Vive la chancery

TV lovers will be snuggling down on Thursday to watch the first episode of the BBC’s new 15-part adaptation of Charles Dickens’ Bleak House. They will see glimpses of Lincoln’s Inn. They will see a mock-up of the Court of Chancery as it might have been in 1852, presided over by the Lord Chancellor. And they will see the barrister, Mr Tangle, who appears in Jarndyce v Jarndyce. Will they wonder if such a court still exists? Will they wonder if a Mr Tangle exists today? And if so, what he is up to?
The Court of Chancery was abolished by the Judicature Acts 1873 and 1875. That created the Supreme Court, which was divided into divisions, one of which was, and is still, the Chancery Division.

What does the Chancery Division do?

The Chancery Division encompasses the Companies Court, the Bankruptcy Court and the Patents Court and has exclusive jurisdiction over those areas, which include insolvency and IP, as well as competition cases. Its work overlaps that of other divisions, but the 19 chancery judges do not sit in crime or undertake medical negligence cases. They still deal with the traditional chancery work – trusts (including pensions and constructive trusts in complex fraud cases), tax and contested wills – such as in Dickens’ Jarndyce v Jarndyce.

What’s new in chancery?

The amount of work is up (in particular patent and IP work has increased) and several big trials are coming up soon. There are two new young (relatively) and energetic judges in London: Mr Justice Warren and Mr Justice Kitchin. Roger Kaye QC has been appointed as the chancery and mercantile judge in Leeds, and a new appointment to the chancery post in Manchester is imminent.

Are there any Mr Tangles?

Yes, around 1,000 of them – but now of all sexes, races and religions, and perhaps much less muddled than Dickens’ Mr Tangle. Most are in chambers in London, but around 16 per cent practise outside London in the main provincial centres such as Bristol, Birmingham, Manchester and Leeds.

What are Mr and Miss Tangle up to, and where?

In court, chancery practitioners have been, and still are, part of the Equitable Life case in Court 76, and the BCCI-Bank of England dispute. They sorted the company reconstruction of Norwich Union, shamed Stephen Byers in the Railtrack litigation, turned out in force in August (unheard of in Dickens’ time) to argue the Sisu Capital Funds case, upset the bankers’ charges over book debts in Spectrum Plus and, by the time you read this, they may or may not have succeeded in ejecting the Saatchi Gallery from County Hall. Coming soon this term is the Abbott Pharmaceuticals spat about drug royalties, and next term will see the Apple v Apple row about The Beatles’ original trademark.

Unlike old Mr Tangle, chancery practitioners are undertaking a vast and increasing amount of international work. Due to start next week in the Chancery Division is a huge case between two Russian businesses about a joint venture. Because many companies and trusts are set up for various purposes on islands which are common law jurisdictions such as the Cayman Islands, the British Virgin Islands, Bermuda, the Channel Islands or Hong Kong, when problems arise they look to the English chancery practitioners for advice.

What does the future hold?

Life in chancery, then, is a fairly rosy garden. Will it still be so in the future? On 19 October 2005, the Department for Constitutional Affairs (DCA) published a response to its consultation ‘A Single Civil Court?’. It read: “Ministers have concluded that reform to create single Civil and Family Courts with unified jurisdictions would be feasible and beneficial. So they have decided to adopt this as a long-term objective.”

This suggests that the divisions may be abolished and that there will be no division between county courts and the High Court. Whether chancery practitioners, and more to the point their clients, will be able to guarantee getting the quality of judge presently found in the Chancery Division is open to question.

Also, on 19 October, the DCA published yet another consultation paper, ‘Focusing Judicial Resources Appropriately – The Right Judge for the Right Case’. This proposes that, despite the increase in work, the size of the High Court judiciary (presently at 107 judges) should not be increased because this would “be detrimental to the High Court” and “would undermine the justice system as a whole”. So it proposes that all cases should be started in the county courts, unless it is demonstrated exceptionally that the case meets three specified High Court criteria. However, it suggests that “no purpose would be served by changing the existing arrangements of the Commercial Court, the Admiralty Court, the Patents Court or the Administrative Court”, and recommends that the current arrangements for the Companies Court and Bankruptcy Court remain. But what of the rest of the important Chancery Division work?
The Lord Chancellor (the fons et origo of the Court of Chancery) recently gave a speech to the Commercial Bar Association about the primacy of English commercial law, the importance of maintaining its standing (including improving the facilities of the Commercial Court and its IT facilities) and the quality of its judges. He justified this by reference to the fact that the English law of contract is the international law of choice over a wide range of areas. All of which is quite true.

Everything he said applies equally, if not more so, to the Chancery Division and much of its work. Not only is English law the international law of choice in contracts, but it (or its offsprings, such as the Commonwealth, the Eastern European bloc and developing jurisdictions that base their law on English law) is often the compulsory law of the problem – the law of the place of the company’s incorporation, or the law governing the trust that frequently underpins the commercial entity which enters into the contractual arr-angement. It is just as important that the court hearing trust, fraud, IP and company work has the same standing and judges as the Lord Chancellor is advocating for the Commercial Court.

Unless the DCA and the Government can be made to realise that the Chancery Division and its work are a mainstay of the reputation of English law, then life ‘in chancery’ may be in a bleak house indeed.

Carolyn Walton is vice-chariman of Chancery Bar Association and a barrister at Maitland Chambers