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The UNISON Case – Biggest SC Case for Years

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R v Lord Chancellor (ex p Unison) [2017] UKSC 51

This is my 100th post on this blog. I started it in June 2011 and had been intending to put up a commemorative piece, going over my favourite articles and looking forward to the future. I may still be doing this, but not now. Because the SC’s decision this morning is so significant that I have to cover it immediately

The facts of the case are simple. In 2013 the government imposed fees on applications to the Employment Tribunals, all of which had previously been free. By way of contrast the civil courts have charged fees for claims, applications and other activities for hundreds of years. But the ET fees were very high – £390 for the simplest claims, and £1,200 for the more complex ones, including Unfair Dismissal, Equal Pay and Discrimination claims. There were also fees imposed in the appeal tribunal – the EAT. These fees were generally to be paid in two stages – to issue, and to proceed to a hearing.

These fees were much higher than the fees for equivalent claims in the courts, and were in many cases to be paid by applicants who had just lost their jobs, so it is not surprising that immediately after they took effect  – on 29th July 2013 – the number of applications slumped by about 80%. It would appear that many employers took the view that instead of negotiating a settlement at an early stage they would wait until they saw if the employee paid the fee to issue and to proceed to a hearing before negotiating, as the number of settlements reported to ACAS fell as well.

Now this case wouldn’t be important if all that happened was that the fees were reduced to something a bit more reasonable. This is clearly what is going to happen in the end, even though there is no indication of this as I write. No, the interest is in the way the Supreme Court laid out the manner in which it clearly intends to behave in the future, as Brexit happens and the ECJ fades out of the picture. Because it made it abundantly clear that despite the lack of the sort of constitutional supremacy that a Supreme Court has in say the United States or Germany it is going to lay down the law in a totally fearless way and is not afraid to extract constitutional rights from the Common Law if it can’t find them in statute.

The Decision

The main speech is given by Lord Reed, with whom the other Justices in a bench of 7 agree. After setting out the facts, the statistical reports, and the history of the case, he sets out the constitutional principles  – in this context the rights to access to the courts, and that statutory rights are not to be cut down by subordinate legislation. And he then gives a lesson on the constitution in extremely simple but devastating words:

66.             The constitutional right of access to the courts is inherent in the rule of law. The importance of the rule of law is not always understood. Indications of a lack of understanding include the assumption that the administration of justice is merely a public service like any other, that courts and tribunals are providers of services to the “users” who appear before them, and that the provision of those services is of value only to the users themselves and to those who are remunerated for their participation in the proceedings. The extent to which that viewpoint has gained currency in recent times is apparent from the consultation papers and reports discussed earlier. It is epitomised in the assumption that the consumption of ET and EAT services without full cost recovery results in a loss to society, since “ET and EAT use does not lead to gains to society that exceed the sum of the gains to consumers and producers of these services”.

67.             It may be helpful to begin by explaining briefly the importance of the rule of law, and the role of access to the courts in maintaining the rule of law. It may also be helpful to explain why the idea that bringing a claim before a court or a tribunal is a purely private activity, and the related idea that such claims provide no broader social benefit, are demonstrably untenable.

68.             At the heart of the concept of the rule of law is the idea that society is governed by law. Parliament exists primarily in order to make laws for society in this country. Democratic procedures exist primarily in order to ensure that the Parliament which makes those laws includes Members of Parliament who are chosen by the people of this country and are accountable to them. Courts exist in order to ensure that the laws made by Parliament, and the common law created by the courts themselves, are applied and enforced. That role includes ensuring that the executive branch of government carries out its functions in accordance with the law. In order for the courts to perform that role, people must in principle have unimpeded access to them. Without such access, laws are liable to become a dead letter, the work done by Parliament may be rendered nugatory, and the democratic election of Members of Parliament may become a meaningless charade. That is why the courts do not merely provide a public service like any other.

69.             Access to the courts is not, therefore, of value only to the particular individuals involved. That is most obviously true of cases which establish principles of general importance. When, for example, Mrs Donoghue won her appeal to the House of Lords (Donoghue v Stevenson [1932] AC 562), the decision established that producers of consumer goods are under a duty to take care for the health and safety of the consumers of those goods: one of the most important developments in the law of this country in the 20th century. To say that it was of no value to anyone other than Mrs Donoghue and the lawyers and judges involved in the case would be absurd. The same is true of cases before ETs. For example, the case of Dumfries and Galloway Council v North [2013] UKSC 45; [2013] ICR 993, concerned with the comparability for equal pay purposes of classroom assistants and nursery nurses with male manual workers such as road workers and refuse collectors, had implications well beyond the particular claimants and the respondent local authority. The case also illustrates the fact that it is not always desirable that claims should be settled: it resolved a point of genuine uncertainty as to the interpretation of the legislation governing equal pay, which was of general importance, and on which an authoritative ruling was required.

