How much is at stake?

Tulkinghorn on competing civil litigation regimes ... The obstacle course regime involves truth-obscuring complexity and requires lots of money ... The shallow pockets version offers tribunals that seek to skip complexity ... The more obstacles, the more lawyers are "worth" 

Complexity: requires eating-up too much of what is at stake

US law professor John O. McGinnis said: 

"Truth-eliciting rules are an important part of the rule of law, because they assure that courts base legal decisions on relevant factual states of the world.

Unfortunately, lawyers often have an interest in truth obscuring rules because legal complexity and uncertainty can be a source of business. Hence, we face a sad paradox: the class that should be the great guardian of truth in law may instead have the greatest interest in subverting it ...

Lawyers, whether prosecuting or defending civil or criminal actions, all enjoy a greater amount of work and demand for their services when establishing the truth at trial becomes more of an obstacle course." 

See: Lawyers as the enemies of truth, vol. 26 Harvard Journal of Law & Public Policy, 2003. 

In 1877 England's Lord Justice James said: 

"This case reminds me of a saying of the late Mr Jacob, that the importance of questions was in this ratio: first, costs; second, pleading; and third, very far behind, the merits of the case."

See: Hall v Eve (1877) 4 Ch D 341. 

His Lordship was probably referring to Mr Edward Jacob, a bencher of Lincoln's Inn and editor of Jacob's Reports and Walker's Reports.

Our Attorney General Nicola Roxon now says that in a civil case the merits (i.e. the truth) is not in the queue at all.

Most cases are settled out of court. In 2008 the CJ of Western Australian Wayne Martin said: 

"In the Supreme Court of Western Australia, less than three percent of civil lodgements are resolved by a trial. This percentage is remarkably similar to the percentage in the US Federal Court. I would be surprised if it is very different to the percentage in other Australian jurisdictions." 

According to Nicola: 

"As anyone who has been involved in a settlement will attest to, settlements aren't about who is right or wrong, they are about bringing matters to a speedy conclusion."

The particular case which triggered this remark was Ashby v Slipper (see documents here).  

Industrial relations expert Grace Collier is the managing director of Australian Dismissal Services.

She has outlined one part of the Ashby case as follows: 

"Take the adverse action case that James Ashby brought against former speaker Peter Slipper and the Commonwealth. Over the past six months Attorney General Nicola Roxon spent $730,000 on 17 lawyers to arrive at a settlement in which Ashby got $50,000 in go-away money and the agreement that members of parliament are to be trained in what constitutes sexually harassing behaviour. Ms Roxon described the case as 'vexatious' but says she had to 'settle' on behalf of the Commonwealth to stop the 'lawyers' picnic'." 

Obviously most civil cases are about who is right or wrong, so what is Nicola talking about?

The answer seems to be that we have two competing civil litigation procedural regimes.

In one of them - the obstacle course one - truth obscuring complexity, uncertainty and large amounts of money rule the roost.

In the other one, truth seeking tribunal procedures are adopted.

For the most part, cases find themselves allotted to one regime or the other, depending on how much is at stake, because that generally indicates how much (by way of legal fees) can be extracted from the litigants. 

Inevitably, litigants and prospective litigants will demand more and more tribunal jurisdictions at the expense of "obstacle course" jurisdictions.

It was this "danger" that prompted the former NSW Chief Justice J. J. Spigelman in 2004 to warn the profession about, "the belief that the legal process eats-up much too high a proportion of what is at stake". 

"In particular this has led, in some areas, to the replacement of an adversarial system by some form of administrative process. Unless the profession concentrates on this problem, there is no reason to believe that this kind of change will stop with the areas in which it has now been implemented."

If asked to explain why "big" cases get "obstacle course" procedures, while "small" cases don't, lawyers' explanations can become rather opaque.

A submission by the Victorian Bar in 2005 managed to both deny that the size of a claim is relevant, while at the same time admitting that it was: 

"Although the amount in issue is no indicator of the degree of difficulty, complexity or legal significance of the case, it is now, and has always been, one basis of distinction in civil matters between different levels of courts in Victoria and elsewhere. 

It has served to differentiate between courts, and it is not irrational. However straightforward the legal issues may be, the higher the stakes, the greater the concern that the matter be fully and carefully prepared, that there be experienced and senior practitioners representing the parties, and that the management and disposition of the matter be on an individual basis in a higher court." 

Small claims are just as legally complex as big ones. Australian law professor Eugene Clark wrote in 1995:

"Small Claims Courts are often dominated by consumer type issues which can be highly technical and require the adjudicator to negotiate a myriad of common law, statutory and administrative precedents and regulations."

See: Enhancing Access to Justice: Some Lessons for Lawyers, University of Canberra Law Review, vol. 2 (1) July 1995. 

Adversarial "obstacle course" litigation procedure is expensive. It is designed to extract big fees from large claims and "deep pockets" litigants.

Big profitable cases have to be allocated to obstacle courses, while small claims and "shallow pockets" litigants have to be given access to litigation procedures that skip the complexity, uncertainty and lack of proper truth seeking.

Typically, tribunals and small claims courts achieve this.

For example, s.28 of the NSW Consumer, Trader and Tenancy Tribunal Act says:

"The Tribunal may, subject to this Act, determine its own procedure.

The tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of procedural fairness. The tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms." 

The "leading" litigation lawyers are never going to let the obstacle course system be pushed out of big claims. 

Sumption: I'm worth it

An indication of the amount at stake can be gleaned from the recent activities of Jonathan Sumption QC in England. He is now a UK Supreme Court judge, but in 2001 he came under fire for his massive fees.

He replied: 

"You have accused me of the horrid crime of earning as much as eight High Court judges and 69 refuse workers put together. I admit it. But the reason is not that our society worships money, still less that I do ...

I earn what I do because that is what my services are worth to the people who pay for them." 

The more of an obstacle course the litigation system is, then the more Jonathan was "worth".

In 2010 he said in an interview:

"Ultimately law is just common sense with knobs on."

I doubt whether he endorsed that on his bills.