The Parliamentary Secretary, Lord Chancellor's Department (Mr. John M. Taylor)
I beg to move,That the draft Civil Jurisdiction and Judgments Act 1982 (Amendment) Order 1993, which was laid before this House on 25th January, be approved.The purpose of the draft order is to make some modifications to the rules which govern the allocation of jurisdiction to the courts of the different parts of the United Kingdom in civil cases. Article 2 deals with cases which have a connection with more than one part of the United Kingdom—for example, where the plaintiff is English and the defendant Scottish. Article 3 deals with the rules of jurisdiction in Scotland.
Our present rules allocating jurisdiction within the United Kingdom are contained in schedule 4 to the Civil Jurisdiction and Judgments Act 1982 and are based on those in the 1968 Brussels convention. That convention is concerned with jurisdiction and the enforcement of judgments as between member states of the EC, and the main purpose of the 1982 Act was to give effect to the convention in the United Kingdom.
The rules on jurisdiction in the Brussels convention have now been modified in various respects—none of the changes is of the greatest significance—and we have decided that where our rules follow those in the convention they should follow suit with regard to the amendments as well. The power to do that is in section 14 of the 1982 Act.
The amendments are technical and we have consulted the legal profession about them. Both the Law Society and the Bar Council have confirmed that the amendments are sensible.
The order makes amendments to schedule 4 in three areas—contracts of employment, related claims concerning a contract, and real property and holiday lettings.
§ Mr. Robert Maclennan (Caithness and Sutherland)
It may save my intervening again if the Minister could say whether the professional organisations in Scotland were consulted and whether the Scottish Law Officers gave their views. They are not represented here tonight.
I invited the Scottish Law Officers to be present if they so wished. All those whom the hon. Gentleman's question implies he hopes were canvassed were so canvassed.
The basic rule of jurisdiction in the Brussels convention is that a defendant must be sued in the country where he is domiciled. In specific types of case, alternatives are offered. Thus, article 5(1) provides that, in contract cases, a defendant may instead be sued in the courts for the place of performance of the contract. The convention said nothing originally about individual contracts of employment. It now contains a provision that the place of performance of such a contract is the country in which the employee habitually carries out his work. If he does not habitually work in any one country, he may choose to sue the employer in the courts for the place of business through which he was engaged.
I see no reason why schedule 4 should not be amended to keep it in line with the Brussels convention in that respect, and the order provides accordingly. It will make it clear that someone from Glasgow, for instance, who works 1184 in Scotland for a company based in London will be able to bring proceedings against the company in a matter relating to his employment in Scotland.
The order also permits a further choice which is given to a plaintiff employee by a new fifth paragraph in article 17 of the Brussels convention. That paragraph invalidates a choice of court agreement in cases concerning a contract of employment unless the agreement was made after the dispute arose. However, it allows an employee, but not an employer, to take advantage of a pre-dispute agreement which confers jurisdiction on a court other than that of the defendant's domicile or that of the place and performance of the contract.
Secondly, new paragraph 4 of article 6 of the Brussels convention provides that where there is both a contract case and a case relating to rights in real property between the same parties, the plaintiff may bring both actions in the country where the property is situated, rather than having to take separate actions in different countries. That is clearly convenient for the parties, and a similar provision has therefore been added to schedule 4.
Finally, the general rule that cases relating to property must be heard in the country where the property is situated has been amended with respect to the particular case of short-term holiday lets. Article 16(1) now confers alternative jurisdiction in such cases on the courts of the defendant's domicile, provided that both the landlord and the tenant are natural persons—that is to say, not companies—and are domiciled in the same country. We agree that this special provision is jusitified. It would mean, for example, that a dispute between two English people over a holiday letting in Scotland would not have to be heard in Scotland if it was more convenient for it to be dealt with in England.
Article 3 of the order amends schedule 8 to the 1982 Act which contains the rules as to jurisdiction within Scotland. Those rules also follow those of the Brussels convention, for the most part, and it is proposed to make the same amendments to them as those which have been made to schedule 4. These amendments also have the support of the legal profession in Scotland.
