Although Settlement, Rather Than Litigation, Poses a Number of Problems

Although settlement, rather than litigation, poses a number of problems for a civil justice system these matters have been largely resolved by Lord Woolf’s reforms Assess the validity of the statement Candidate number: 131183 Student registration number: 120161429 “Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser, in fees, expenses, and waste of time” (Lincoln’s Lessons for Lawyers, Thomas Stipanowich) 1

Introduction A civilised system of government demands that a means for just and peaceful dispute resolution be made available to all citizens to determine their civil rights1. A civil justice system sustaining social stability and economic goals is of vital importance for any legal tradition (Genn, 2008). Though courts are the ultimate institution upholding the objectives of civil justice, dispute resolution is not necessarily court centred. It needs neither be a confrontation between two parties.

In fact, most of the civil disputes are settled out of court. This essay takes the view that settlement acts rather as an integral part of the civil justice system than poses problems for it. To understand this, it is necessary to see the civil justice process reality – complex, constantly changing, dealing with multiple adverse interests and immersed in social justice and democratic issues. The Woolf Reforms are said to have revolutionized the civil justice system in England since the 26th of April 1999.

The reforms have had a profound effect on the development of the culture of settlement. Ten years after, there is a broad agreement that they have been largely successful2. One of the widely approved effects of the reforms is a more co-operative approach to disputes. In other words, the Woolf reforms succeeded in encouraging even further the already popular settlements. In seeking a settlement, the parties of a dispute take the matter in their hands attempting to find a mutually acceptable solution faster, with greater liberty, and at a lower cost.

Advocates of this alternative consider it to promote values of individual autonomy and liberty. However, there are doubts about settlements. The two major criticisms relate to access to justice and the rule of law. Settlements may be seen as interfering with the main function of the courts – to state what the law is. The complexity, cost and delays of the court system may be seen as pressuring parties to reach a settlement thus forfaiting their “day in court”.

To assess the validity of the statement above, this essay will first consider the role settlement plays in the civil justice system. Next, the problems identified in the English civil justice will be outlined. This will set the ground for an examination of the nature of the Woolf reforms and their impact. Lord Diplock in Bremer Vulkan Schiffbau and Maschinenfabrik v South India Shipping Corp. [1981] AC 909, HL, p. 976, cited in Genn, 2008 2 New Law Journal, 13 March 2009, Michael Zander, More harm than good? , http://www. newlawjournal. co. uk/nlj/content/zander-woolf 1 2

Some background on settlement In Anglo-Saxon history, there have been frequent tensions between the efforts of the king to impose court systems and the desire of communities to settle their own disputes. In the early US history, lawyers have been outlawed because the colonies desired to work things out among themselves (Ide III, 1993). In the last century in England, certain groups of stakeholders have traditionally turned to out-of-court ways to resolve their disputes. In 1838, the attempts to simplify and speed up the proceedings were not sufficient and businesses preferred arbitration to court (Genn, 2005).

The 1930 report of the London Chamber of Commerce suggested the English civil justice system was the “most perfect of its kind”, but still expensive and exclusive (Genn, 2005:2). In 1978, 86% of personal injury claims were resolved before initiating proceedings, 13% after, and only 1% were resolved by the court (Royal Commission on Civil Liability and Compensation for Personal Injury in Cownie, Bradney and Burton, 2010). In 1988, 88% of personal injury claims based on negligence or breach of statutory duty were settled out of court (Civil Justice Review report in Cownie et al. 2010). Genn’s (1999) research sheds light on similar results for other types of civil claims – 8 out of 10 potential claimants do not initiate legal actions or attempt to reach settlement out of court through alternative dispute resolution (ADR), but resolve their legal problems in another way. Her data does not point to major discontent with such decisions. The statistics and studies (Genn, 1999; Zander, 2000; Pleasence, Balmer, Genn, Buck and O’Grady, 2003) reveal a general preference for settlement.

Courts are not the preferred place to resolve disputes, both by businesses and by individuals. 3 Has settlement been the problem for the English civil justice system? There have been more than sixty official reports on the civil justice system in England in the last 100 years. The main problems pointed out have invariably been the complexity, delay and cost of civil litigation (Zander, 2000). The criticisms of the system have been consistent (Eliott and Quinn, 2012). The civil justice process has developed gradually through reforms trying to respond to the needs forming in society.

