Sir Hugh Laddie: BCCI - where the blame really lies
Legal Week Reports
May 24, 2006 at 08:03 PM
5 minute read
Following the collapse of the Equitable Life and BCCI/Bank of England cases there have been the predictable cries about the cost of civil litigation. Having once sat as the nominated judge in another action brought by the liquidators of BCCI and seen the costs reach stupendous levels, it all seemed very familiar to me. Recent public hand-wringing about the expense was accompanied by finger-pointing. After all, surely someone had to be at fault.
Accusations have been directed at all the usual suspects. Up front are the lawyers. It is assumed that they must have advised their clients that they had a sufficiently arguable case to merit bringing the proceedings. With 20/20 hindsight it can be seen that this advice must have been wrong. It is surprising that this sort of suggestion is advanced at all. In the Equitable case the highest court in the land agreed that the claim was arguable. The same happened in my BCCI case. A large part of the case having been struck out at first instance, the Court of Appeal reinstated it as arguable. In each case a senior court supported the claimant's argument. Is it seriously to be suggested that the lawyers were at fault in telling their clients the same thing?
There also has been much media coverage devoted to judicial criticism of the manners of one of the counsel. Assuming that criticism to be correct, what has it to do with the cost of litigation? If advocates were obliged to treat each other with kid gloves, litigation might be more comfortable, but it would not reduce its duration or complexity.
Then there is the criticism directed at the judiciary, including criticism from current and former senior members of the judiciary itself. This is worrying not because the judiciary should be treated as above reproach – far from it – but because it illustrates blindness to the real cause of the problem.
It has frequently been said that the Woolf reforms, including, in particular, judicial powers of case management, were introduced to reduce the cost and complexity of litigation. It is now said that the expense and duration of these large cases is evidence that judges are not exercising these new powers adequately. To ensure that everyone shares the guilt, it has also been suggested that the Court of Appeal should support case management decisions by lower courts, the implication being that it currently does not.
Well, this is all pretty unconvincing. Take the last point first. I do not think there is any credible evidence that the Court of Appeal has failed to support correct case management decisions of lower courts. Anyone who has seen the Court of Appeal caseload would know that the last thing judges there want to do is to get involved in reviewing the vast number of procedural decisions by lower courts. It restricts itself to intervening only when inferior courts have gone seriously wrong. That is what it should be doing. Furthermore, the overwhelming majority of case management decisions never get to the Court of Appeal because permission to appeal is refused.
So, first instance judges must be at fault. They are not doing their job properly. This is nonsense. Assume for the moment (though I have no reason to believe it to be true) that the judges who were in control of the Equitable Life and BCCI/Bank of England cases were lily-livered souls who would not say 'boo' to a goose and imagine that they had been replaced by one of the most robust judges on the Bench (I won't name candidates). Would the course of the litigation have been seriously changed? I do not think so.
These were large cases with complex issues. What is wrong is the system itself, not the way it is operated. We have an adversarial system which strives for perfection. It is a Rolls-Royce system. Luxury comes at a price. It is adversarial. It involves disclosure and cross-examination – two time-consuming and expensive parts of a civil trial which feed off each other. If anything, the Woolf reforms have made things worse. They create the illusion that the problems have been addressed. But they have not. So, stop blaming the judges and stop blaming the lawyers. The choice is really quite simple. If you want a Rolls-Royce system, do not expect it to be affordable to the majority of litigants. If, on the other hand, you want a legal system more suited to the needs and financial resources of its major users – the litigants – it is time to do what the Woolf reforms should have done but did not. Go back to the drawing board and consider the possibility that the adversarial system is past its sell-by date.
Sir Hugh Laddie, a former High Court judge, is a consultant at Rouse & co International.
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