§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Robert G. Hughes.]
§ 10 pm
§ Mr. Richard Ottaway (Croydon, South)This is very much a case of third time lucky. After the fracas on the day before the start of the Christmas recess, I was prevented by Opposition Members from making this speech.
In drawing attention to delays in the commercial court, I declare an interest as a solicitor and a director of companies which, from time to time, have had reason to use the commercial court. One of the main reasons why hon. Members should not be deterred from holding outside interests is that they are able to bring to the attention of the House problems that arise in those outside interests and which the Government can remedy.
Britain is a trading nation, and depends on international trade and commerce for its existence. At its heart is the City of London and, as I am a Member for a London seat and many of my constituents work in the City, its success is paramount to my constituency's interest. The City of London has a pre-eminent role in global trade and, inevitably, there are disputes in such trade. The commercial court provides a disputes resolution service for the international trading and commercial community, and to date it has been most successful.
The commercial court enjoys a worldwide reputation for providing the service for which it was instituted nearly 100 years ago in 1985. It was set up to overcome delays in the High Court—which, ironically, is now its chief fault. In well over half the cases that appear before the court, all the parties are foreign enterprises, and in more than three quarters of the cases, at least one of the parties comes from abroad. One of the chief results of that success is that the court is a substantial earner of foreign exchange in the form of invisible earnings. Those earnings arise not merely from those directly using the court, because the existence of the court in London means that the big international law firms in the City have an advantage over their overseas competitors and can offer as part of their services their familiarity with the practices of a court of world renown.
Bearing in mind the huge costs of commercial legal advice and advocacy, it would not be an exaggeration to measure the financial benefits of the court in hundreds of millions of pounds per annum. According to the Central Statistical Office balance of payments year book, foreign legal earnings are £425 million per year. The success of the commercial court over recent years is demonstrated by the fact that the court is so popular that the number of judges on commercial cases has increased from one 30 years ago to the present six. It is a credit to this Government and the Lord Chancellor's Department to have nurtured and promoted this state-owned industry. However, a few problems have recently occurred. Due to the international nature of the court, it has developed a system of providing fixed hearing dates. One of the principal reasons for this is that a system of fixed dates gives foreign litigants and witnesses fair notice of when they will be required to travel to this country.
Another important reason is that all those concerned with commercial affairs much prefer to know in advance when their disputes and differences will be resolved. In 353 order to provide fixed hearing dates that are reasonably reliable, the court must have a constant minimum number of commercial court judges.
Given that starting point, the court can construct a list of court cases and dates. It is the aim of the commercial court that, in principle, cases should be heard at the earliest date on which the parties can be ready. That is in line with the suggestion in the civil justice review, that cases should be listed and heard within 12 months from the time of giving a trial date. That aim is also, most importantly, in line with what commercial enterprises want and need from a commercial disputes resolution service. In this field, justice delayed is likely to be justice denied or at least diminished.
Within an establishment of six judges sitting full time it was possible in the past to come close to achieving that aim. However, the situation has deteriorated recently. At the beginning of the last legal term, only five judges were available, and for reasons which are not surprising in a commercial court, four of those judges had become tied up in cases which had overrun or been brought on expeditiously. So we have a situation in which one judge is doing the work of six. He is the judge in charge of the commercial list, who is unable to undertake any trial of any length, as he has to be available to deal with the administrative matters and paper applications, which run to dozens every week.
The upshot of that is that the commercial court faces an immediate and serious problem. Had the full complement of judges been available, the difficulties would largely have been overcome, but on 22 October 1992, the question of judicial resources was raised in the other place when Lord Byron specifically raised the problems faced by the commercial court because of the lack of a full complement of commercial judges.
The Lord Chancellor, dealing with this point, observed that it was not immediately possible to replace those promoted to the Court of Appeal, but that he hoped to be in a position to appoint replacements and that the matter was temporary. A similar response was given to me by my hon. Friend the Member for Solihull (Mr. John M. Taylor), when, in answer to an oral question on 30 November, he said that a further appointment would shortly be made and implied that that would solve the problem. He gave that response in absolute good faith and I assure him that I am not suggesting otherwise.
