The Law Commission

APPENDIX B

VARIATION IN DISPOSAL TIMES

 

B1 In paragraph 4.14, we discuss how the use of compound interest rather than simple interest would have the greatest effect in the longest-running cases. For example, the total interest produced by a 7 per cent compound rate would exceed the interest produced by an 8 per cent simple rate after five years. After 10 years, it would produce one fifth more in interest. It is therefore useful to examine the available statistical evidence to consider which types of action are most likely to be long-running, in the sense of involving delays of five years or more between the cause of action arising and the payment of damages or debt.

 

B2 Evidence on the duration of cases is patchy. The Judicial Statistics provide information on waiting time for trial, as measured from the issue of proceedings to the start of trial.[1]They do not, however, provide information about delays occurring before proceedings are issued. Nor do they give any indication of the duration of cases that settle after the issue of proceedings but before being set down for trial.

 

B3 There are, however, several ad hoc studies that add to our understanding of delay within the Civil Justice System. A key study was conducted by Professor Genn for the Woolf enquiry in 1996.[2]This looked at the cost and duration of cases submitted to the Supreme Court Taxing Office (SCTO). At the time, the SCTO dealt with High Court cases where the losing party wished to challenge the winning party’s costs. The sample therefore included many expensive and contentious cases. Although these cases are not necessarily typical of litigation as a whole, they provide an important insight into difficult and long-running disputes.

 

B4 Genn found substantial differences between case types. As measured from first instructions to conclusion of case, the longest-running cases were medical negligence (mean 65 months), followed by personal injury cases (56 months) and professional negligence cases (41 months). The most rapidly concluded cases were judicial review cases (12 months), bankruptcy/companies court cases (13 months) and commercial cases without a claim value (16 months). The study also found that average case duration was significantly longer where the winning party had legal aid. The longest waits were therefore experienced by legally aided claimants bringing medical negligence claims (mean 66 months), personal injury claims (60 months) and professional negligence claims (52 months).

 

B5 This study is limited in that it looked only at delay from when the claimant first approached a solicitor. For most types of litigation, little information is available about delays from cause of action to legal instructions. In the case of personal injury litigation, however, studies suggest that most clients visit a solicitor within six months of the accident.[3]

 

B6 Studies of legally-aided litigation have confirmed that claims for serious medical negligence, some severe personal injuries and professional negligence can result in considerable delay. A detailed study of legally-aided personal injury claims concluded that medical and work (especially industrial disease) cases lasted substantially longer than road, pavement “trip” or occupiers’ liability cases. It also found that case duration increased with severity of injury, with severe injury cases taking twice as long to resolve as minor injury ones.[4]A study of legally-aided general litigation confirmed that delays were a particular problem with professional negligence claims. The mean delay experienced by successful legally-aided professional negligence claimants was 50 months. Similar delays also occurred in actions against the police.[5]

 

B7 Finally, the research conducted for us by Professor Genn in 1994 explored the consequences of delay for personal injury victims.[6]The study found that the larger the claim, the longer the delay. Delay caused the greatest problems for victims receiving compensation of £100,000 or more, a third of whom waited at least 6 years from the accident to settlement.[7]These were the victims most likely to have accumulated debts in the aftermath of the accident: a fifth had borrowed £5,000 or more, and 7 per cent had borrowed £10,000 or more.[8]It is worth observing that accident victims in the study had often borrowed at relatively high rates of (compound) interest, relying particularly on credit cards and bank loans.

 

B8 All the studies cited preceded the civil justice reforms introduced in 1998 as a result of Lord Woolf’s report on Access to Justice. The reforms were designed to reduce delay. Reforms in the way legal aid is administered also aim to encourage the swift and focused resolution of cases.[9]It may be therefore the case that in future delays will be reduced, though it is still too early to assess the effect of these reforms on long-running cases. It is not possible to estimate the number of future cases that will involve delays of over five years between cause of action and conclusion. It is also clear that any case may involve substantial delays.[10]However, previous studies suggest that the greatest effect of awarding compound rather than simple interest would be felt in medical negligence claims, in other large personal injury claims and in claims for professional negligence, especially where the claimant is relatively impecunious. Commercial litigants seem to be better placed to resolve their disputes within a few years.