Do you think that the courts offer the best means of dispute resolution?

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1 Introduction Since the formation of the modern British legal system, the courts have often been accepted as the main system of dispute resolution. In some instances, namely defamation cases 1, the court procedure is necessary in order for the case to come to a fair and legally acceptable conclusion, but in many other cases, it could be seen as a complete waste of time to bring a case to court. The general idea of court dispute resolutions has been discouraged since the arrival of the Woolf Report in 1999, whereby a set of civil procedure rules were set onto the Supreme Court, Court of Appeal, and County Courts in order for all civil court cases presented there to be operated in a fair and indiscriminative way. The reports By Woolf suggested a number of alternate resolution processes and Judges are now encouraged to promote these when presented with a civil dispute case. In this essay I will explore all elements of the civil court procedure and how they can be effective in way of producing a fair a democratic result, I will also investigate the various examples of Alternate Dispute Resolution (ADP) such as negotiation, mediation, and arbitration. I will explore the different elements of the civil justice system that employ these alternate systems and discuss the disadvantageous elements of the court procedure that, in many respects, can be time consuming and costly. The Woolf Reforms Since 1999, the civil justice system has been largely reformed in terms of accessibility and equality through instruction of the Access to Justice 2 put forward by Lord Woolf. In essence, this report instructed all civil courts to change their operations in order to make the legal system more accessible and fair for those who need it, he felt that court cases were far too expensive and somewhat confusing for the common individual. Research gathered during his review found that one side s cost exceeded the amount in dispute in over 40 percent of cases where the claim was for under 12, Facts such as these showed Lord Woolf that the civil courts were not being fair in the way in which they litigate, and were far too inaccessible in terms of affordability and resources, Woolf could clearly see that none of the targets put forward in the 1996 report had been met and he still regarded the system as being unequal, slow expensive, and complicated 4. Once he has seen the full extent of his research findings, Woolf proposed a further report containing 303 recommendations on how the civil justice system should be reformed in order for it to meet his ideals, these included: fast- track system for cases up to 10,000, extending small claims cases to 1 Defamation cases often involve a large number of legal technicalities which require deeper points of law than can be obtained and utilised by Inferior Judges and the lower courts, therefore most cases of defamation are instantly referred to the High courts. 2 The Access to Justice report was put forward by Lord Woolf in 1996 after his research into the British civil procedure returned dissatisfactory results. He set about to change the ways in which civil cases are handled and his points were eventually put into action in the Woolf Reforms in His ideas presented in the report were also seconded by Middleton reports (1997) put forward by the Labour government. 3, Elliot & Quinn, The British Legal System. Jacqueline Martin, 2010 Page1

2 3,000, simplifying a number of court procedures, and encouraging Judges to recommend the use of alternate dispute resolution methods when presented with such a case. Countless other recommendation targeted the extremely high court costs and somewhat pointless procedures that made the civil court service inaccessible to a huge majority of the British population, instilling a radical sense of change which has, and still continues to affect the legal system today The Civil Court Procedure The civil court system is split into three tracks, each track has its limitations on the size and profile of the case that it may hold, generally in terms of the amount of money and compensation involved but other factors are taken into account. Each track takes place in a different court, with diverse procedures and each coming to a significantly different conclusion. The Small Claims Track Owing to the comparatively minute sums of money involved in small claims cases, it is vital that the court procedures surrounding them are cheap, quick, and simple for all involved, if these recommendations are not met by the court then the overall costs of the courtroom procedures may outweigh the resulting sum of the dispute. This claims track was put in place in county courts in response to a report from the Consumers Association in who claimed that the county courts were being used primarily as a debt- collecting agency for businesses: 89.2 per cent of the summonses were taken out by businesses and only 9 per cent by individuals, who were put off by costs and complexity 6. Cases on the small claims track can go upwards of 1,000 depending on their severity and complexity, the most high profile of these cases traditionally being personal injury lawsuits. As a large majority of small claims cases are relatively low in complexity, claimants are advised to avoid costly lawyer s fees by representing themselves, aside from the financial advantages, this course of action does bring with it an array of problematic elements. Firstly, some cases may still involve a number of legal points and technicalities which could be difficult for a non- lawyer to understand, but if the case is still too small to require any type of legal representation then the claimant may have no choice but to self- represent, this fact providing further evidence against the use of the courts in small dispute matters. If one party does decide to use a lawyer then should they win the case, the legal costs cannot be recovered from the losing party, this could mean that the concluding court costs would outweigh the amount claimed. According to the Ministry of Justice, the losing party can only be ordered to cover the legal fees of the winning side if the sum does not exceed The losing party can also be ordered by the court loss of earnings compensation to any witnesses who had to leave their workplace in order to hear or appear at the court, however, much like that of the legal costs, they can only be forced to pay a sum that does not exceed 50 per 5, Elliot & Quinn, Cases & Materials on the English Legal System, Zander, The directory of practices surrounding the small claims track provided by the Ministry of Justice. Providing citizen with advice regarding cost, procedures, representation, and a number of other case information points. Page2

