Martin Partington: Spotlight on the Justice System

Keeping the English Legal System under review

Archive for the ‘Chapter 8’ Category

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

 

 

 

 

 

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Written by lwtmp

October 19, 2017 at 3:05 pm

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

Queen’s Speech 2017 and the Parliamentary session: 2017-2019

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The  draft legislation relating to the exit of the UK from the European Union is going to be extremely complicated – both in terms of the technical content of the proposed measures, and in terms of the political controversies that the legislation will attract, arising from the fact that Mrs May is leading a minority Government in the House of Commons and that there is a great deal of opposition to Brexit in the House of Lords.

The Government has therefore decided that, exceptionally, the current Parliament should last for two years rather than more normal one. Thus the next Queens Speech, following that  delivered in June 2017, will not be made until May 2019.

In addition to the raft of measures required to deal with different aspect of Brexit, the 2017 speech contained annoucements about two measures that will have specific impact on the English legal system.

  1. “Legislation will  be introduced to modernise the courts system and to help reduce motor insurance premiums.” This will not actually be wholly new. The measures relating to court reform and insurance premiums were originally contained in the Prisons and Courts Bill 2017, which fell when the 2017 General Election was called. The revised version of the new Bill has not yet been published but may be anticipated in Autumn 2017.
  2. “To support victims, my government will take forward measures to introduce an independent public advocate, who will act for bereaved families after a public disaster and support them at public inquests.” This is a reform that has long been called for. The details of this measure are not yet available.The Queen’s speech may be read at https://www.gov.uk/government/speeches/queens-speech-2017

 

 

 

 

 

Regulation of Claims Management Companies: The Financial Guidance and Claims Bill 2017

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In March 2016, the Government announced that it planned to change the ways in which the regulation of Claims Management Companies is organised.

At present, this work is undertaken by a special unit within the Ministry of Justice. What is planned is that this work should be transferred to the Fincancial Conduct Authority – which has broad regulatory oversight of the financial services sector.

In the Financial Guidance and Claims Bill, which was published in June 2017, legislative proposals have been set out which – when the Bill is enacted – will achieve this objective. Clauses in the Bill will make amendments to the Financial Services and Market Act 2000 to enable the Financial Conduct Authority to regulate claims management company activity as a ‘regulated activity’ under the Act.

In addition, clauses in the Bill provide for the transfer of complaints-handling responsibility from the Legal Ombudsman to the Financial Ombudsman Service. This will allow the Financial Ombudsman Service to take over jurisdiction to investigate and determine consumer complaints about the service provided by the claims management companies.

The Financial Conduct Authority will also be given power to impose a cap on the fees that claims management companies can charge for their services.

These seem to me sensible reforms which should offer better protection to consumers who use Claims Management Companies and to protect companies against malpractice by those companies.

The Bill has started its progress through Parliament. I anticipated the measures will be enacted sometime in 2018, with implementation shortly thereafter.

The Bill can be viewed at https://publications.parliament.uk/pa/bills/lbill/2017-2019/0001/18001en03.htm

Recent annual reports on the work of the Claims Management Regulator can be found at https://www.gov.uk/government/collections/claims-management-regulator-annual-reports

 

 

 

Written by lwtmp

August 26, 2017 at 11:07 am

Business and Property Courts

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The creation of the Business and Property Courts was noted here in April. From 4 July 2017 a series of events is being held in court centres around the country to launch the new Courts. The Courts will become operational from 2 October 2017.

The existing courts being brought together under the single umbrella are:

  •  The Admiralty Court.
  •  The Business List
  • The Commercial Court (covering all its existing subject areas of banking and finance, shipping and insurance, trade and energy, and international arbitration, as well as the Circuit Commercial Courts, formerly Mercantile Courts.)
  • The Competition List.
  • The Financial List (covering banking and financial markets).
  • The Insolvency and Companies Court.
  • The Intellectual Property List (Including the Patents Court and the Intellectual Property and Enterprise Court, the “IPEC”).
  • The Property Trust and Probate List.
  • The Revenue List.
  • The Technology and Construction Court (covering all its traditional areas of major technology and construction cases).

For further details see https://www.judiciary.gov.uk/announcements/launch-of-business-and-property-courts/

Written by lwtmp

July 8, 2017 at 3:45 pm

Prisons and Courts Bill 2017: new version awaited

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One of the casualties of the calling of the General Election in June 2017 was that the Prison and Courts Bill 2017 was lost – i.e. failed to complete its Parliamentary process.

I have noted in earlier blogs the key features of this important legislation, both in relation to the reform of the Prison Service and to the Civil Justice system. It also planned to deal with rules relating to whiplash injuries (see entries in Spotlight on the Justice System 8 March 2017.)

It is clear from announcements in the Queen’s speech – delivered in June 2017 – that the Bill will be introduced, not necessarily in the same form but with the same policy objectives in mind.

For the moment, therefore, plans are on hold (though civil servants are actively working on the assumption that eventually they will get the new legal powers they need to introduce the proposed reforms.)

I will give further details when the new Bill is published.

Changing the small claims track

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In November 2015, the Government announced that it planned to increase the small claims limit for personal injuries to £5000. Following a consultation on making reforms to soft tissue injury claims (often referred to as whiplash injury) the Government has now (March 2017) decided that while Road Traffic Accident claims for less than £5000 should stay in the small claims track, the small claims limit for other personal injury claims should become £2000. It plans that these new limits should be in effect by October 2018.

The Government is also intending to ban the settlement of whiplash claims unless  medical evidence  is provided of the alleged injury.

For details see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/593431/part-1-response-to-reforming-soft-tissue-injury-claims.pdf

Written by lwtmp

March 29, 2017 at 3:14 pm