Unfortunately, since then it has transpired that the problem is proving more than temporary. The complement of commercial judges is, on information I have available, likely to be affected indefinitely. As my hon. Friend is aware, three fresh appointments have been made in recent weeks, but I am informed that, because of shortage of judges in other parts of the Queen's bench division, two of these new judges can be made available next term for the use of the commercial court, and one is one of the five already struggling.
If I may anticipate my hon. Friend's reply, he may suggest that this is a matter for the Lord Chief Justice, but the Lord Chief Justice has been saying for many years that he does not have enough judges. My hon. Friend may say that this is a matter for the working party recently set up, but I put it to him that it has already been submitted to the working party that the High Court requires more judges.
354 In other words, the shortage of judges in the commercial court will continue, and the difficulties will multiply every day. They cannot be solved next term, because the court will not have the judges available to do next term's list, let alone grapple with this term's problems of the emergency problems that next term itself may bring.
The commercial court users committee met last month. It is a committee not merely of lawyers with a vested interest in the success of the court but predominantly of major City and international organisations that reflect the cause of global trade. Its spokesman in discussions with the Government is Peter Tudball, the chairman of the Baltic Exchange, who has done much to raise the issue, not to be difficult but to protect London as a centre of world trade. I wholeheartedly support that attitude.
On being advised of the present position, the committee considered the matter so serious that an immediate approach should be made to Government. Its aim was to ensure that all concerned were made aware that it is not only the lawyers of the court who believe that a properly manned commercial court is essential for the continued well-being of many City institutions, which provide international service and thus enable Britain to earn its living in the world. It believes that a total of four new judges are required.
The situation is now such that the judge of the commercial court list recently wrote:
To my mind, the Commercial Court is no longer merely in a state of crisis. It is about to reach the point when it would be dishonest to continue to pretend that it is capable of providing the service for which it was instituted.This autumn, Lord Donaldson, a former Master of the Rolls, said:The situation has gone from crisis to catastrophe.If that is true, it is a very serious matter indeed. In drawing it to the attention of the House, I have sought to show that the problem can be resolved.It is not clear to me how we have reached this position. I am aware that the Government must exercise restraint in public expenditure, but there is a solution for the commercial court. The sums of money in dispute in the commercial court are huge and run to millions of pounds, but the writ fees are insignificant. If the writ fee were raised to £1,000 for every case filed in the commercial court, it would be a drop in the ocean to the users of the court, but it is estimated that it would raise £2 million per annum.
That would make the court largely self-financing, would allow for the appointment of even more judges, and might leave a small profit for the Treasury. Perhaps that will help the Treasury to review the situation and allocate more funds directly for more judges in the commercial court.
On that happy note of suggesting a small profit for the Treasury, I look forward to hearing my hon. Friend's proposals for sorting out this situation. I emphasise my belief that this institution is a credit to the Government, and that its problems are capable of resolution.
The Parliamentary Secretary to the Lord Chancellor's Department (Mr. John M. Taylor)I acknowledge the concern that has been expressed by my hon. Friend the Member for Croydon, South (Mr. Ottaway) about delays in dealing with the work of the commercial court, and I congratulate him on securing this Adjournment debate.
355 I should first explain that the commercial court is part of the Queen's bench division of the High Court and came into existence in 1895 to provide a tribunal with greater familiarity with the subject matter of commercial and mercantile disputes and procedures to enable those disputes to be justly determined expeditiously, effectively and without undue formality.
Those remain the objectives of the court, which operates a system of fixed rather than floating lists because its users, many of whom carry on their businesses in foreign countries, are given fair notice of when they will be required to travel to London, so they know in advance when their disputes and differences will be resolved.