There have been constant efforts to make the system accessible to a larger portion of the population and more efficient so it would be helpful for the businesses and individuals that needed to resort to it (Eliott and Quinn, 2012). Nevertheless, settlements have consistently been the most common way of resolving civil claims. What could be the problem with this? It can be argued that settlement interferes with the rule of law. Courts’ function is to authoritatively settle disputes as to what the law is and how legal rules are to be applied.

This is a task of great societal importance, which settlement impedes the courts from realising (Fiss, 1984). A possible interpretation of this problem is an opposition of private to social interests. In other words, it is asking for a determination of what is more important – to resolve a dispute in the best possible way as defined by the parties themselves, or to take any dispute as a chance to develop the Law (Fiss, 1984). Additionally, there may be tensions between the pressure to settle and art. 6 of the ECHR. For instance, Lord Woolf’s decision in Anufreijeva v.

Southwark LBC3 suggests ADR is in a certain sense a barrier to entry to the court process. Such concerns have been raised in Europe, South Africa (Boulle, 2011), Australia (Green, 2010), Hong Kong (Gu, 2010), the US, and a number of other jurisdictions (see Boulle, 2011). To frame those concerns it is necessary to consider that access to civil justice has never been unconditional. Historically since the Roman times, and currently in all jurisdictions, access to the courts is granted based on certain rules determining the suitability of the claims for judicial intervention.

One of the main motivators of such rules is the limited judicial resources and the constantly growing number of disputes. Logically, if everyone is granted their day in court, civil justice will be compromised by not providing a timely response, as well as by effectively excluding a portion of 3 [2003] EWCA Civ 1406 4 litigants who cannot afford to wait. Proper functioning of society requires that the disputes be dealt with swiftly and efficiently. In practice, this means disputes need to be filtered and channelled through different procedures.

In this sense, the requirement to seriously consider settlement would be another step on the path to the courts, while at the same time a way to defer claims which may turn out to be better suited for a non-adversarial solution. This way courts are reserved for the solution of the more complex disputes, where resolution in any other way is impossible. This argument would be in line with democratic values and civil society, where learning to live together harmoniously is a critical aspect, and perhaps an implied ultimate goal, of justice (Sternlight, 2007).

Resorting to settlement could be seen as an informal justice system, which corresponds to a society aiming at peaceful and cooperative dispute resolution. 5 The Woolf reforms of civil justice The dissatisfaction with the civil justice in England in the past in terms of delays, costs and complexity has led to a series of reforms. Lord Woolf’s review resulted in two reports (Interim in 1995 and Final in 1996) with recommendations for (some claim them to be radical) changes to the civil process. The main concerns of the reforms are the delays, high cost and complexity of the civil process.

The overriding objective of the reforms is ensuring cases are dealt with justly4. Lord Woolf’s argumentation is that his proposals follow the reality – the fact that most cases end up in settlement – and attempt to adopt the procedural rules to it (Elliott and Quinn, 2012). The reforms spurred a heated discussion with strong opinions on both accepting and criticising sides. The effect of the reforms on the settlement process is intended to be fourfold. First, the court must encourage the use of ADR procedures – Part 1. 4(2)(e).

Second, offers by the parties under Part 36 carry formal penalties if unreasonably rejected. Third, litigation is seen as a last resort given failed pre-action attempts at settlement. As a whole the reforms are intended to encourage a co-operative, more settlementminded culture. There have been several assessments of the reforms since their implementation. The senior judiciary, the BAR, the Law Society, the media and the consumer organisations universally supported Lord Woolf’s recommendation (Elliott and Quinn, 2012).

Encouragement of settlements and the greater cooperation between the parties are singled out as major achievements (for instance: Sir Peter Middleton’s report in 1997; Study 43, commissioned by the Law Society and the Civil Justice Council; Lord Justice Jackson’s review 2009). The statistics show positive effect of the reforms on the number of claims. The Department for Constitutional Affairs (2002) reports a drop of claims issued, pre-action protocols encouraging earlier settlement, decreasing number of trials, greater speed in more complex claims (Genn, 2005).

The Judicial Statistics show a drop in claims on national level reaching court – for instance in the High Court there were 150,000 in 1995 compared to 64,000 in 2007 (Elliott and Quinn, 2012). There have been also some criticisms to the reforms. Zander (1995, 1996, 1998) is one of the strongly opposing voices to the Woolf reforms holding that they have not 4 Part 1, Civil Procedure Rules 6 achieved to remedy the problems of the English civil justice system.