70.             Every day in the courts and tribunals of this country, the names of people who brought cases in the past live on as shorthand for the legal rules and principles which their cases established. Their cases form the basis of the advice given to those whose cases are now before the courts, or who need to be advised as to the basis on which their claim might fairly be settled, or who need to be advised that their case is hopeless. The written case lodged on behalf of the Lord Chancellor in this appeal itself cites over 60 cases, each of which bears the name of the individual involved, and each of which is relied on as establishing a legal proposition. The Lord Chancellor’s own use of these materials refutes the idea that taxpayers derive no benefit from the cases brought by other people.

71.             But the value to society of the right of access to the courts is not confined to cases in which the courts decide questions of general importance. People and businesses need to know, on the one hand, that they will be able to enforce their rights if they have to do so, and, on the other hand, that if they fail to meet their obligations, there is likely to be a remedy against them. It is that knowledge which underpins everyday economic and social relations. That is so, notwithstanding that judicial enforcement of the law is not usually necessary, and notwithstanding that the resolution of disputes by other methods is often desirable.

72.             When Parliament passes laws creating employment rights, for example, it does so not merely in order to confer benefits on individual employees, but because it has decided that it is in the public interest that those rights should be given effect. It does not envisage that every case of a breach of those rights will result in a claim before an ET. But the possibility of claims being brought by employees whose rights are infringed must exist, if employment relationships are to be based on respect for those rights. Equally, although it is often desirable that claims arising out of alleged breaches of employment rights should be resolved by negotiation or mediation, those procedures can only work fairly and properly if they are backed up by the knowledge on both sides that a fair and just system of adjudication will be available if they fail. Otherwise, the party in the stronger bargaining position will always prevail. It is thus the claims which are brought before an ET which enable legislation to have the deterrent and other effects which Parliament intended, provide authoritative guidance as to its meaning and application, and underpin alternative methods of dispute resolution.

He then sets out the principle as found in all the standard constitutional documents, which some of us will remember from the beginning of a law degree – Coke’s Institutes, Blackstone’s Commentaries, and of course Magna Carta:

  1. In English law, the right of access to the courts has long been recognised. The central idea is expressed in chapter 40 of the Magna Carta of 1215 (“Nulli vendemus, nulli negabimus aut differemus rectum aut justiciam”), which remains on the statute book in the closing words of chapter 29 of the version issued by Edward I in 1297:

“We will sell to no man, we will not deny or defer to any man either Justice or Right.”

Those words are not a prohibition on the charging of court fees, but they are a guarantee of access to courts which administer justice promptly and fairly.

For myself I prefer the traditional translation of the passage:

To no man will we sell, to no man will we deny or delay Justice and Right

He then quotes the  cases leading up to the present day. You can see them yourselves from the link at the top of this piece.

The Conclusion

Having looked at the principle he then applies it to the case. For court fees to be lawful they have to be set at a level that everybody can afford, taking into account any remission available. This is not being achieved. For a number of reasons:

  • The sharp and substantial and sustained fall in the volume of cases … as a result of the introduction of fees.
  • People are often obliged to resort to the ET jurisdiction involuntarily and unexpetedly.
  • The Review Report said 10% of claimants said they didn’t bring a claim because they couldn’t afford to do so. This means reasonably afford to do so – not by having to sacrifice “the ordinary and reasonable expenditure required to maintain …an acceptable standard of living”.
  • Hypothetical examples show that the cost to low-income families can be all their free income for up to 3 month. This is not affordable in the real world.
  • The statutory power of remission is far too restricted to change matters. It is limited to exceptional circumstances, but the problem is systemic.
  • Fees can prevent access to justice if they make it futile or irrational, such as in the case of low value claims for say unlawful deductions from wages, especially as many successful applicants recover nothing from their employers in the end.

The fees are therefore unlawful.

