Martin Partington: Spotlight on the Justice System

Keeping the English Legal System under review

Archive for October 2017

The Right to Justice: Final Report of the Bach Commission

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In September 2017, the Bach Commission (chaired by Lord Willy Bach) published its report on the Right to Justice. The  Commission was established at the  end  of  2015  to find solutions that will restore access to justice as a fundamental public entitlement.

The commission found  that  the justice  system  is  in  crisis. Most  immediately,  people  are  being  denied  access  to justice  because  the  scope  of  legal  aid  has  been  dramatically  reduced  and  eligibility requirements  made  excessively  stringent. But  problems  extend  very  widely  through the  justice  system,  from  insufficient public   legal   education   and  a  shrinking information and advice sector to unwieldy and  creaking   bureaucratic   systems   and uncertainty about the future viability of the practice of legal aid practitioners.

Covering many of the same issues as the Low Commission (which reported in 2014) this report makes the following specific recommendations.

The commission has concluded that the problems in the justice system are so wide-spread that  there  is  a  need  for a  new  legally  enforceable  right  to  justice,  as part of a new Right to Justice Act. This Act would:

  • codify existing rights to justice and establish  a  new  right  for  individuals to  receive  reasonable  legal  assistance without costs they cannot afford;
  • establish  a  set  of  principles  to  guide interpretation of this new right covering the full spectrum of legal support, from information and advice through to legal representation;
  • establish a new body – the Justice Commission – to  monitor and enforce    this new right.

The  purpose  of  the  Right  to  Justice  Act  is to create a new legal framework that will, over  time,  transform  access  to  justice.

In addition, early government action is also required.

  • Legal   aid   eligibility   rules  must   be reformed,  so  that  the  people  currently unable  either  to  access  legal  aid  or  to  pay  for  private  legal  help  can  exercise their   right   to   justice.
  • The  scope  of  civil  legal  aid,  which  has  been  radically  reduced,  must  be reviewed   and   extended.   In particular, all   matters   concerning  children  should  be  brought  back  into  the  scope  of  legal  aid.
  • An   independent  body that operates the legal aid system at arm’s length from    government  should  replace  the  Legal  Aid  Agency and action must be taken to address the administrative burdens that plague both the public and providers.
  • Public    legal    capability    must    be improved through a national public legal education and advice strategy  that  improves  the  provision  of information,  education  and  advice  in schools and in the community.

My own view is that there is a growing consensus that the cuts to legal aid have gone too far. I have doubts whether there will be a wholesale return to the legal aid system that existed before the programme of cuts that has been going on for the best part of a decade.

This is potentially an important area of policy making. However, when considering new policies:

  1. more attention should be given to new ways of delivering legal services, embracing new technologies that would allow more to be provided for less;
  2. greater consideration of alternative sources of funding for the provision of legal advice and assistance, especially through different forms of insurance;
  3. the legal needs of small and medium size business should be treated as seriously as the legal needs of individuals, and
  4. there should be a recognition that there is scope for ‘do-it-yourself’ lawyering.

The Bach report may be downloaded from http://www.fabians.org.uk/wp-content/uploads/2017/09/Bach-Commission_Right-to-Justice-Report-WEB.pdf

The Report of the Low Commission is at https://www.lowcommission.org.uk/dyn/1389221772932/Low-Commission-Report-FINAL-VERSION.pdf together with a follow up report, published in 2015 at https://www.lowcommission.org.uk/dyn/1435772523695/Getting_it_Right_Report_web.pdf

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Written by lwtmp

October 20, 2017 at 1:17 pm

Posted in Chapter 10

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Research into Alternative Business Structures: the Legal Services Board

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Since licensing began in 2011 there have been 950 ABS licences issued. As of March 2017 there were 892 active licences.  In April 2017, the Legal Services Board published a significant report into ABS. It sought to address 4 questions, which I have adapted from the report and which I try to summarise here:

1.What kind of investment activity has there been in ABS?

