Chancery courts the future

While the High Court continues to persist with the ancient Chancery Court and Queen's Bench Divisions, many argue that, ultimately, only one will survive.

On the battlefield of legal services reform, the Chancery and its barristers are fighting hard to defend their territory and, for now at least, they appear to be winning.

The Queen's Bench has traditionally dealt with common law matters such as professional and medical negligence, personal injury and contractual issues, while the Chancery has been more concerned with general business law. However, within the Inns of Court, the old divisions of the commercial bar have become increasingly blurred, to the point that it is now almost impossible to list the Chancery's specialist areas of practice. Furthermore, Chancery is winning new friends.

The Chancery law of equity has proved to be a flexible tool in resolving disputes – to the delight of many commercial clients.

The recent high-profile partnership dispute between boxing promoters Don King and Frank Warren is a good example. Chancery barrister Michael Briggs QC defeated leading commercial silk Jonathan Sumption QC – who actually sits as a deputy Chancery judge – by convincing Justice Gavin Lightman that old trust concepts associated with equity law can be adapted and applied to modern business situations.

Barrister Daniel Hochberg of 9 Old Square argues that equity offers the most flexible range of legal remedies. Explaining the advantage of equity law, Hochberg says: “Wouldn't you prefer to have an injunction to prevent the legal action in the first place, rather than get monetary compensation after it?”

Justice Lightman's ruling has enabled barristers to bring Chancery concepts into all sorts of areas, including commercial contracts and sports law.

Effectively, the Chancery has been very adept at stealing other people's work, says one, rather smug, Chancery barrister. He describes the Chancery as “nimble footed” in predicting future boom areas and convincing clients and judges that the issues involved are Chancery issues.

Professional negligence is one area where the Chancery and its barristers are being particularly successful in capturing work.

About six years ago, in what has developed into a huge body of legal work, lenders began taking action against solicitors and valuers for excessive property valuations that were undermined by the recession. This professional negligence work would traditionally be farmed out to common law barristers. However, Chancery barristers stole the market by successfully arguing a slightly tenuous property connection.

The success of the Chancery in encroaching on old legal demarcation lines is reflected in the steady stream of barristers moving from common law sets to specialist Chancery sets such as Wilberforce Chambers. It has put the Chancery in direct competition with leading commercial sets such as One Essex Court.

Hochberg says that in a major business fraud trial, for example, “commercial and Chancery barristers can trade blows with equal force”.

But the Chancery is not only actively diversifying, it is also seeking to cut out the middle man – solicitors.

James Munby QC, a leading Chancery silk from 1 New Square, delivered a paper to the Bar Council in December arguing that its future rested on direct licensed access, which would allow lay clients to approach barristers directly, bypassing solicitors.

More and more corporations with in-house legal teams are also bypassing outside solicitors when instructing barristers. In-house legal teams are able to do this because they draft their own witness statements and carry out many other tasks associated with litigation that private solicitors have traditionally performed.

Some Chancery barristers argue that by working alongside in-house legal teams, they can compete with big City law firms, both in terms of skills and costs.

Hochberg, however, says receiving instructions direct from lay clients will require “a fundamental change in the way we run our business” and force costs up dramatically through extra administrative and legal leg-work.

While not all barristers are convinced about changing their working practices, the Chancery bar and court clearly believes legal times are changing. And it gives the impression of being in a stronger position than most to take on board the major reforms to be imposed by Lord Woolf in two months' time.

One solicitor suggests that the delay in publishing the final draft of the reforms is part of a conspiracy perpetrated by the Lord Chancellor Lord Irvine to give judges a head start and enable them to anticipate the loopholes Chancery barristers will be looking for. Conspiracy or not, the Chancery Court is one step ahead of its rivals.

One leading practitioner describes it as having a “more intelligent infrastructure” than the Queen's Bench.

For one, the Chancery operates a file system that should give it a head start when the Woolf reforms are introduced. The system means each case has its own file that can be reviewed by the master before it comes before the court. This is a great time-saving exercise, because the judge or master will have an idea of the skeleton arguments, enabling the parties to go straight to the merits of a case. Masters in the Queen's Bench arrive in court cold, and require a full explanation of the facts at an interlocutory hearing.

The Chancery Court is also an informal place with a relaxed approach to procedural rules and flexible case management. Judges and masters are keen to push cases along quickly, take the initiative in issuing directions if parties are dragging their heels, and are generally proactive in their case management. The “clerical intelligentsia” working behind the scenes are highly praised by lawyers for their role in developing the court's excellent reputation.

Tony Bourne commercial litigation partner at Glovers says: “It is well known that the staff, the masters and the judges in Chancery are bright, and it is not surprising that it is known as 'The Court of the Walking Craniums'. If Chancery continues to be the court of choice, it is the people involved who will make it so.”

Many judges in the Chancery are former solicitors rather than ex-barristers, which, according to one leading barrister, can only be a good thing. “They have the edge because they are all very intelligent, possess the necessary specialist knowledge and are sensitive to the pressures on both solicitors and barristers.”

Yet certain sections of the Chancery are lagging behind in the new era of legal reform. While the commercial Chancery sets are clearly on the ball when it comes to marketing, seeking out new areas of work and fighting their corner, those that practice in the traditional areas of property, wills and trusts – especially on the non-contentious side – do not carry the same reputation.

One commercial Chancery barrister says of his colleagues: “Non-contentious work is a relic. These people really have to be seen to be believed. Many have not been to court for years and rarely surface from their dusty rooms.”

A Welsh solicitor describes these “stuffy and Dickensian” barristers as “pretty hopeless advocates”. She argues that Chancery barristers can be incredibly pedantic, to the point that they are unwilling to accept e-mail for issuing instructions, even when an urgent matter requires a little “corner cutting”.

So, although the Chancery is in a strong position to offer a competitive service in the new millennium, to retain its popularity, a lot rests on the personalities involved. Recent judicial appointments may have been very successful, but can the next batch maintain this excellent reputation?

Branding is also very important to the future success of chambers. The secret policy at one chambers is to describe itself simply as a “Lincoln's Inn set”. Many sets have relegated their Chancery a5 pect altogether and headed up units as “business litigation”. Do not be deceived, but be warned: they are actively after your work, your tenants and your good name.