He scampered over the remaining points with a side-swipe at an attempted justification on economic grounds

99.             The primary aim of the Fees Order was to transfer some of the cost burden of the ET and EAT system from general taxpayers to users of the system. … Similarly, in his written case, the Lord Chancellor states that, in pursuing the aim of transferring the costs of the tribunals from taxpayers to users, “the higher the fees are, patently the more effective they are in doing so”. This idea is repeated: in recovering the cost from users, it is said, “the higher the fee, the more effective it is”.

100.         However, it is elementary economics, and plain common sense, that the revenue derived from the supply of services is not maximised by maximising the price. In order to obtain the maximum revenue, it is necessary to identify the optimal price, which depends on the price elasticity of demand. In the present case, it is clear that the fees were not set at the optimal price: the price elasticity of demand was greatly underestimated. It has not been shown that less onerous fees, or a more generous system of remission, would have been any less effective in meeting the objective of transferring the cost burden to users.

The fees are also held to be contrary to EU law as imposing limitations on the exercise of EU rights which are disproportionate, and hence contrary to Article 47 of the Charter of Fundamental Rights of the EU

Article 47 guarantees in its first paragraph that “everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal”. In terms of article 52(1):

“Any limitation on the exercise of the rights and freedoms recognised by this Charter must be provided for by law and respect the essence of those rights and freedoms. Subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others.”

As a result, and despite the Lord Chancellor arguing that the SC should only make a declaration that the current levels of the fees were too high the court disagreed in strong terms:

119.         That argument mistakes the nature of the illegality with which we are concerned. This is not a case in which an administrative decision is being challenged on the basis that relevant considerations were not taken into account, or on the basis that the decision was unreasonable. The Fees Order is unlawful under both domestic and EU law because it has the effect of preventing access to justice. Since it had that effect as soon as it was made, it was therefore unlawful ab initio, and must be quashed.

Lady Hale gave a subsidiary speech explaining why the fees also amounted to unlawful discrimination on the grounds principally of discrimination against women, who made up a high proportion of the more expensive Type B claims. And the rest of the court agreed with both of them.

The Consequences

The fees are quashed. Everybody who paid them will be refunded (at a cost estimated at £32m) and until new lawful fees are fixed all ET and EAT proceedings are free. There is a lot of egg on the government’s face, mainly on Mr Grayling’s who was LC at the time they were imposed.

But more importantly the SC has shown that it will stand up for the rights implicit in the rule of law – that there must not only be laws but they must be effectively enforceble through the courts if need be. “That is why the courts do not merely provide a public service like any other.”

I have written on many occasions on the subject of the need to have an effective court system that the public can use, and if it wasn’t the middle of the night I would give you the cross references. The most prominent are Having Rights is Not Enough and Mediation – not the Complete Answer, but there are many others – it is one of my hobby-horses. I may return to this in post 101 shortly, especially after the news that the civil courts made a profit in the last year. Therefore it is really good news that the SC is doing the heavy lifting for us and won’t let a mere politician get in their way.

So that is why I feel that this is the most important SC case for years, even despite the Brexit case in January R v SoS (ex p Miller) That merely showed that the government was doing something that it could do but doing it the wrong way. This is showing that the whole basis of what they are trying to do is wrong, and that is what gives it the importance that it has.

Written by Coventry Man

27/07/2017 at 00:46

At Last, some Relief (from Sanctions)

with 2 comments

Denton & others v TH White Ltd & others [2014] EWCA Civ 906

This is, I am afraid, a rather boring and very legal piece about the intricacies of the Civil Procedure Rules (CPR). I try not to write things like this but it is so important that I can’t really avoid doing so. At least it isn’t that long.

I won’t need to remind you that in November 2013 the Court of Appeal gave its decision in Mitchell v NGN and brought down Hell and Damnation on civil litigation in general, and lawyers in particular, by deciding that following the changes in the CPR , especially r3.9, relief from sanctions for failing to comply with court rules and orders was going to be a lot harder to get, and impossible in many cases. They set out a two-stage test:

  1. was the default trivial?
  2. was there a good reason for the default?

So far so good. But they went on to say, or at any rate imply, that if the answers were both “no” then there should be no relief. And often the result was that a whole claim was struck out because some document was served a day or two late without a “good reason”.  Because the CA had said merely overlooking a deadline was unlikely to be a good reason. And rules are rules.

The result of course has been that as soon as you see that the other side has breached some time-scale by the smallest amount you are duty bound to make an application to strike the claim out, and the courts became very clogged up by it all, and in due course, seriously concerned at what a mess they had made.