These businesses are predominantly existing legal service businesses converting to ABS status, with one in five respondents to our survey being new firms. Three fifths of ABS have less than 50% non-lawyer ownership. Just under one in five ABS are wholly owned by non-lawyers, with a similar proportion being fully owned by lawyers but having some proportion of non-lawyer managers….

The research shows that the majority of ABS firms (66%) either have already invested or are planning to do so, since they gained their ABS licence. These investments have mainly been made to hire more staff, increase marketing activity or to purchase IT. The LSB sees this as evidence of the increased scale that allowing non-lawyer ownership was designed to enable.

2.Is the market attractive to all sources of finance?

The survey shows ABS firms accessing a wide range of sources of finance, and only a small proportion of ABS indicating difficulties in accessing finance. The most frequent source of funding for investments was business profits or cash reserves which were used by 49% of those who had invested in their business. Just over a quarter of investments were solely funded us ing a loan from a bank, and a quarter were solely funded using the business’ overdraft facility.

External sources of equity finance accounted for only a minority of investment funding sources either as the sole or joint source of investment funds, and only 12% of ABS had used any form of external finance. Partnerships are more likely to use debt funding for finance, with 55% using loans or overdrafts, but none had used external investment. Companies limited by guarantee had the highest proportionate use of any form of external funding, with 24% issuing shares, investment from private equity, or becoming a subsidiary of another company.

3. What do investors think of the legal services market?

According to the investors interviewed, the legal sector is seen as a ‘sleepy’ market with opportunities for investors to grow their investment capital by improving efficiency within the business itself. They appear to have concerns about the ability to exit the legal sector once their investment has matured, although there are some examples of private equity investors having sold on their investment and exited the sector.

Except perhaps in the personal injury sector, it would appear that bank lending is a substitute for external capital. For the firm this means they do not have to cede ownership control of part of their business. In addition, there is a view that many firms do not present financial information in the ways investors expect and/or have a weak grasp of the value of their businesses.

This might explain the investor’s perspective of the legal sector as being reluctant to seek investment from private equity firms, and reports of investors struggling to find appropriate firms in which to invest. While the overall size of the market and the scale of businesses operating may limit opportunities for some investors, the LSB thinks that cultural norms, governance, and non-commercial financial management practices in some businesses are likely to be more important factors.

4. Are there any regulatory barriers to investment?

Only 6% of ABS identified some aspect of legal services regulation that prevented them accessing finance. Nor does the cost of legal services regulation appear to be a barrier… However there is anecdotal evidence of some areas of regulation causing concern to investors. These includes restrictions on ownership and picking up liabilities for historic complaints and insurance claims.

Only 1.5% of ABS identified some aspect of wider regulation that prevented them accessing finance. The regulatory barriers to investment cited by the investor and investment consultant we spoke to relate mainly to wider regulatory and governmental activity, particularly in relation to personal injury reforms

Conclusion:

The potential link between investment and enabling better access to legal services is well–rehearsed elsewhere. However, investment remains an under-explored area of research and generally licensing authorities have not used their data to understand trends in investment and financing. [Overall it may be concluded that] levels of innovation are not increasing.

The dynamics of competition create incentives for suppliers to increase productivity through innovation, which lowers costs and hence prices through time. This is likely to involve taking a different approach to delivering a service, or developing new services completely. In the absence of strong competition, there is insufficient impetus for law firms to take the greater risks (and rewards) involved with using external capital.

Until these incentives change the LSB thinks there is unlikely to be significant growth in the use of external capital by ABS firms.

The report can bee seen at http://www.legalservicesboard.org.uk/news_publications/LSB_News/PDF/2017/20170613_LSB_publishes_investment_in_legal_services_research.html

Written by lwtmp

October 19, 2017 at 5:15 pm

Posted in Chapter 9

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Next steps for ADR?

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In October 2017, the Civil Justice Council published an important consultation paper on the future of ADR.

