WHEN he announced a revamp of the civil procedure rules earlier this year Scotland’s most senior judge, Lord Carloway, noted that the current system is somewhat outdated. An overhaul would, he said, ensure it “makes more sense to someone born at the turn of the millennium than to someone born in the previous two centuries”.

Appropriately enough, the Scottish Civil Justice Council (SCJC) is looking into whether the new rules should make provision for an online dispute resolution system.

According to the SCJC what is required is a shift “to a presumption that every procedural step in litigation should be conducted electronically”.

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While lodging documents online and communicating with court officials via email are obvious improvements, using the internet to agree a financial settlement may not be. Yet the SCJC is considering whether an online blind-bidding system should be introduced to allow parties to settle a dispute without their lawyers having to engage in lengthy negotiations in court.

“Ultimately, most civil cases settle,” the SCJC said in its report on revamping the rules.

“Sometimes both parties are willing to settle at a similar level, but neither party is willing to let the other party know that, for fear of losing bargaining ground; and neither party wants to make the first offer, with the result that the case fails to settle, or only settles very late in the day, resulting in wasted legal expense and court time.”

It added: “Double blind bidding, on the other hand, is a system whereby both parties submit blind (sealed) bids to a third party, with the proviso that if the bids come within an agreed percentage of each other, a settlement is deemed to have been agreed.”

If settlement is not agreed, the matter would proceed through the courts in the normal way.

For Graeme MacLeod, a litigation specialist at the law firm CMS, there are a number of pros to such a system, which is already being used in the US courts as well as to settle disputes between users of online auction sites such as eBay.

“At the moment people don’t want to show their hands a lot of the time and that makes cases drag out,” he said.

“They are worried that they will look weak if they put any kind of offer in.

“The big advantage of this is that there is no stigma attached to putting in an offer early on.

“It also puts it in the clients’ hands and that’s important – too many lawyers think it’s their case but ultimately it’s the client’s case and a lot of businesses in particular will have a number that they will be happy to settle for.”

Another benefit, according the George Moore QC, a solicitor-advocate at insurance law firm BLM, is that the system offers the potential to “take away the trauma of having to appear in court”.

A downside, he said, is that encouraging people to settle at an early stage of a dispute means the truth of a matter may never uncovered.

“There is an anxiety in the legal profession because people are worried about justice on the cheap and how you can get justice if you don’t hear evidence,” he said.

Mr MacLeod agreed.

“You do sometimes find a smoking gun,” he said. “It’s not often there but you can find them as you dig into the other side’s papers.

“People might be concerned that they might be missing a trick.”

While this is unlikely to be a concern for anyone pursuing straightforward or low-value claims, Stephen Moore of Moore Legal Technology said a bigger obstacle to such a system being a success is likely to be the lawyers involved.

Having set up ultimately unsuccessful online settlement business Intersettle while still a trainee at Digby Brown in 1999, Mr Moore said the service failed to take off because lawyers were so wedded to traditional negotiating methods.

While the use of technology within the profession has snowballed since then, Mr Moore said that “the way lawyers work is different but not markedly so”.

He added that the success of an online system would depend both on the motivation of the parties involved and whether it was a requirement of the court system or simply an option to be considered.

“If it’s not enforced it’s likely that lawyers will just do what they have always done,” he said.

“The time is right for this in terms of the technology and I would really like it to work but the challenges remain and they are not around the technology.”