This wasn’t helped by the case of MA Lloyd v PPP International which decided that in most cases the parties couldn’t extend the time to do things such as exchange lists of documents because it was prohibited by the rules as they then stood. I said at the time that something would have to be done because it was unworkable (here) and after a time the CPR were changed to allow the parties to extend time by up to 28 days provided court hearings were not put at risk (r3.8(4)) . But that left a lot of other problems. And why should you agree to extend time if your client could get such a bonus by being awkward and saying “no”?

Relief at last

Well the Court of Appeal has at last acted and on 4th July 2014 decided Denton v White and eased things up considerably, and smacked heads and told everybody not to be so silly in future. I won’t go into things in detail because virtually everybody has done so already, and for the full story either read the judgement (another link here) or look at the articles listed below. But the outline is that the court has looked at the test for relief set out in r3.9 and decided the right way to go about things is now to ask:

  1. Is the breach serious or significant? In other words, will it have a real effect on the future conduct of the case, or seriously inconvenienced other court users? If not then relief should normally be given, and matters come to an end. If it is however:
  2. Why did the default occur? Was there a good reason, or excuse? If so then relief should be given. But if not:
  3. Look at all the circumstances of the case, consider what is necessary to deal justly with the application, but bear in mind the two particular factors a) and b) below, and make a fair and just decision. Just because the default was serious and  there was no excuse does not mean that the relief has to be refused. It will just make things harder for the applicant.

The two factors are set out in CPR r3.9 which provides:

(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need –

(a) for litigation to be conducted efficiently and at proportionate cost; and

(b) to enforce compliance with rules, practice directions and orders.

(2) An application for relief must be supported by evidence.

And having set down the rules, the court decided the cases on their merits, and then laid into parties who try to take advantage of small slips by their opponents:

41 We think we should make it plain that it is wholly inappropriate for litigants or their lawyers to take advantage of mistakes made by opposing parties in the hope that relief from sanctions will be denied and that they will obtain a windfall strike out or other litigation advantage….

42 It should be very much the exceptional case where a contested application for relief from sanctions is necessary. This is for two reasons: first because compliance should become the norm, rather than the exception as it was in the past, and secondly, because the parties should work together to make sure that, in all but the most serious cases, satellite litigation is avoided even where a breach has occurred.

43 The court will be more ready in the future to penalise opportunism. The duty of care owed by a legal representative to his client takes account of the fact that litigants are required to help the court to further the overriding objective. Representatives should bear this important obligation to the court in mind when considering whether to advise their clients to adopt an uncooperative attitude in unreasonably refusing to agree extensions of time and in unreasonably opposing applications for relief from sanctions. It is as unacceptable for a party to try to take advantage of a minor inadvertent error, as it is for rules, orders and practice directions to be breached in the first place. Heavy costs sanctions should, therefore, be imposed on parties who behave unreasonably in refusing to agree extensions of time or unreasonably oppose applications for relief from sanctions. An order to pay the costs of the application under rule 3.9 may not always be sufficient. The court can, in an appropriate case, also record in its order that the opposition to the relief application was unreasonable conduct to be taken into account under CPR rule 44.11 when costs are dealt with at the end of the case. If the offending party ultimately wins, the court may make a substantial reduction in its costs recovery on grounds of conduct under rule 44.11.  If the offending party ultimately loses, then its conduct may be a good reason to order it to pay indemnity costs. Such an order would free the winning party from the operation of CPR rule 3.18 in relation to its costs budget. [my emphasis]

Even judges were not immune from criticism, and it was pointed out that if rules are to be complied with then timetables and other directions have got to be realistic, and “unless” orders should be reserved for situations in which they are truly required.

So what next?

Given the unholy mess that has emerged over the 8 months or so since Mitchell it is very much hoped that things will now settle down so that those of us at the coal face can get on with litigating disputes for our clients and not spending all our time making sure that we don’t overlook the slightest direction or requirement, or pouncing on our opponents if they do so. The CA was pretty robust, and given the emphasis on penalising parties who are unreasonable it is going to be a lot more dangerous to oppose applications for relief in future. Only time will tell.

There have been a lot of comments on the fact that although the main judgement was given by by Lord Dyson MR and Vos LJ, there was a separate judgement by Jackson LJ that disagreed to some extent with the majority decision. And the reforms had of course been brought in following Jackson LJ’s report. But in all fairness the disagreements were more on matters of emphasis than anything else.

And the latest thing is consideration on whether it would now be possible to appeal some of the relief applications out of time, in the light of Denton. Is an application to appeal a relief application out of time an application for relief against sanctions?