The paper noted:

The stage has been reached where in various categories of dispute in England and Wales (notably family and employment) the parties are actually required to take steps directed solely to exploring settlement. Nobody in these systems is required to settle, but they are required to commit time and often money to exploring the possibility.
The Courts and rule makers in the non‐family civil justice system in England and Wales have been less forceful. The encouragement of ADR is currently achieved by:
(a) exhortations to try to  settle and to use ADR in Court forms and documents;
(b) links and signposts to sources of information about ADR
(c) tick‐box requirements that clients have, for example, been advised of the need to settle if possible and of the availability at ADR

(d) costs sanctions being imposed after judgment in the relatively rare cases in which one party can establish that his opponent has unreasonably refused or failed to mediate.
(e) the Courts’ acknowledgement that litigation lawyers are now under a professional obligation to advise their clients of the availability and advantages of ADR.
Almost all of these measures are well crafted and well thought out. But in our view the system as a whole is not working….
The Paper then goes on to ask whether the time has come for a different approach.
While noting that online dispute resolution may offer effective ways to resolve disputes, the Paper acknowledges that at present we simply do not know what that new system will look like.
Thus the basic proposition in the Paper is that:
the Court should promote the use of ADR more actively at and around the allocation and directions stage. We think that the threat of costs sanctions at the end of the day is helpful but that the court should be more interventionist at an earlier stage when the  decisions about ADR are actually being taken. We think there should be a presumption that in most cases if parties have not been able to settle a case by the directions stage they should be required to bring forward proposals for engaging in some form of ADR.
Some of us, a minority, would go further and introduce ADR either as a condition of access to the Court in the first place or later as a condition of progress beyond the Case Management Conference…
Overall we draw attention to the fundamental problem of the failure so far to make

ADR familiar to the public and culturally normal. Meeting this wider challenge will
ultimately be more important than any tuning of the rules of civil procedure.
I have long been a supporter of the use of ADR in civil proceedings. Indeed, many years ago I chaired a sub-committee of the Civil Justice Council that considered ways to promote the use of ADR. In welcoming the new paper I make the following suggestions:
1 To be successful, the judiciary must be supportive of the idea of promoting the use of ADR. If they are not supportive, then they will be less interventionist than the paper is suggesting they should be.
2 The judiciary need training in what ADR actually is and how it can be used as a dispute resolution tool. We ran an experimental workshop in which judges took part in role play exercises using ADR techniques. Having a ‘feel’ for the power of ADR in helping parties reach agreements should overcome judicial scepticism – if such still exists – about its value.
3 I think that consideration be given to rebranding Courts as Court and Dispute-Resolution Centre – which happens in some other countries. This sends the clear message that ADR is not something separate from the courts but integral to the Courts’ function.
4. It might be possible that a cadre of judiciary could train as ADR providers and undertake some mediations. (They could not of course hear cases that failed to settle.) But parties might be more willing to accept a process led by a judge rather than someone outside the Court structure.

The Consultation runs until mid-December 2017. The Interim Paper is at https://www.judiciary.gov.uk/wp-content/uploads/2017/10/interim-report-future-role-of-adr-in-civil-justice-20171017.pdf

 

 

 

 

 

Written by lwtmp

October 19, 2017 at 3:05 pm

Posted in Chapter 8

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The Wales Act 2017

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The Wales Act 2017 amends the Government of Wales Act 2006 by moving to a ‘reserved powers’ model for Wales. (This is the model that underpins the devolution settlement in Scotland.) The reserved powers model set out in the Act provides a clearer separation of powers between what is devolved and what is reserved to the UK Parliament. As a consequence, the Assembly has power to legislate on any subject except those specifically reserved to the UK Parliament. (One measure that has already been announced is that there will be legislation to rename the Welsh Assembly the Welsh Parliament.

The Wales Act 2017 includes a declaration that the Assembly (Parliament) and the Welsh Ministers and the laws that they make, are considered a permanent part of the UK’s constitutional arrangements and will not be abolished without a decision of the people of Wales. It is also declared that the UK Parliament will not normally legislate with regard to devolved matters without the consent of the Assembly, whilst retaining the sovereignty to do so.