Under section 6 of the Supreme Court Act 1981, the Lord Chancellor nominates the High Court judges who may then be deployed to sit in the commercial court. Apart from the commercial judge, who is in charge of the list and who sits full-time in the commercial court, the others who sit there are drawn according to need and availability from the pool of judges nominated by the Lord Chancellor.
The work load of the commercial court has shown a steady increase, year by year, since 1988. The number of judicial sittings has also increased proportionately, from 936 days in the year to July 1988 to 1,256 in the year to July 1992. The commercial court had reached a relatively stable position and had been able to allocate trial times for parties who were ready for trial. Recent promotions to the Court of Appeal have, however, had a temporary effect on waiting times.
At the beginning of the last legal term, only five judges were made available from the pool of nominated judges to sit in the commercial court, although lists were planned on the basis that six judges would be available to sit. Of those five judges, two were tied up on cases which had considerably overrun their time estimates, as my hon. Friend indicated. Two others were involved in cases which were expedited—that is, ordered to take priority over other cases in the list. There was therefore only one other judge available to take the cases at that time. All five were, however, transacting the business of the commercial court.
It was not possible to secure immediate replacements for judges who had been promoted to the Court of Appeal. The pool of suitable practitioners is relatively small, and full-time appointments of judges suitable for nomination to the commercial court bench are difficult to arrange, especially as appointees may have other commitments to be met. I am pleased to say that further nominations have now been made, and the Lord Chief Justice has additional judges available for him to deploy in that court.
On 30 November, the Lord Chancellor nominated a further judge, Mr. Justice Tuckey. On 9 December, he further nominated Mr. Justice Colman, who was appointed to the High Court on that day. On 11 January, Mr. Justice Clarke, another new appointee to the High Court bench, was also nominated, to bring the number of nominees in the pool up to 10 who, together with the commercial judge, thus providing 11 judges who are currently able to sit in the commercial court, although I understand that there has had to be some replanning of lists for the current term because of last term's difficulties.
Of course, some of the judges who sit in the commercial court have other commitments. Two of the High Court judges who sit in the commercial court are presiding judges on circuits, and visit those circuits for part of the legal term. Others are also deployed to sit in other parts of the 356 Queen's bench division, the Court of Appeal, the divisional court and the Crown court from time to time by the Lord Chief Justice.
The day-to-day deployment of judges in the Queen's bench division is a matter for the Lord Chief Justice. While it is important that fixtures arranged in the commercial court several months in advance should be kept, the Lord Chief Justice, in deciding on where judges are deployed must, of course, give due weight to the needs of the Crown court, the Queen's bench division, the Court of Appeal, criminal division, and the divisional court. The Lord Chancellor and the Lord Chief Justice consider a reduction of waiting times in these latter two courts to be of the utmost importance at this present time. At any one time, therefore, there will be difficult questions of priority to be decided in the allocation of judges. This is an important point and one which is accepted by the commercial court judge.
As the Lord Chancellor explained in the other place on 22 October 1992, in response to an unstarred question from Lord Irvine of Lairg, there is some difference between the waiting times in the various parts of the High Court, and this is true within the Queen's bench division itself. The most recent figures I have seen illustrate these differences. In the warned list, the statistics show that waiting times have halved since June 1991, from two months to one month, while the waiting times for fixtures and after fixtures fell from 15 months to eight months and from six months to three months respectively. There have been improvements in waiting times in other areas of business.
The overall picture is a very complex one, and there is no doubt, therefore, that the situation requires a thorough review. It is one thing to believe that, because of delay, more judges seem to be required; it is quite another to determine how many and on what basis.
It has been said that there is a need to plan for more judges overall, so as to ensure that enough are available in all jurisdictions, including the commercial court. That there should be sufficient High Court judges to hear the most serious, sensitive or complex cases is a natural public concern, and in recognition of this concern, the Lord Chancellor and the Lord Chief Justice have asked a group of senior judges and officials to provide advice on the work, deployment and numbers of High Court judges. The group is chaired by Lord Justice Kennedy, and its other judicial members are the Deputy Chief Justice, Lord Justice Watkins, Lord Justice McCowan, Lord Justice Scott, Lord Justice Rose, Mrs. Justice Bracewell, Mr. Justice Johnson and Mr. Justice Macpherson.