More details

Lots of comments in all the normal legal sources, plus a lot of solicitors’ or chambers’ sites as well. As normal the best are at Nearly Legal and Gordon Exall’s site which has an enormous number of links, comments and lists of all sorts.

Written by Coventry Man

17/07/2014 at 18:44

Having Rights is Not Enough

with 4 comments

Let me tell you a story. You are walking down a dark lane carrying a box containing a nice watch that you have just bought from a jewellers. A thug comes up to you, threatens you with a knife, and demands that you give it to them. You tell them “it’s mine, I’ve just bought it”. They say that they don’t care, and as you aren’t a mad hero you hand it over and they run off. Your legal rights have been completely worthless on their own. What you needed was a pet leopard, one of those Crocodile Dundee “you call that a knife? This is what I call a knife” blades, or a small troop of cavalry. In other words, you need to have your rights enforced by force if necessary.

Let’s change the facts a bit. You get home safely but the next morning a man from the jewellers comes to say that there has been a mistake and that the watch had been reserved by Mr Big, a local gangster,  and so they shouldn’t have sold it to you and that you would have to give it back. You refuse. They sue you in the local court where the judge is Mr Big’s brother, and despite there being no legal basis for their claim you lose. Again, your legal rights have been completely worthless on their own. You need an honest legal system to enforce the rights.

Let’s change things again. You are sitting at home and admiring your property. A developer calls and gives you a formal claim to buy the house under an option that he said had been granted to him by a previous owner. The price to be paid is a fraction of the true value. You don’t believe the option is genuine (you don’t think it likely that the house once belonged to a “Mr Michael Mouse” of Hollywood) and go to a lawyer. The lawyer explains that under recent legal reforms it is necessary to carry out an enormous amount of work in the early stages of a case, (see here) and so you will need to pay him £25,000 immediately, and that the total cost of the case will be £50k-£100k, or possibly more, of which you may recover half if you win. You don’t have that sort of money, but the developer does. You can’t fight the case on your own and so have to negotiate a poor deal. So your legal rights have been completely worthless on their own. You have to be able to afford to enforce them.

One final scenario. Your local council decide to retrospectively revoke the planning permission on your house and demand that it is demolished without compensation because there was an error in the initial planning application made by the the original owner. This is said to be permissible under recent legislation passed to tighten up planning procedure. You try to find a lawyer to advise you on this complicated matter, but find that under the legislation lawyers are not allowed to advise or represent parties. You try to look up the legal background but it is beyond your limited education and skill. So you never know what your legal rights are, let alone how to enforce them. Your legal rights have been completely worthless on their own. You need access to legal advice when necessary.

These are just stories, as I said at the beginning. But the lessons are very real. Legal rights are only any good if they can be enforced for a sensible price and in a sensible period of time by the people who have them, and for this purpose they need affordable legal advice and an affordable and fair legal system. Of course some matters are best dealt with by a small claims system where people argue cases themselves, and some things are best dealt with by ombudsmen and the like. But there must be an effective system if the rule of law is to mean anything. And recent developments, with small claims now running up to £10,000, vastly increased work needed for fairly ordinary civil cases, draconian penalties if anything goes even slightly wrong, the abolition of Legal Aid, greatly increased court fees, large issue and trial fees for employment claims, and the loss of so many local solicitors who gave advice to local people, make me very concerned.

Because if you can’t enforce your rights you’ve lost them.

Written by Coventry Man

04/04/2014 at 18:02

No More Time – the importance of M A Lloyd v PPP International

with 4 comments

We civil litigators have all been given a very nasty shock by the most recent and most disturbing cases of  M A Lloyd v PPP International,  When the case was first out the interest was on the Claimant’s lawyers, who have an interesting professional history. But this was a distraction. Because Turner J decided that the time for service of witness statements, and indeed most other times for doing things, can no longer be extended by agreement of the parties. There has to be an order of the court. There’s a useful comment on this and some other similar issues on the Nearly Legal blog here.

The reason given by the Judge was CPR 3.8(3) which  provides that

Where a rule, practice direction or court order-

(a) requires a party to do something within a specified time; and

(b) specifies the consequences of failure to comply,

the time for doing the act in question may not be extended by agreement between the parties

As CPR 32.10 says that if witness statements are served late the witness concerned cannot be called without leave of the court, these are “consequences” and so the time cannot be extended by agreement.

