Michelmores LLP
Posted on 30 Mar 2020
By Michelmores LLP

Coronavirus and litigation – increased progress towards Online Dispute Resolution?

With the Coronavirus outbreak continuing to disrupt businesses across the world, legal services are not immune. While modern electronic working practices have allowed the majority of law firms and barristers chambers to switch almost seamlessly to home-based agile working, just how equipped are the courts to adjust to the restrictions?

In this article we consider the use of Online Dispute Resolution (ODR) to allow the court system to continue operating during the pandemic, and how the long-term consequences may turn out to be positive for the courts.

The current approach

In civil courts, the physical attendance of litigants and/or their legal representatives, key witnesses, experts, court staff and the judge is generally always required (subject to some exceptions such as witnesses based overseas being able to provide witness evidence via video conference).

The outbreak has therefore presented the courts with a fundamental tension between the national objective of protecting public health, and advancing the rule of law by continuing the administration of justice.

Several governments in Europe have now closed their courts as part of their lockdown. The European Court of Human Rights has cancelled all hearings in March and April, except those where an adjournment would cause irreversible harm, and the European Court of Justice has been suspended for two weeks. In the UK however, there has been a reluctance to close the courts and instead, the Lord Chancellor has looked to audio and video conferencing technology to ensure that as many hearings as possible can continue, albeit remotely.

Online Dispute Resolution

ODR – which is a branch of dispute resolution which uses technology to facilitate the resolution of disputes between parties – is not new. Generally though, it is fair to say that the UK has been slow to implement ODR. The most notable reasons for this being that there just has not been a culture which has accepted the increased role that technology can play in our legal system, and there has also been a distinct lack of investment. However, in 2016 the Government invested £1bn to reform the courts and increase access to justice in the digital age.

Pilot schemes have since been introduced to encourage litigants to issue their claims and file online. There has also been an increasing trend towards video and telephone hearings, particularly at interim and preliminary stages. These are conducted wholly or partly without physical presence in a court building. Indeed, the true test of the UK courts' capabilities came recently when the Court of Protection commenced its first three-day trial using Skype.

Some argue that these types of hearings prevent effective cross-examination of witnesses and can undermine evidence, but others are quick to point out that they can reduce delay and costs and help to further the overriding objective. 

The Coronavirus Act 2020

It is perhaps of no surprise then that the Coronavirus Act 2020, which came into force last week, has enshrined this approach for the foreseeable future. Having amended the Courts Act 2003 and the Tribunal, Courts and Enforcement Act 2007, the judiciary now has the power to order that proceedings are heard wholly by audio or video where possible. To uphold the principle of open justice, judges must also ensure that remote hearings are able to be broadcast to members of the public, or at the very least, recorded and that individuals are able to request the court's permission to access the recording. The civil courts have published a protocol on remote hearings, which is further reinforced by issuing Practice Direction 51Y.

Despite a general consensus that ODR is unsuitable for complex and resource-intensive disputes, the UK courts should theoretically be in a position to conduct most civil litigation by remote hearings under the current circumstances.

A comparative approach – China

While across Europe court systems are facing either technological disruption or have shut down completely, China has been able to adapt quickly to the challenge because it already had the infrastructure in place. For example, the first Chinese internet court was opened in Hangzhou in August 2017, and since then similar courts have been established in Beijing and Guangzhou in 2018.

The early adoption of technological solutions in the administration of justice has also fostered a culture which embraces online case management, not only amongst the judiciary, but the wider public. In fact, state media has reported that the Shanghai High Court recorded a 63% increase in online court cases compared to the same period last year. Although ODR has proven it can increase efficiency and reduce costs in the long term, the judiciary and court staff have been mindful that parties do need to be talked through how to use the software before cases can be heard, requiring an initial investment of time[1].

Last month, the Supreme People's Court of China – the highest court in the country – ordered judges to make full use of online litigation, and courts at all levels to encourage litigants to file cases and, where possible, mediate disputes online. There have since been a variety of applications reported including: promoted use of WeChat, a mobile micro-court, across twelve provinces; a complete criminal trial conducted via video link, which led to a prosecution for violations of epidemic prevention and control regulations; and a Beijing judge conducting a full hearing on a private loan dispute using a video conferencing app called Yunshenpan, which translates literally as 'trial in the cloud'. These examples demonstrate that ODR can easily be deployed to ensure that individuals continue to exercise their litigation rights while their health and safety is protected.

Concluding thoughts

The courts were already overburdened and under-resourced well before Coronavirus took hold. Therefore, the biggest challenge the courts face is in the aftermath of the pandemic when undoubtedly, there will be a backlog of trials and hearings that have been vacated during the period of reduced operation. Further, this is likely to be exacerbated by "Corona litigation" – the predicted increase in litigation brought by those affected by the virus. For example, claims brought for money unpaid to businesses, insurance claims and employment tribunals brought by those unpaid or laid off.

Taking stock of the range of ODR options available and their associated benefits, now more than ever is an appropriate time for the Government to increase investment in HMCTS to bolster the ongoing, ambitious reform project - perhaps even becoming fully-operational before the anticipated 2025 target.

It is hoped that Coronavirus and the difficulties it brings can have a profound and positive impact on the use of ODR within our legal system, so that justice is neither delayed nor denied in challenging times.

If you would like to discuss any of the issues raised in this article, or have other concerns about the impact of Coronavirus, please contact our Commercial & Regulatory Disputes team.

CORONAVIRUS STOP PRESS – Click here to keep up-to-date with all of our latest articles.

This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.