The changes contained in this order are useful ones which reflect those that have been made to the Brussels convention in the light of experience of its working. As I have said, interested bodies within the legal professions have agreed that they are sensible, and I commend them to the House.
§ Mr. Paul Boateng (Brent, South)
The contents of this order are non-contentious. They have been the subject of consultation and are, as the Minister has outlined, broadly welcomed. Having said that, it is interesting to reflect in a little detail on the primary basis of jurisdiction under the convention and to relate that to the schedules referred to in the order.
The primary basis is the domicile of the defendant. Unless an alternative basis of jurisdiction applies, a defendant domiciled in a member state must be sued in the courts of that state. There are, however, several alternative bases of jurisdiction which provide what might be termed non-exorbitant bases of jurisdiction of the type which all courts have traditionally claimed, so that a defendant domiciled in another member state may be sued in the 1185 English court if certain conditions apply. In a contract case, the condition would be that the contract was to be performed here.
The Minister has given an example of the impact of the order on contracts of employment and he gave an example of the relevance of the place of work and the place of performance of the contract.
Secondly, in a tort case, the defendant, albeit domiciled in another state, may be sued in the English courts if the damage was sustained or the tort was committed here.
Thirdly, and not unimportantly, subject to article 16 of the convention, the defendant has, in certain circumstances outlined in article 16, the option of voluntarily submitting to proceedings here. That is what I wish to speak about.
For many years, the courts of England have been developing a reputation and an area of expertise unparallelled in Europe or, I would go so far as to say, in the world. In 80 per cent. of the cases in the commercial court, one party is foreign; in 50 per cent. of cases both parties are foreign. The significance of this order to those figures will be obvious to you, Mr. Deputy Speaker. as it will to the House—as will the concern that exists about the operation of the commercial court and therefore the context in which these orders will be applied.
The commercial court increasingly finds itself unable to operate as it should because of a shortage of High Court judges. That shows the relevance of an issue on which we have touched time and time again during this evening's work: the insufficiency of High Court judges. The importance of exploring this matter in full has dawned on Conservative Members, because leading City institutions are increasingly expressing their concern about the acute shortage of judges in the commercial court, a shortage which has an impact of the issues that are before the House tonight. Bodies such as the stock exchange, the Baltic Exchange, the British Bankers Association, the Grain and Feed Traders Association—not a body that normally comes to the attention of any but a highly specialised section of the public—have expressed their concern about the insufficiency of High Court judges in the commercial court.
I ask hon. Members to imagine what would occur when somebody was seeking to exercise his or her rights under this order. The Minister has referred to the schedule, which deals with holiday lets and with several other contractual cases that are likely to find their way into our courts. What will be the situation in the High Court and commercial court when this order is brought into effect?
Mr. Justice Saville gives some indication of that. He warns that the court's business is grinding to a halt. We are being invited by the Government to give effect to an order which will extend the jurisdiction in circumstances in which, already, the commercial court finds itself unable to deal with the business at present before it. Mr. Justice Saville says that the court's listis in complete disarray with no realistic prospect of being able to restore order. There is insufficient judicial manpower to deal with the cases stood out, let alone cope with the existing list as it comes forward. The carefully nurtured reputation of the commercial court is at risk of being lost.The House is being asked to sanction an order which comes into effect at a time when the list of the commercial court is, to quote Mr. Justice Saville, "in complete disarray".
1186 It is worth listening to the concerns expressed by the head of litigation at Lovell White Durrant, Mr. Anthony Pugh-Thomas. He said:
We have clients raring to go the week after next, and we have to tell them that they won't be heard until next April.That was the situation on 8 December 1992 and it is even worse now.
Mr. John M. Taylor
On a point of order, Mr. Deputy Speaker. The kinds of proceedings covered by this order are not suitable for, nor would they be covered by or litigated in, the commercial court.
§ Mr. Deputy Speaker (Mr. Michael Morris)
Order. This order is principally about the simplification of formalities. I can understand the hon. Gentleman developing that argument, but he seems to be developing it a little more widely. Perhaps he could come back to the order, which is pretty tightly drawn, as he, as a lawyer, will understand.