The Act devolves further powers to the Assembly and the Welsh Ministers in areas where there was political consensus in support of further devolution. These include:

  1. Devolving greater responsibility to the Assembly to run its own affairs, including deciding its name;
  2. Devolving responsibility to the Assembly for ports policy, speed limits, bus registration, taxi regulation, local government elections, sewerage and energy consenting up to 350MW;
  3. Devolving responsibility to Welsh Ministers for marine licensing and conservation and energy consents in the Welsh offshore region; and extending responsibility for building regulations to include excepted energy buildings;
  4. Devolving power over Assembly elections; and
  5. Devolving powers over the licensing of onshore oil and gas extraction
  6. Aligning the devolution boundary for water and sewerage services along the border between England and Wales.

The most interesting provision from a Legal System perspective is that the Wales Act provides for establishing in statute a President of Welsh Tribunals to oversee devolved tribunals and allowing cross-deployment of judicial office holders. This could be the first step in the development of a more distinct Welsh legal system.

The Wales Act 2017 is at http://www.legislation.gov.uk/ukpga/2017/4/introduction/enacted

 

For recent comment on the possible development of a distinct system of justice in Wales, see the report of the Justice in Wales Working Group at http://sites.cardiff.ac.uk/wgc/files/2017/09/Justice-in-Wales-Working-Group-Report-Final-2.pdf, and the work of the Welsh Governance centre on Justice in Wales: http://sites.cardiff.ac.uk/wgc/justice-in-wales/

Written by lwtmp

October 6, 2017 at 1:04 pm

Posted in Chapter 3

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Reform of the European Court of Human Rights

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In 2012, in Brighton, decisions were made to reform the ways in which the European Court of Human Rights operate. I note in the book (Chapter 3) that progress is likely to be slow. In fact the main recommendations of the Brighton Declaration have been implemented. Although there was a dip in the numbers of cases coming before the Court in 2015, numbers have subsequently increased. Thus the principal problem  – delay – which the Brighton Declaration sought to address has not been resolved.

Those interested in the process of reform of the European Court can, however, follow recent developments at the following website which sets out documents showing what has been done.  It is revised as and when new information is made available.

See http://www.echr.coe.int/Pages/home.aspx?p=basictexts/reform&c=#n13740528735758554841286_pointer

 

Written by lwtmp

October 5, 2017 at 3:08 pm

Posted in Chapter 3

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Keeping up with Brexit

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Whatever your views on the wisdom of the UK leaving the European Union, the process of leaving has started and is due to be completed by March 2019. At least, that is the date by which the European Union (Withdrawal) Bill is due to have completed its Parliamentary process. How long any transition period will be after March 2019 is not yet decided.

There is considerable debate in the media about the whole process with fierce political arguments continuing to rage about the process and what would constitute a desirable outcome.

One thing is crystal clear; the process is not going to be easy. There is a vast amount of detailed technical argument to be had before agreements are reached; and once agreements are reached a vast amount of technical work to translate the terms of those agreements into effective legal force.

It is hard for those interested in what is going on to know where to turn for information. The Government is trying to help by bringing together all the policy, future partnership and other documents it has published which relate to Brexit. A collection of these can be found at https://www.gov.uk/government/collections/article-50-and-negotiations-with-the-eu. This list will be continually added to as discussions with the EU progress.

It will be seen that there are many issues in the list of matters to be decided that will affect the English Legal System.

Of course at the moment, these documents represent what the UK Government would like to achieve. Whether it will be successful will depend on the outcome of the negotiations currently in progress.

The process seen from the EU side can be found by going to https://ec.europa.eu/commission/brexit-negotiations_en which sets out materials arising from the negotiations led, for the EU by M Barnier.