The group's first meeting was on 5 October 1992. It has met several times since then. The chairman has commissioned material relating to the work, deployment and numbers of High Court judges from members of the group and from other members of the judiciary who have responsibility for, or knowledge of, specialist High Court jurisdictions.
The advice which the Lord Chancellor and the Lord Chief Justice are seeking would cover a number of areas. The first area is what work, civil and criminal, it is appropriate for High Court judges to undertake and merits their expertise and what work can be left to others. The second is how High Court judges should be deployed to dispose of that business, having regard to the relative needs of the circuits and, in London, of the Court of Appeal, the three divisions of the High Court, the 357 employment appeals tribunal and the other commitments they must meet. The third and related area is the system for deploying High Court judges, including the information needed to allocate appropriate business to them and to deploy them flexibly within the courts' structure to carry the work out.
It is hoped that the advice will help to address the number of High Court judges not simply in terms of needing more, or indeed fewer, to meet immediate demands, but in developing a more systematic method of determining those numbers.
The commercial court judge has contributed his views and those of the users of the court—to which my hon. Friend referred—to the group of judges and officials, and these views will be taken fully into account. It is hoped that the advice will be received soon, but until it is received it would be premature to speculate or reach conclusions about how many High Court judges are needed adequately to discharge the work load falling on them in all or any of the jurisdictions in which they sit, or how best they should be deployed to meet it.
I think it pertinent to mention finally that, since the Lord Chancellor came to office in October 1987, the number of High Court judges increased from 79 to 85 in June 1992. Although that number has fallen very recently to 83 because of promotions and retirements, steps are being taken to bring the number back to 85 as soon as is practicable.
It has been suggested that fees should be increased to pay for more judges in the commercial court. I am grateful for this suggestion. Supreme Court fees are currently subject to review, and I have offered to meet my hon. Friend to hear his views on that. The commercial court cannot, however, be seen in isolation from the rest of the court service and there could be no guarantee that increased fee income would translate directly into increased "judge power" in the commercial court.
358 It has also been suggested that the problems of the commercial court might lead to a significant decrease in this country's invisible earnings. I find it improbable that a temporary reduction in the total number of judges available to sit in the commercial court will do any long-term harm to its excellent reputation.
I have been asked whether the advice of the group of senior judges and officials will be published. It is unclear yet whether the advice will be in a form which could be published. Parliamentary and Privy Council approval is required to increase the current statutory limit, so in the normal course of events, any changes which were proposed to be made as a result of the advice would come into the public domain.
I should add, however, that, even if an increase in High Court judge numbers were agreed, the need to seek such approval and the problems of disengaging candidates from their current practices would mean that some time would inevitably elapse before any appointments would become effective.
The list of judges, then, nominated to sit in the commercial court as at 11th January 1993 was as follows: Mr. Justice Sheen, Mr. Justice Hobhouse, Mr. Justice Saville, Mr. Justice Gatehouse, Mr. Justice Phillips, Mr. Justice Potter, Mr. Justice Waller, Mr. Justice Cresswell, Mr. Justice Tuckey, Mr. Justice Coleman and Mr. Justice Clarke.
Mr. Justice Sheen is the Admiralty judge and devotes about 20 per cent. of his time to the commercial court. Mr. Justice Waller and Mr. Justice Potter are also presiding judges on circuits.
I should like to thank the House for the opportunity to reply to the points raised by my hon. Friend and, once again, to congratulate him on securing this Adjournment debate on a very important subject, about which I know he cares very sincerely, and of which he has considerable knowledge.
§ Question put and agreed to.
§ Adjourned accordingly at Twenty-six minutes past ten o'clock.