§ Mr. Boateng
I will, of course, accept your guidance, Mr. Deputy Speaker, and assistance in this matter.
I think that it is worth looking at section 2 of the order, if the Minister will turn his attention to that. It refers to article 5, which deals with matters relating to individual contracts of employment. It inserts additional words and says that we are to look at where the employee habitually carries out his work. It goes on to say:If the employee does not habitually carry out his work in any one country, the employer may also be sued in the courts for the place where the business which engaged the employee was or is now situated.Inevitably, the business infrastructure, which always, of course, includes the court system of any jurisdiction, will act as a magnet to the establishment of businesses, where the jurisdiction permits it, and this order deals with the issue of jurisdiction and will act as a magnet to action. Therefore, it is highly pertinent to examine the state of our commercial court, and I do not see how the Minister can pretend otherwise.
If a senior partner in a major City law firm says that considerable inconvenience is being caused to clients and that the state of the commercial court is a matter of embarrassment to the profession, that is relevant. What happens in the commercial court is inevitably influenced by what is happening elsewhere within the parameters of the High Court. Let me give an example.
Mr. Justice Saville was promised two more commercial court judges. I intend to go back to the Government's failings time and time again until this issue is resolved—that is why we are here; that is why we are spending the time we are on the floor of the House on this issue—and until the Government address the issue of how the measures which they introduce impact on the work load of the court.
Has the Minister considered this issue? Is there, as we speak, someone somewhere in the Lord Chancellor's Department who knows what the impact of this measure will be on the court system? Will it lead—this is a legitimate question to which we are entitled to receive an answer—to more people choosing to litigate in this country? Will it lead to an increase in the number of actions brought in this country? If it will, it is relevant that, as a result of delays elsewhere in the system of justice, Mr. Justice Taylor is unable to provide Mr. Justice Saville with his two more commercial court judges. Mr. Justice Saville 1187 expects that, instead of six judges, there will be only four. Three of them will be tied up on long cases, so that leaves one judge to handle the work of six.
In an earlier debate, which was brought to a speedy end, the Minister sought to introduce the novel formula that two Lords Justices of Appeal equal six lawyers servicing a department. Here we have one judge required to do the work of six judges. The broad statement of fact made by Mr. Justice Saville is that unless something is done now—this was in December, two months ago—the commercial court will cease to operate next term. That inevitably has a bearing on matters which the order seeks to address.
May we have some answers on the points made in relation to the likely increase in the number of actions and the extent to which the impact of that increase on judicial manpower has been taken into account? Can we hope that when the review of appointments to the High Court is published—we warmly welcome its publication—the passing of measures such as this will have been taken into account when ensuring that there are enough judges in the High Court?
Unless we have those assurances, many more evenings will be taken up with debates such as these. That is a promise: the Minister can be sure that we intend to fulfil our responsibility to make sure that the administration of justice takes place in the interests of the citizens and consumers.
Mr. John M. Taylor
The hon. Member for Brent, South (Mr. Boateng) asked me with some force—his question brooked no sidestep—whether I would state to him, to the House and to you, Mr. Deputy Speaker, whether the impact of the proposals contained in this order was measurable. My answer is that the impact will be benign. It will not increase the number of actions; it will merely affect the distribution of actions within the United Kingdom by conveniencing the parties and giving them better and easier choices of venue.
That is why I submit that the measure has no enemies. In the course of its formulation, all interested parties, court users and wider interests, were consulted to find out whether it was genuinely thought to be an improvement—not a slavish imitation of something worked out in Brussels, or, indeed, something eccentrically and particularly British, but something between the two, taking the best of the European practice and the best of our own experience, reaching a compromise, and 1188 conveniencing litigant and lawyer alike. I suppose that one always has some innocence to lose—perhaps that is part of the joy of life—but I honestly did not imagine that the provisions would lead to the hon. Gentleman's remarks about the commercial court. However, I can deal with them briefly.
On the commercial court, I have nothing to add to what I said on 19 January in an Adjournment debate secured by my hon. Friend the Member for Croydon, South (Mr. Ottoway). The remarks that I made then post-date the hon. Gentleman's comments this evening.
§ Question put and agreed to.