Lord Woolf's Access to Justice: Plus ça change…

DOIhttp://doi.org/10.1111/j.1468-2230.1996.tb02694.x
Publication Date01 Nov 1996
AuthorA. A. S. Zuckerman
THE
MODERN LAW REVIEW
Volume
59 November 1996 No. 6
Lord
Woolf%
Access to Justice:
Plus
$a change
. .
.
A.A.S.
Zuckerman"
The one great principle of the English law is to make business for itself. There is no other
principle distinctly, certainly and consistently maintained through all its narrow turnings.
Viewed by this light it becomes
a
coherent scheme, and not the monstrous maze the laity
are
apt to think it. Let them but once clearly perceive that its grand principle is to make business
for itself at their expense, and surely they will
cease
to grumble. (Dickens,
Bleak
House,
Ch
XXXIX)
The Lord Chancellor appointed Lord Woolf in March
1994
to review the rules of
civil procedure with a view to improving access to justice, reducing the cost of
litigation and removing unnecessary complexity. One year later he produced an
interim report, and now the final report has appeared.' Lord Woolf carried out his
task with the assistance of a team consisting of some of the best brains in the Lord
Chancellor's Department, and in consultation with working parties on which all
branches of the judiciary and the legal profession were represented. He also
commissioned some important research. Before the publication of each report, the
ideas of reform were aired in public debates.
As
a result, the two reports and their
annexes consist of the most far-reaching review of civil procedure to have been
conducted in living memory. Their recommendations offer bold and imaginative
devices aimed at reducing the complexity of litigation.
The aim of this paper
is
not to provide a detailed commentary on the Woolf
Report. Rather, the discussion will concentrate on the strategy adopted for reducing
the cost of litigation. It will
be
argued that the cause of excessive cost lies not in the
complexity of our procedure, but in the incentives that lawyers have to complicate
litigation. The Woolf proposals for reducing costs will then be considered. It will
be suggested that the strategy, though admirable in intention and structure,
is
vulnerable to subversion by adverse forensic interests; the self-same forces that
defeated all past attempts at reform. Lastly, the German strategy of fixed costs will
be described and its practical ramifications discussed.
High
costs and their generating process
The cost of litigation in England is unpredictable, excessive and disproportionate.
It seems to make little difference, in this regard, whether the dispute is complicated
*Fellow of University College, Oxford.
The author has received encouragement and assistance from judges and practitioners who might prefer an
anonymous acknowledgement.
1
Access
to
Justice, Interim Report,
(Lord Chancellor's Department, June
1995);
Access to Justice,
Finul
Report,
(London:
HMSO,
1996).
The former will
be
referred
to
as
IR
and the latter
as
FR,
and
references will
be
to
chapters and paragraphs or
to
numbered recommendations.
0
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or
simple, important
or
trivial. Even a dispute which is speedily resolved can
run
up huge litigation costs.2 In commercial cases, the costs may not only be enormous
in
absolute terms, but may themselves lead to further costly litigati~n.~ The trend
of spiralling costs is reflected
in
the inexorable rise
in
the legal aid budget. In the
five years leading to
1995-96,
the cost to the taxpayer doubled to reac)
$1
.4 billion
and is forecast to rise by
$100
million
in
each
of
the next three years. This despite
dramatic falls in eligibility to legal aid. Even members of the judiciary have
become alarmed by the phen~menon.~ District Judge Greenslade, who was
intimately involved in the Woolf inquiry, reports a general view amongst the
numerous persons who attended the
many
seminars organised by the Woolf Inquiry
Team that litigation is too expensive.6
If more
than
impressionistic evidence of the prevalence of this phenomenon
were necessary, it is now provided in a survey
of
litigation costs by Professor Hazel
Genn, which was commissioned
by
Lord Woolf and is annexed to the Final
Re~ort.~ The survey found a lack of proportionality between the value
of
claims
and the costs incurred in prosecuting them, especially at the lower end of the scale.
Among cases
with
a value of less
than
$12,500, in 31 per cent the costs to the
successful party alone were between E10,OOO and $20,000,
with
a further
9
per
cent
incurring costs
in
excess of 520,000. These figures look even worse if one
remembers that about half of the cases were concluded with a consent order and
only one quarter by judgment. Among claims
with
a value of
between
E12,500 and
E25,000, costs as a percentage of claim value range from 41 per cent among
personal injury cases to
96
per cent among Official Referees’ cases. Again, these
represent costs to the winning party alone and refer to cases that were settled, as
well
as
to cases that went to trial.’ Commenting on these figures, Samuel
Issacharoff has written that ‘the transaction costs associated
with
the legal system
[ie the costs to both sides] exceed the merits of the dispute by a factor of two to
one. This absolutely extraordinary level of expenditures means that the legal
system is simply too expensive, too inefficient and too sclerotic to provide a
meaningful forum
for
dispute resolution in the commonplace social interactions
that fall within the confines
of
tort, contract and property.”
2
3
4
5
6
7
8
9
Symphony Group plc
v
Hodgson
[1993]
4
All
ER
143
involved an action to enforce a covenant in
restraint of trade against an employee whose annual salary was about
f
10,000.
The plaintiffs issued
a writ, secured an interlocutory injunction and obtained final judgment, all in just nine weeks. The
cost to the plaintiffs alone was in excess of €100,000.
In
Re Macro (Ipswich) Ltd
[I9961
I
All
ER
814,
a petition under
s459
of the Companies Act
1985
was
tried in court for
24
days, at the end of which the petitioner’s bill
was
f520.000 and that of the
respondent f205,000. Taxation on the respondent’s side was estimated to take
as
long
as
two weeks,
thus leading to further substantial costs.
Striking rhe Balance
-
The Future of
Legal
Aid in England
and
Wales,
White Paper published by
the Lord Chancellor’s Department, Cm
3305 (19%),
para
1.2.
Three years ago, Sir Thomas Bingham
MR
wrote: ‘Day by day we read in the newspapers of the
inordinate cost of litigation, of the congestion to which the courts are subject and, in very recent
weeks, of proposals to cut back the legal aid budget because the costs of legal aid are spiralling out
of control, those increases in legal aid expenditure being apparently due not to an increase in the
number of litigants who are assisted, but to the greatly increased cost of the actions in which they
are
supported‘:
Wilkinson
v
Kenny
[I9931
3
All
ER
9,
11.
‘Objections to Woolf
(1996)
NU
1147.
FR,
Annex
111.
See
also costs statistics in the annual reports of the Legal Aid Board.
It is also to
be
borne in mind that the survey was conducted on the basis of bills submitted for
taxation. Many disputes
are
settled without reference to taxation. It is reasonable to assume that
settlement costs
are
also very high. One is informed by practitioners that it is not unknown for a
dispute concerning a builder’s bill off
12,000,
which is settled, to generate legal fees of more than
half that amount per party.
Issacharoff,
‘Too
Much Lawyering,
Too
Little Law’ in Zuckerman and Cranston (eds),
Reform of Civil
Procedure -Essays
on
‘Access
to
Justice’
(Oxford: Oxford University Press,
1995)
pp
245-246.
774
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