And because of Mitchell the court should only extend time if there are exceptional reasons, such as the solicitor concerned being taken seriously ill. So instead of agreeing with your opponent to exchange expert reports 7 days later than ordered, because the expert is being a bit slower than you would like, and there being no harm to either party, and no delay on the trial date, solicitors are now going to have to make an application for an extension of time which may well be treated by the court as an application for relief from penalties, under CPR 3.9, which the court should normally refuse, under the Mitchell doctrine.

Previously it had always been assumed that the reference to the “consequences”was a reference to an “unless” order when the court had prescribed penalties because of previous failures to adhere to the rules, but this no longer seems to be the case. And it is a serious matter. There are consequences set out in the rules for failing to include documents in Lists of Documents, failing to serve witness statements in time, and numerous other things. In all these cases the parties are going to have to make applications for extension of time. And although it is only the decision of a judge at first instance, the decision by Turner J, a High Court Judge, will be binding on all Masters and DJs, who handle the vast majority of this work. They had better not book too much holiday in the next few months because they are all going to be working their socks off for the foreseeable future.

It may be that the CA steps in to sort matters out, but I doubt it, given Mitchell. We’ll have to see how things develop.

The best way to do so is to follow Gordon Exall’s excellent blog Civil Litigation Brief which covers everything remotely connected to the problem. (What will he do when it’s all sorted out, as it surely has to be?)

Written by Coventry Man

26/01/2014 at 18:41

Law or Justice – Where Are We Going?

with 2 comments

There are two classic forms of Justice:

In the first, a perfectly wise judge dispenses justice under a palm tree. There are no rules, other than a record of his previous decisions, but he achieves the right result because of his wisdom.

In the second a perfectly wise ruler promulgates a code of laws and these are enforced by a a corps of officials. Although not particularly wise they are thorough, logical and incorruptible and they always achieve the right result because of the perfection of the rules.

Most, indeed all legal systems work as a mixture of the two. Exactly where they are placed on the continuum depends on the quality of the judges, the quality of the laws, the sophistication of the community and their lawyers, and so on.

Neither system is perfect: the first system is difficult to predict and hence difficult for others to plan – is the prohibition on killing people or just on killing people unless they attack you? And the second system can fall apart if the laws become ever more complex to take account of more and more exceptions and special cases, so nobody knows what it means, at any rate within a reasonable period.

Where we are coming from

The English legal system has traditionally been based on the first system, with a lot of emphasis being based on the quality of the judges and the legal representation, especially in the higher courts. High Court judges and those in the appeal courts have had an excellent reputation and English lawyers are some of the best in the world. As a result, laws have been reasonably general, and a lot of discretion has been allowed to the judges in interpreting them, and in controlling their own procedure. Even if there have been procedural rules these have always been filled with “unless the court otherwise directs” and judges have been encouraged to look to the  justice of the ultimate decision.

Now the system was far from perfect. It was far too slow  – quite ordinary cases could run on for 2-3 years  – and surprisingly expensive. A lot of time was wasted waiting for various procedural hearings, or persuading the courts to enforce orders that they had already made, and which your opponents were just ignoring. And if you had a bad judge you got some shockingly bad results. So as business geared up into the 80s and 90s things needed to change.

Where we got to

A good place to draw breath was the beginning of this century. In 1999 the Civil Procedure Rules (CPR) came in to replace the Rules of the Supreme Court and the County Court Rules that went  back essentially to Victorian times. These were intended to speed up court procedure and force the parties and their lawyers to get on with things. They provided all sorts of new innovations, such as the exchange of witness statements long before trial, and more detailed disclosure of documents, and provision for expert witnesses, and telephone hearings, and modernisation of the rules on costs, which virtually nobody understood.

They represented a significant movement in the direction of the second, rule-based system. There was far more detailed procedure and the courts were encouraged to enforce it, at any rate by way of penal provisions for costs. But still the judges could alter things, and exercise their discretion, and the (new) overriding objective was

To deal with cases justly, and at proportionate cost.

Outside the courts there had of course been a lot more changes. Governments decided that they didn’t just want to govern the country, but to change things as well. So they set about passing vast numbers of laws on all subjects, including not only Acts of Parliament, but vast swathes of secondary legislation by way of rules and orders and regulations. And they created other bodies to do more of this, and started regulating the financial services industry, and employment, and health and safety, and so on. And the EU of course did the same, only in 15 different languages. So there was an awful lot more law than there had been.