 

 

 

 

 

 

 

 

 

 

 

 

Written by lwtmp

October 4, 2017 at 12:07 pm

Posted in Chapter 3

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Employment Tribunal fees: back to the drawing board

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Until the coming into force of the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013,  a claimant could bring and pursue proceedings in an Employment Tribunal (ET) and appeal to the Employment Appeal Tribunal (EAT) without paying any fee.
The Order created a somewhat complex fee tariff in which different fees were paid, depending on the type of action being brought before the tribunal. In addition, a fee had to be paid at the start of proceedings, another when the case went to a hearing. Poor claimants who fell below defined income and capital limits could get their fees remitted.
The Government’s objective in imposing the fees were said to be
(i) Financial: to transfer a proportion of the costs of the ETs to users (where they
can afford to pay);
(ii) Behavioural: to encourage people to use alternative services to help resolve
their disputes; and
(iii) Justice: to protect access to justice.getting a better balance between what the taxpayer funds and what the litigant funds.

An official review of the impact of the fee changes, published in January 2017 concluded that, broadly, these objectives had been achieved. (See this blog, February 2017)

The Supreme Court has, however, come to a quite different conclusion. In R (on the application of UNISON) (Appellant) v Lord Chancellor (Respondent) [2017] UKSC 51, the Court concluded unanimously that the Fees Order was ultra vires (that is to say that the Lord Chancellor did not have the power to make the order) and so quashed it.

There are at least three reasons why the judgements in this case are particularly interesting.

First, in most cases where the validity of a Statutory Instrument is challenged in the courts, the argument turns on fairly precise questions of statutory interpretation – were the rule-making powers in an Act of Parliament sufficient to give the relevant Minister the power to make the order being challenged?

In this case a much broader, constitutional approach was adopted. The essence of the argument was that the impact of the Order was so dramatic (the numbers of cases coming to both the ET and the EAT had fallen dramatically since the introduction of the fees) that they had the effect of denying potential claimants access to justice.Lord Reed, in the principal judgement, refers back to a number of historic legal texts, including Magna Carta, to conclude that it is a constitutional principle recognised in common law, that people should have access to justice.

Second, the judgement relies heavily on a number of empirical studies to show that the effect of impact of the fees rules was quite disproportionate. Using hypothetical examples, the Justices conclude that ordinary people on average earnings would have to forgo weeks if not months of expenditure on anything other than the most basic necessities to save the money needed to pay the relevant fees. The Court decided that the fees thus imposed a quite disproportionate burden on those who might have an arguable case to take to the ET or EAT. Certainly the cosy conclusions of the impact review, mentioned at the start of this note, were totally rejected by the Supreme Court

Finally, Lord Reed makes a number of  interesting and important observations about the rule of law and the functions of courts and tribunals in supporting the rule of law. (See in particular paras 66-85 of the judgement). Here I set out brief extracts from the judgement:

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. [There is an] 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”.
[However] …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….
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.
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….
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….
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….
The Justices accepted that a system of fees that had the objectives set out above – of reducing the cost to the tax payer, encouraging settlement and deterring weak cases – were quite lawful. But they concluded that in this case the fees structure had gone too far. In addition they noted that the practical outcome of the fees imposed by the order was to result in a significant reduction in the money being paid into the system by parties to proceedings. In short, the price for access being charged was too high for the Government to be able to achieve its principal objective of increasing revenue into the court/tribunal system.
It seems clear to me that the Government will not abandon its fees policy – either in relation to ETs and EATs, or indeed to other parts of the courts and tribunals system where fees are imposed. But those devising future schemes will have to take into account considerations that go well beyond those that were initially taken into accounts by Ministers and their civil servant advisers.
The full text of the judgement is at https://www.supremecourt.uk/cases/docs/uksc-2015-0233-judgment.pdf
The press summary is at https://www.supremecourt.uk/cases/docs/uksc-2015-0233-press-summary.pdf

Written by lwtmp

October 1, 2017 at 3:22 pm

Posted in Chapter 3, chapter 6, Chapter 8

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