knowledge 26 July 2016 |

When is a Preliminary Issue or Modular Trial Appropriate?

Preliminary Issue

The Court of Appeal has recently considered the test for deciding whether a preliminary issue should be directed. The general rule is that if proceedings involve a question of law, which can be decided without factual evidence, the court can direct that the question of law be dealt with as a preliminary issue¹; if the decision of that issue disposes of the proceedings, the court can give judgment².

In Thomas v Commissioner of An Garda Síochána & others³, the High Court had directed the trial of preliminary issues directed at whether the plaintiff ’s claims were statute barred. The plaintiff appealed on a several grounds, including that had applied to amend her Statement of Claim, and that application, if fully successful, might extend her claims against the respondents. The application to amend was contested by the respondents. The plaintiff ’s primary objection to direction of the preliminary issues was based on her contention that the conspiracy she alleged was ongoing; that resolution of the conspiracy claim required a full hearing of the evidence related to all, or almost all, the issues arising; therefore, that the determination of the directed preliminary issues would have no positive or practical consequences for the parties irrespective of the outcome, and that it would not be possible to agree facts to facilitate a preliminary trial of issues.

The Court of Appeal reviewed the applicable rules and principles. It noted that in Tara Exploration and Development Company Limited v Minister for Industry and Commerce⁴, the Supreme Court had held:

 “The infrequent use of this procedure may be explained by the restricted field in which it can operate. First of all, there must be a question of law which can be identified amongst the issues in the action. Further, this question of law must be such that it can be decided before any evidence is given. If special facts have to be proved, or if facts are in dispute, the rule does not apply. In addition, it must appear to the court to be convenient to try such question of law before any evidence is given. This will involve a consideration of the effect on other issues in the case and whether its resolution will reduce these significantly, or shorten the hearing. Convenience in this respect must also be considered in the light of what appears fair, proper and just in the circumstances.”

The court recognised the essential purpose of the preliminary issue procedure as being to save time and costs, in the interests of both parties, and the administration of justice generally, and that the power should be exercised sparingly as experience showed that “the formal separation out of a preliminary issue can often make the apparent shortest route, the longest way home.”⁵

It was beyond doubt that the limitation issue was of great significance in the case. While the respondents conceded that trial of the preliminary issues directed might become redundant if the application to amend the pleadings was entirely successful, they contended that the direction was appropriate when made because at that time, no order permitting amendment of the plaintiff’s pleadings had been made, although such an application was imminent.

The Court of Appeal recognised that a direction to try a preliminary issue is part of the ordinary course of case management and while an appellate court may review such directions, it is slow to do so, and will only intervene for compelling reasons⁶. Being satisfied that the criteria in the rules had been satisfied, and recognising that the plaintiff could, if her application to amend her pleadings succeeded, apply to the High Court to review, alter or amend the order directing preliminary issues in the light of any permitted alteration or amendment, the appeal was dismissed.

Modular Trial

A modular trial is a variation on the preliminary issue, which involves the court dealing with different issues sequentially, to optimise the use of court time and to avoid difficulties with unitary trials in long or complex cases. The simplest example is splitting liability and quantum. While the High Court has had an inherent power to order a modular trial as part of case management, recent rules⁷ explicitly endorse the use of modular trials in appropriate cases.

The High Court recently summarised⁸ the principles applicable to deciding whether a modular trial should be permitted, though a modular trial was not directed in the case concerned. They are:

(1)   the court can, in the exercise of its inherent jurisdiction to control the conduct of proceedings before it, direct a modular trial where some issues are separated out⁹;

(2)   modular trials are to be distinguished from preliminary issues, as they involve the court exercising a jurisdiction as to how a single trial of all issues is to be conducted, ie as a single unitary trial or with the court hearing and determining certain issues in advance of others on a modular basis¹⁰;

(3)   in deciding whether to order a modular trial, the court should decide what is just and convenient by reference to a broad and realistic view including the avoidance of unnecessary expense and the need to use court time effectively, giving due weight to the public interest and not giving undue regard to perceived tactical advantages and disadvantages of the parties¹¹;

(4)   the default position is that there should be a single trial of all issues at the same time¹²;

(5)   in straightforward litigation, and absent unusual features (such as the unavailability of quantum witnesses which might otherwise lead to an adjournment), the risk that the proceedings will be longer and more costly if divided outweighs the possible gain in court time and expense in the event that a plaintiff fails on liability¹³;

(6)   relevant factors include (i) complexity and length of the likely trial; (ii) likely relative length and complexity of modules which might be proposed; (iii) the need to insulate a party who is involved with some issues only from the expense and time of having to attend all of a long trial; (iv) whether the approach to calculation of damages will differ significantly depending on how liability is made out and the way in which various defences may be resolved; (v) what is to happen in relation to any possible appeal; (vi) the extent to which there may be overlaps in the evidence relevant to the proposed modules; (vii) any real suggestion that true prejudice (rather than perceived tactical prejudice) might occur by the absence of a unitary trial; and (viii) other special or unusual circumstances arising on the facts of an individual case¹⁴; 

(7)   the court can usefully ask itself four questions: (i) are the issues to be tried by preliminary module readily capable of determination in isolation from the other disputed issues? (ii) has a clear saving in court time and costs been identified? (iii) would a modular trial order result in any prejudice to the parties? (iv) is the application a device to suit the moving party or does it genuinely assist the litigation by helping to resolve the issues?¹⁵;

(8)   it defeats the purpose of a modular trial if a party can easily re-open matters already determined in an earlier module when the court comes to consider later modules¹⁶; the findings on specific issues determined in an earlier module should only be re-opened in exceptional circumstances and the potential for this to happen may influence the judge’s assessment of whether issues are properly capable of determination in isolation.

These recent judgments give a useful reminder that Irish courts are happy to use established case management tools to expedite proceedings which can be quickly decided by focussing in on one or more dispositive issues, but remain reluctant to deploy those tools where there is a considerable risk that the isolation of significant issues for early decision is unlikely to be truly dispositive of the proceedings as a whole.