At the same time the IT revolution arrived, making it initially lots easier to prepare much longer documents, such as contracts and leases, and witness statements, and then much easier to keep track of all the new laws using the internet. Whether the two balanced each other is a matter for debate.

Where we are now

There can be no doubt that there are now more rules than ever, and there has been a further significant movement towards the rule-based system. But as well as the steady accrual of more and more regulation, both for the country at large, and within the legal system, there have been several recent developments that have pushed things sharply in that direction, mainly arising from the Jackson Report.

The new costs rules which came into force in April 2013 meant that all cases worth more than £25,000 had to have their costs approved by a Judge beforehand, or, in effect, they would not be recoverable from the losing party if you won. It didn’t matter how unfair this was. Nor that many judges knew little about costs or what was involved in running a case at the sharp end. It was decided that predictability of cost trumped all this. Not that it was a bad thing to have predictable costs, but it was some way from pure fairness.

Then there were the further rules that came into force in October 2013, and which I dealt with in a piece at the time. These emphasise the importance of detailed case management at the first Case Management Conference, which will now last for an hour or two and will plan the whole conduct of the case from a viewpoint of 2-3 months after issue. Lots of decisions that used to be made by the lawyers as matters proceeded are now going to be fixed by the DJ at this hearing.

Now, all litigation is, to some extent,unpredictable. When both sides know what the answer is going to be they don’t fight about it, but come to a rapid settlement. If the facts and the law are clear then you don’t need to spend all that money on lawyers and so on. And in many cases which started off as potentially arguable a bit of early investigation show one side or the other that the experts all think one way, or your key witness isn’t as clear as you hoped, or the legal problem was determined by the Court of Appeal  in an identical case in 1987. So you just have to bite the bullet. But this still leaves a number where the outcome might go either way.

In some of these, things come out of the woodwork as the matter proceeds. You find another witness who you didn’t know about, or who knows more than you expected. Or there are things in the documents that the clients had overlooked and only appear when you are well on the way to trial. Or counsel finds that case in the CA, which was mis-indexed on Lexis. The result is that the case needs to be altered, to accommodate the new witness, or the new documents, or whatever. Various time limits will need to be amended, the other side may need to be allowed to deal with the new material and there may even need to be alterations in the time estimate for the trial.

In the past this wouldn’t be too disastrous. There would probably be penalties in costs, and the interests of justice in coming to the right decision have now been challenged by the importance of allocating the appropriate share of the court’s resources to the case, and to enforcing compliance with rules, practice directions and orders. But still the basic concept of getting the right result. However, all was going to change at the end of 2013.

The Mitchell Case

The latest CPR revision came into force on 13.11.13 and on 27.11.13 the CA gave down the judgement in the Mitchell v NGN case (Plebgate). As you know, they refused to allow the Claimant to recover any costs even if he wins because his costs schedule was 5 or 6 days late. The costs claimed amount to over £500,000 and comfortably exceed any likely award of damages. The reasons given were that the rules were there to be obeyed and the court was going to make an example of them in order to encourage the others: well these were the clear reasons that were applied;  the CA expressed them with a bit more subtlety.

Following this case there have been large numbers of cases in which parties were penalised for being slightly out of time in doing various things, often by having claims or defences entirely struck out or large amounts of evidence disallowed. A few of them were cases in which severe penalties were deserved, after a long history of failures to comply with the rules, but many of these were complete windfalls for the opponents who had noticed minor technical errors. There is a very useful compilation of the recent case-law in Gordon Exall’s website Civil Litigation Brief

One of the most recent and most disturbing cases is M A Lloyd v PPP International, which was commented on by the Nearly Legal blog here. When the case was first out the interest was on the Claimant’s lawyers, who have an interesting professional history. But this was a distraction. Because Turner J decided that the time for service of witness statements, and indeed most other times for doing things, can no longer be extended by agreement of the parties. There has to be an order of the court. And as Turner J is a High Court Judge this is binding on all the Masters and DJs who deal with the vast majority of the procedural work. They are going to notice a big increase in their workload.

What do we conclude

Judges still retain some leeway, but a lot less than they used to have. The rules are coming out on top. And because rules are rarely prepared as a whole code, but usually built up piecemeal filling the gaps and correcting the problems, they often are inconsistent, contradictory, and have unexpected results. There will always be problems that need sorting out. Because at the end of the day the purpose of a legal system is to provide justice to the litigants.