His point refers to the question whether the balance of strengths and weaknesses of the system postWoolf is in practice better than the situation before (Zander, 2000). The criticisms which refer to settlement suggest settlements do not need the pressure introduced by the reforms. Indeed, the front-loading of costs 5 may compromise the value of settlement for the parties (see Genn, 2005; Zander, 2000/2009; Peysner, 2003; Cornford, 2000). Additionally, the increased pressure to settle has raised several concerns. It is held that the rules do not provide fully equivalent footing for the parties in the negotiations.

More experienced litigants may hold a stronger position in negotiations due to knowledge of the game as well as access to more specialised advice (Elliott and Quinn, 2012) thus compromising the power balance and producing a potentially unfair result. The flaws of the reforms are adjudicated to poor research of international and historical instances, as well as the day-to-day reality of dealing with civil claims (Zander, 2009). While the reforms rely very much on settlement, they may effectively reduce its value by including it in the system. 5 Michael Zander QC, Emeritus Professor, LSE -­? More harm than good? 13 March 2009; New Law Journal; ttp://www. newlawjournal. co. uk/nlj/content/zander-­? woolf 7 Conclusion Does settlement pose problems to the English civil justice system? I believe the answer is no. The data points out that litigation is the last resort, not a preferred choice of dispute resolution. The Woolf reforms support that trend trying to incorporate settlement into the civil justice system. Though some concerns are raised about settlement interfering with the rule of law and the access to justice, my inclination is with the evidence pointing to settlement as empowering the parties and effectively filtering the case load of courts, rather than acting  in n arbitrary and exclusive power. When discussing a best solution to the problems identified in the English civil justice, we are faced with multiple answers varying from the perspective of each group of stakeholders (Genn, 2005). Adequate management of settlement may respond to needs of efficiency, in terms of time and cost, and at the same time secure public confidence in the civil justice system, supporting the fairness in delivering justice. Given the complexity of the civil justice system, reforming it in a way everyone is happy is perhaps rather an utopic idea. Lord Woolf admits that the aims of his reforms onflict with each other. He admits that the best option seems to be to aim for balance and sees the process as first encouraging settlement by agreement, and then if such is not possible – a fast procedure (Elliott and Quinn, 2012). In this sense, settlement is not contrary to civil justice, but an integral part of it. How to properly incorporate it in the system is an on-going challenge for legislators. Ultimately, if we look back at the development of the civil justice systems in England and abroad, we may reach an encouraging conclusion – settlement works because it operates in the shadow of an effective litigation system. Bibliography Boulle, A. (2011) Alternative Dispute Resolution, Access to Justice Conference “Towards delivering accessible quality justice for all”. Cornford, T. (2000) “The New Rules of Procedure for Judicial Review”, Web Journal of current legal issues, vol. 5. Cownie, F. , Bradney, A. , Burton, M. (2010) The English Legal System in Context, 5th ed. Oxford: Oxford University Press. Dowell, K. (2009) Woolf reforms: lawyers continue to wrangle over merits a decade on, The Lawyer, http://www. thelawyer. com/woolf-reforms-lawyers-continue-towrangle-over-merits-a-decade-on/1000991. article (accessed 01-04-2013) Eliott, C. Quinn, F. (2012) English Legal System, 13th ed. London: Pearson. Forsyth, A. (2012) Workplace conflict resolution in Australia: the dominance of the public dispute resolution framework and the limited role of ADR. The International Journal of Human Resource Management, 23:3, 476-494 Gearey, A. , Morrison, W. , Jago, R. (2009) The Politics of the Common Law. Perspectives, Rights, Processes, Institutions. Routledge-Cavendish. Genn, H. (1999) Paths to Justice: What People Do and Think About Going to Law. Oxford: Hart Publishing. Genn, H. (2005) Civil Justice since the Woolf reforms – how useful is ADR? Department of Consumer Affairs (DCA): Scottish Consumer Council Seminar. Genn, H. (2005) Solving civil justice problems: what might be best? Seminar paper. Scottish Council seminar on civil justice, 19-January-2005. Genn, H. (2008) Judging civil justice, The Hamlyn Lectures Goriely, T. , Moorhead, R. , Abrams, P. (2002) More Civil Justice? The impact of the Woolf reforms on pre-action behaviour, The Law Society and Civil Justice Council: Research Study 43 Goriely, T. , Williams, T. (1997) “Resolving Civil Disputes: Choosing between out-ofcourt schemes and litigation.

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