3 day for each witness required 8. In terms of appeals within the small track system, there is little in the way of rights for the losing party, something which has been addressed but the Lord Chancellor s Department in recent years. The allowance of appeal is granted by the Judge on the case and they can only grant an appeal on the grounds that the court has made a mistake regarding a specific point of law, there are no other grounds of appeal and these strict regulations result in a fairly low appeal rate. According to various sources, approximately 5,000 cases are appealed per year in the UK in proportion the 80,000 small claims track cases heard by the civil courts, leaving a meagre 6.25% appeal rate. These low rates of appeal have given way for arguments that the limited grounds of appeal could in fact be in direct breach of the 1998 Human Rights Act 9. The advantages of the small claims track mainly revolve around accessibility to the common individual; the effects of investigations such as the Woolf Report 1996 have allowed for this and may other changes to the British legal system. One of the main advantageous points of this track is the relatively low cost for both parties as they do not necessarily have to utilize the skills of a Solicitor or Barristers and may prepare and present their case independently. These points are advantageous to the losing side as well as they do not have to pay any legal fees to their opponent (unless the sum is of 260 or less, which in most cases where a lawyer is involved, is extremely rare indeed). The procedure in itself is relatively quick, with most cases being heard and resolved within a month of a claim form being received by the court office, this is of obvious benefit to both the parties involved and the exceedingly overworked county court system. The disadvantages of the small claims track are outweighed by the positive points, but are still problematic for all those involved. Firstly, for any claims that exceed 1,000 a 100 allocation fee is required in order for it to be put forward to a judge; this amount does in effect lessen the amount up for dispute. Although small claims do not generally require any legal aid, it would be extremely difficult for a finically unstable individual to pull up a case against a high- value business who would be able to utilise a lawyer, research (Jack Baldwin) has shown that a worryingly large amount of District and Country judges are discriminative against claimants who are not represented by a lawyer of any description. Aside from these problems, the main disadvantage that accompany small claims cases is the retrieval of the payments from the losing side, there is no guarantee that winning a case will get you the full sum that you claimed for as the courts cannot force a party to pay if they claim that they do not have the sum in full. Research has shown that only 60% of successful claims are fulfilled, leaving the claimants without the money they sought, and possibly large legal fees that outweigh the initial sum. The Fast Track The fast track system was one of the principal proposals put forward by the Woolf report in 1996, allowing for cases that involve fairly large monetary sums to be dealt with in a quick and effective manner. Claims of between 5,000 and 25,000 are referred to the fast track in the hope that they 8 Ibid htm Page3

4 will be resolved in a relatively short amount of time and without the need for complex legal procedures, the system provides strict rules regarding the time scales used for statements, disclosures and the final verdicts of each case. Research conduction pre show that the average wait for cases in the county court was 85 weeks from the issue of claim to the actual hearing in court 10. Aside from the extremely large waiting times, the Woolf report also discovered that many final court fees far outweighed that of the initial amount claimed. Post 1999, the fast track system ensures that actual court hearing should be conducted no later than 30 weeks after the claim has been issued (a 65.5 % improvement since pre- 1999). Once the case has been presented to a District Judge at the county court, the will then decide whether it has the required criteria in order to be sent to the fast track. If the case has been transferred to the fast track, then the timetable of proceeding will be created by the court. A typical example of a timetable that a court may give is: Disclosure: 4 weeks Exchange of witness statements: 10 weeks Exchange of experts opinions: 14 weeks Hearing: 30 weeks 11. These strict timetables are put in place to not only reduce delays and waiting times for court hearings, but to eradicate wasted time and unnecessary legal costs from both sides of the case. In regards to the current waiting time for a fast track claim court hearing, investigations in 2008 showed that the wait was roughly 48 weeks, a large improvement of nine- months from the pre- Woolf era but still a considerably long time to wait for a trial that is supposed to be a fast track. The actual case under the fast track system is restricted to one day, the Judge would generally have to have prepared for the case and produce a legally acceptable verdict within this time limit. Fast track cases will generally be heard by a circuit Judge in a more formal open court, this hearing style is fitting to the financial sums and sometimes complexity of fast track civil claims cases. Multi- Track Cases Should a claim of 25,000 or more in value arise, it would generally be allocated to the multi- track court system that operates throughout County and High Courts in the country. A Circuit Judge will handle the case and will be expected to do so from the moment it is transferred to the system, until the final verdict/conclusion is met. For cases that involve financial sums of more than 50,000, the High Court is a must. Much like that of the fast track system, the Judge is encouraged to set strict timetables and scales in order to avoid the risk of cost accumulation and wasted time, they can also ask the parties to attempt alternate dispute resolutions (ADR) should they feel that the case could be handled in a much more conservative way outside of the courts. The court is required to investigate any issues that could hold back the case at an early stage in order to obey the timetables 10 The British Legal System, Jacqueline Martin, , Elliot & Quinn, 2002 Page4