This is why judges have always been given the discretion to sort things out, and look at the overall picture. Of course they need to bear in mind the fact that no system will work if too many people fail to follow the rules and ask to be treated as exceptions. We don’t want to go back to the delays there were in the past. But no system of justice can work if every slight deviation from the myriad of rules is wholly fatal to one side or the other. That is not justice.

The Judicial Oath that is taken by all members of the judiciary is:

“I, _________ , do swear by Almighty God that I will well and truly serve our Sovereign Lady Queen Elizabeth the Second in the office of ________ , and I will do right to all manner of people after the laws and usages of this realm, without fear or favour, affection or ill will.”

One would hope that the “laws and usages of this realm” do not entirely overwhelm the obligation to “do right.”

Written by Coventry Man

26/01/2014 at 18:16

Mediation – Not the Complete Answer

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A lot has been made recently about the benefits of mediation. It is seen as a cost-effective and low-risk alternative to litigation, and much encouraged by the government, who are proposing compulsory mediation in matrimonial cases and possibly in all small claims in the County Court. And as small claims are likely to rise to £15,000 or £25,000 shortly (not so small in many people’s books) this is a serious matter.

For those of you who don’t work at the coal face of litigation, mediation is a facilitated negotiation, with the mediator usually flitting between the two parties pointing out the good and bad points in each other’s arguments. Ultimately if he (or she) is successful the parties come to an agreement, which is binding as a matter of contract. If not, then matters proceed, to litigation, arbitration , or just a stalemate, according to the parties’ wishes. And whatever is said in the mediation can’t be referred to in the litigation etc in the same way that “without prejudice” discussions are. It is increasingly popular for all sorts of disputes, from the largest to those between neighbours. It is undoubtedly a Good Thing.

The important point, and in many ways the reason that it works, is that it is and remains voluntary. The parties only take part because they both think it might be worthwhile, and only enter into an agreement because they prefer to do this rather than to take the alternative courses of action. The mediator can’t impose a decision on them, like an arbitrator, or decide a point of law, or indeed insist on anything. It is down to what the parties decide.

Now this means a lot of time in mediations is spent in second-guessing the alternatives. A wise mediator will say”I don’t think a Judge would be very impressed with that argument/that evidence”. Or he will say “do you really want to reveal all that in open court?” Or “do you realise how long/how expensive litigation will be?” The parties weigh their chances and decide to take the least worst option and settle. Or they don’t and decide that they would rather take their chances elsewhere.

It is much like negotiation between experienced lawyers. You think that you have a 50% chance of winning, but that the other side can’t afford to go all the way to court, and so you stick out for 90% of the claim. Or you take the opportunity of backing down without losing too much face on the grounds that your client needs to carry on trading with the other party come what may, and the cost can be factored in to future dealings. Or whatever.

Some of these arguments can be very much the arguments of the bully, or the hard-nosed world of unions and employers. If your client is big enough then they will be able to force a settlement on the other side because they can’t afford to stand up to them. It is reality, the law of the jungle.

But it isn’t always very fair. If your client has a good legal claim then unless the other side is prepared to concede it in mediation, which they may not for good tactical reasons, then the client has to be prepared to call their bluff and go to court, or give in.  And mediation can’t provide emergency remedies, such as injunctions or freezing orders or even insist on (rather than just ask for )  suitable disclosure of documents, let along interrogate witnesses, even key ones.

Now, all of this depend on there being a practical method of getting the claim decided by court, for a sensible cost, and within a reasonable time. Without this, one party can be as unreasonable as they like and it doesn’t matter – nothing is going to happen. If the court system is cut to the bone, then it is unlikely to provide prompt and efficient justice. Mediation won’t prevent this.

Indeed it may make matters worse. If a client has to jump through  a substantial mediation hoop before he is allowed to bring his claim to court,  knowing all along that his thoroughly unpleasant opponent is never going to settle, wasting time and incurring cost, he is getting a much inferior sort of justice than he would if he can decide that mediation is going to be a waste of time and issue right away.

So mediation is not the answer. It is part of the answer, in conjunction with a way to determine disputes that don’t settle earlier. In many ways it is like the view of litigation given by Lord Woolf  when drafting his reforms to the Civil Justice system: litigation is primarily a way of forcing the parties to settle without a trial, as +90% of them do, and the system wouldn’t work without this.

It won’t work on its own, and we must be worried that this point has been lost on the planners and politicians. We need to make sure that it gets across.

Written by Coventry Man

22/06/2011 at 18:31