As to the stage of the decision, the commercial judges insist on frank and early disclosure of relevant (but only relevant) documents. This helps to identify the strengths and weaknesses of the respective positions and facilitates settlements. When the case proceeds to a full hearing, that hearing is more formal. Detailed legal argument will be presented or evidence heard from witnesses. The emphasis, however, remains on efficient and expeditious disposal. Parties are encouraged to agree (on) matters which are non-contentious and to deal contentious matters without undue elaboration.
Information technology is an important feature of the arrangements for commercial actions. The judge's court-diaries are available on a computer in the courtroom. Accordingly, when it is necessary to fix a further hearing, the date and time of the hearing can be fixed there and then. The computer is also used in framing court orders and in other ways to improve the speed and quality of information available. Most documents required during the course of an action can be e-mailed to the commercial court using e-mail address firstname.lastname@example.org. Interlocutory orders, once signed, are e-mailed to the solicitors for the parties.
A Consultative Committee on commercial action is constituted consisting of commercial judges, representatives of the legal profession and representatives from commerce and industry. The court encourages the free flow of information also and of views between the Court and the business community about the practical operation of the commercial court.