5 set, the various Judges presented with the case must decide whether it could in fact be resolved by ADR instead of in court, it is also suggested that the courts utilize all available forms of modern technology to move the case along as fast as possible. Multi- track cases are controlled and run in an extremely efficient way, and relatively quickly with the exception of heavier cases which require pre- trial reviews and management conferences in order to analyse the different issues raised. The problems with Civil Court Hearings The Adversarial Process Obviously, each and every civil court case has to produce a winner and a loser, this plus the stressful and aggressive environment of the courtroom can cause conflict between the two parties. This conflict can be extremely disadvantageous in cases that involve family members (e.g. child custody cases) as the two parties are unable to resume the peaceful communication needed after court hearings. These issues are the most prevalent in family- orientated disputes, but can also have an effect in business cases whereby the two parties become enemies even if they started out with a perfectly stable relationship before the case. In employment cases such as unfair dismissal, it obviously of great importance for the employer and employee(s) involved to regain their relationship after the case should the employee win and regain their job position. Although this is an ongoing issue with many civil cases, the Courts insist that their system is best suited for strangers and parties who have no prior relationships due to the aggressiveness involved, implying that all cases that involve business or social relationships should be resolved out of the courts. Technical Cases In many respects, a large number of civil cases involve technical and somewhat specialist business, scientific, and legal points, leaving the court system with a dilemma. A large proportion of Judges are unable to hear and pass judgement on cases of which they do not understand fully nor have the required qualifications, cases that involve healthcare and medicine (i.e. medical negligence)* 12 are prime examples of where more qualified professionals are called into the court procedure to ensure that all issued raised are dealt with in the correct and fair manner according to that particular profession. Calling in a specialist advisor is not only time consuming, but exceedingly expensive as many doctors and medical experts would most probably charge for their time in the court, this would add further depth to a case that could have been settled is a more simple and cheaper way out of the court. The Woolf reforms suggested that these cases in particular could be better settled 12 An example of a Medical Negligence case is June Greenhorn (A.P.) v. South Glasgow University Hospital Trust [2008] CSOH 128 where a surgeon made a near- fatal mistake during surgery, a number of medical experts had to be called into the courtroom to pass judgement on various pieces of evidence and testimony. Page5

6 through methods such as arbitration, as a specialist could be chosen in place of a Judge to oversee the proceedings, therefore making the process cheaper and quicker for all involved. Inflexibility In cases that are put onto the fast and multi- track systems, the strict timetables produced by the courts can be restrictive for parties involved, particularly companies who cannot afford to attend inappropriately- timed hearings. The timetables can be somewhat intrusive and inappropriate in cases where private affairs and concerns are being addressed, it could be seen as unfair and un- democratic for the courts to remove all control from the claimants and defends, even though the two parties are come to form the foundations of the case. In order to avert these issues, alternate methods have been implemented and allowed should the courts feel that the case requires them, allowing the parties involved to take more control over the time and dates of the various hearings. Publicity In civil law, a huge amount of cases involve businesses, from small companies to international industries, most of which would desire to attain a sense of privacy throughout all areas of their work. Court cases, being open to the public, do not always prove the level of privacy that companies yearn for as they feel it could be dangerous for their reputation. Large multi- national companies have huge business and public reputations that they cannot afford to taint or loose in cases that have been made public, this is understandable in many respects, but the courts refuse to keep any British case private. A prime example of a huge (public) case is the Apple Inc. V Nokia UK case set to being in 2010, whereby Nokia UK plan to claim approximately 900million from Apple Inc. for supposed patent infringements 13. The two companies are extremely powerful in their industries and therefore hold high reputations, the media surrounding the case is already an example of the lack of privacy in court cases in the UK and indeed worldwide. Alternate Dispute Resolution methods (ADR) For a large variety of reasons, some of which are explained above, the court system is not heavily advised for civil cases. As a result of this and the 1999 Woolf Reforms, a number of Alternate Dispute Resolution methods (ADR) were put in place to allow cases to reach a resolution without the need for the courts. Each ADR method is different and effective for a specific case type, and are all a great deal easier and cheaper than going through the various court systems, therefore advised by many lawyers and indeed Judges within the UK. Mediation Should this method of ADR be chosen by two parties, a neutral 3 rd party (a mediator) is brought in to oversee and try to negotiate compromises that can lead to a positive result for both sides. In his 1996 report, Lord Woolf described mediation as a form of facilitated negotiation and the British 13 Rupert Neate for the Telegraph, July 2010 Page6

