Arbitration the solution?
13 August 1996
Michael Zander (The Times 6 August) is wise to question the feasibility of Lord Woolf's proposals. Although it is a truism to say that the legal issues and evidence in "low value" cases can be just as complex and troubling to resolve and obtain as in 'high value' cases, the real issue is: who pays for civil justice? Society, litigants, practising lawyers, or a combination of all three?
Imposing artificially brief time limits or low costs on solicitors, and to a lesser extent on the Bar, is only a diffuse way of saying the Legal Profession charges too much for what it does and must do more for less. The view that there is this 'slack' in the system is one that prevails all too readily in the media, and, one suspects, to some extent in those far removed from the coal face.
We live in a high wage economy. Properly prepared litigation cannot be conducted without the appropriate hours of work that a case needs. But the proposed reforms broadly intend to shift the disparity between the real costs of a case and the notional costs dictated by the court, on to solicitors, most of whose margins, in the case of high street practitioners, are pretty thin already.
The result, with all it implies for access to law, will be the financial inability of an already straightened profession to fund the new system. Where will conditional fee cases stand when the costs equation becomes even less attractive than it is now?
The equation is one of cost benefit. At what level of case value is it worth paying for a lawyer? We speak of costs of £2,000 to £3,000 as though that is some enormous amount, but that is unfair to the profession. It is only the inflated £200 to £300 of 20 years ago; quite often the amount that a family of four will spend on an annual holiday, or a fraction of what many people pay for a car. It cannot finance the 30 to 40 hours' work by several people in an average solicitor's firm that an even modestly complex civil case requires. It does not finance a single judge's salary for two weeks.
There is a simpler, practical and more cost-effective solution than the 'fast-track' approach. Lift the arbitration threshold to £25,000 - the price of a good quality car - and parties can then, if they wish, employ a solicitor at their own expense and judge the cost benefit equation themselves.
There are many senior members of my profession who would be both happy and able to conduct arbitrations as deputy district judges which would give a flexible response to case demand without the need for, or cost of, permanent appointments.
A graded hearing fee would amply cover the fee to such deputies. Parties will have their day in court and it will not be artificially constrained by rehearsed paper arguments. They will not be at risk of bearing the burden of opponent's costs, thus creating a more level playing field between large corporations and individual citizens.
The profession will be paid no more than the market thinks a case is worth because there will be no prospect of loading costs onto the other side.
And the vast majority of civil cases would be dealt with under such a threshold, reserving our 'gold-plated' and labyrinthine procedures for those cases where the real value of the matter justifies the time put in by properly qualified persons.