7 government proclaimed that it was a cost- effective means for families to resolve and agree on a number of issues occurring during the aftermath of a marriage breakdown 14. The mediator would most probably have a level of legal training, however anybody could be given the position and some solicitors are known to take on mediation work alongside their careers. The job of the mediator is to advise both sides of the party on how strong their case is, what their next course of action should be, and what they could compromise in order to come to remotely civilized conclusion, the only thing they are forbidden to do is give their opinion to one of both sides as this could be viewed as biased in some cases. Mediation is chosen by many disputing parties as is has somewhat the same effect as the court, without the large costs and technicalities, the results of mediation can be legally binding should both of the parties involved agree on an acceptable compromise. Despite being used to avoid court, mediation can lead cases to an in- court conclusion, but as most of the issues have already been resolved, the court process is quicker and a lot simpler. Mediation is becoming the most common form of ADR for business and corporate disputes, with the CEDR reporting a 35% increase in the number of cases being referred to the method since 2003, with the lower costs being the main focal drawing point for money- tight businesses. The primary advantage of mediation is that it can be used in way of a court hearing, allowing disputes to be settled quicker, easier, and much cheaper than those taken to court. As the courts are not involved, privacy is restored, making this method of ADR extremely popular for commercial cases of all size and importance. Although there is no set guarantee of success, the Centre for Effective Dispute Resolution (CEDR) ran investigations showing that 80% of mediation- operated cases are successful 15, proving that this method of ADR is definitely one of the preeminent court system alternatives. The only largely relevant disadvantageous element of mediation is the cost. Mediators can cost anywhere upwards of 1,200 to 3,000 per day, although massively cheaper than court fees (which can rise up into hundreds of thousands and even millions in some cases) the costs are still relatively high compared to other methods of ADR. These costs could mean that mediation is perhaps not the best course of action for general individuals but most definitely for businesses who want a simple and effective settlement. Negotiation This is seen as the quickest, cheapest, and most simple method of ADR that exists with the British legal system today, it is controlled in terms of costs and time scales, and most importantly completely private. Negotiation involves the two conflicting parties communicating directly with one another in order to negotiate in a more informal manner, with or without the help of lawyers. If the two parties decide to engage in negotiation then it shows that they are willing to work together to work out a collective advantage for both sides, without the need for aggressive and time- consuming court hearings, it allows the two sides to remain a working relationship without the risk of further conflict. Generally, negotiation will start off entirely privately between the two sides, they will 14 Cases and Materials on the English Legal System, Michael Zander, Page7

8 attempt to discuss and come to conclusion to suit one another, if this is achieved then the dispute can be solved without any financial wastage or friction between them. Most negotiation cases end easily with a group resolution, but some (namely commercial disputes) cannot be resolved by simple negotiation across the table and the need for solicitors and legal aid arises, this is where the costs of negotiation can start to rise. Because of the huge number of cases that go to negotiation methods, the Conciliation and Arbitration Service (ACAS) was set up in order to mediate many industrial disputes and unfair dismissal cases 16. One of the main advantageous aspects of negotiation is the fact that it is entirely private within the two parties, allowing for them to control all aspects of the dispute, and the communication between the opposing sides means that there chance of them still maintaining a good relationship afterwards. Negotiation seems the perfect ADR method for those who only wish to settle small disputes without any costs, but if a settlement cannot be reached then the need for solicitors will rise, as will the costs. Conciliation In effect, conciliation is very similar to mediation in the way that it operates; the only difference between the two is that the conciliator between the two parties is able to take a far more active role than a mediator is permitted to. The conciliator is able to advise the two parties and make suggestions on how they think the case should move forward in order to gain the best results possible, unlike meditation where the mediator has no control over what is discussed over the table. Much like other ADR methods, conciliation is used frequently in commercial and industry cases, and provided by the advisory, conciliation, and arbitration service (ACAS) to ensure that companies obtain access to effective and impartial legal advice. One of the only disadvantages of conciliation is that there is little or no legal standing behind the conciliator or the decisions and conclusions made, the conciliator cannot call upon any witnesses or use legal evidence such as testimonies, therefore the conclusion found will not always be legally binding and could simply disband into further disputes. Arbitration Unlike other ADR methods, arbitration has a larger sense of legal ties behind it and is preferred by those who want to come to a legally- binding result without having to attend court. In order to arbitration to occur, the two parties must agree to allow a 3 rd party to make a decision on their dispute based on points of law and the details of the dispute. The 3 rd party may be a lawyer or an expert in the field depending on the specific case, and they will make an educated decision based on their expertise and the case details. Private methods of arbitration are controlled by the Arbitration Act 1996 which states the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense. The parties should be free to agree however their dispute should be resolved, subject only to the safeguards of public interest 17 in short terms, this 16 Cases and Materials on the English Legal System, Michael Zander, The British Legal System, Jacqueline Martin, 2010 Page8

9 means than the two parties are free to pass on their dispute to a 3 rd party in order for them to come to a fair verdict. In most cases, the decision of the arbitrator is final and cannot be disputed further by either side, however some (non- binding) arbitration methods can be used in a similar way to mediation, where the parties will take on board the thoughts and advice of the 3 rd party but do not necessarily have to obey their verdict. The advantageous points of arbitration are extremely important in defining it as an effective method of ADR, one of the main points is that the parties have full control over who is their arbitrator, unlike in court where they are appointed a particular Judge. This allows them to choose on the basis of their dispute details, for example they may wish to choose a specialist of some description if they feel that they will have a better understanding of their issues. It is also a very private method of ADR, very much unlike court, therefore a primary choice for companies who wish to uphold their consumer reputations. However, there are a number of issues with arbitration; first is the problem of legal aid. Should a generic individual make a claim on a large commercial company, then they face the chance of attempting to argue against a lawyer whom the company is able to pay to represent them, significantly lowering their chances of winning the case. Secondly, some parties are forced into arbitration should they sign a contract containing a Scott V. Avery clause, which is implemented by companies in contract small print to ensure that any claim against them is settled through arbitration rather than any form of court litigation. Examples of ADR Cases Conciliation in unfair dismissal cases In order to ensure than employment cases of this nature are settled before the courts and tribunals become an option, ACAS administered a statutory conciliation scheme 18 whereby cases are to be settled quickly and effectively by simple damages payments. Conciliation is used in unfair dismissal cases for a variety of reasons, besides the low costs and time wastage, it allows the employer and employee to maintain a respectful relationship once the case has been settled, something that is vital in all aspects of employment. Studies have shown that 66% of cases such as these are resolved or withdrawn by conciliation, proving its effectiveness. Mediation in Divorce Cases Both Lord Woolf and the British Government claimed that mediation was the most financially and socially effective means of ADR for the resolution of issued raised during the downfall of a marriage (i.e. child custody). It was concluded that the lack of stressful and intimidating court hearings allowed the parents to communicate effectively and maintain a good relationship, something that is 18, Elliot & Quinn, 2002 Page9

10 crucial for the welfare of any children involved. A three- year study on 1999 civil court reforms showed that 8 out of 10 divorce cases came to some sort of conclusion through mediation, whilst 4 out of 10 were fully successful in resolving their differences. The Family Law Act 1996 requires divorcing couples to seek alternate means to the court system, namely mediation. Conclusion As with many other aspects of the legal system, the answered to these questions posed are based entirely on personal opinion and the specific details of the cases involved. One cannot say for certain that the courts offer the best means of dispute resolution; the same could be said for ADR. It could be argued that despite accumulating large costs and time- scales, the court system is the most powerful of all the dispute resolution methods and therefore achieves the best results for those who need a legally- binding conclusion. It could however be argued that the low costs of ADR methods make it far more accessible to individual claimants who cannot afford high levels of legal aid and court fees, and that the methods allow for more direct communication between the parties, something the courts cannot offer. However, ADR methods do no guarantee the best results, and in some cases, do not guarantee the winner what they should rightfully receive, something that the powers of the court can solve somewhat effortlessly. It is clear that ADR is the quickest, simplest, and cheapest method, but these facts depend entirely on the size and severity of the case, and most importantly in terms of civil cases, the sums of money involved. In the largest respects, ADR is the most socially and financially effective method of the two, however a large majority of cases can never be resolved properly without some sort of powerful legal intervention. Works Cited, Elliot & Quinn, 2002 The British Legal System, Jacqueline Martin, 2010 Cases and Materials on the English Legal System, Michael Zander, 2002 The Daily Telegraph The Oxford Law Dictionary Page10

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