In 1973, as a young lawyer just entering practice, I negotiated a commercial lease with Norman Shieff, then a doyen of Auckland commercial lawyers. The lease had to have dispute clauses in it, Norman told me. The courts system is slow, expensive and old fashioned, and if our clients ever have a problem they need to be able to avoid the courts, Norman insisted. Forty years later I left legal practice with a similar view. Keep your clients out of court, if you possibly can.
Court statistics support this view. Although they are not fully comparable, because the jurisdictions of various courts change from time to time, and events such as the Christchurch earthquake can produce spikes, generally the number of civil cases (i.e., disputes between citizens) has been steadily falling over the years.
In the High Court, the number of General Proceedings (i.e., civil disputes) has gone from 1,666 in 2015/16 to 1,533 in 16/17, to 1,460 in 17/18 and 1,130 in 2018/19. In the District Court there were 895 defended civil cases in 2017/18 compared to 14,584 defended cases filed in the Family Court that year. Perhaps legal aid is the reason for the large number of family law cases each year. Perhaps you have to file there to get your case moving, I do not know. I mention the Family Court figure to show how few civil disputes end up in other courts by comparison.
Five million New Zealanders now produce only just over 1000 High Court civil cases a year (excluding specialist courts for employment, family and tenancy issues and lower level cases in the Disputes Tribunal). It is fair to say, citizens avoid the courts in seeking to resolve their conflicts with fellow citizens. There must be many, many such disputes which do not end up in the court system.
And yet the courts are an invaluable part of our democracy. An independent court system that will fearlessly rule on government, executive and state agency actions and when appropriate order them back into line, is an indispensable part of a free society. Government and politicians must play by the rules just the same as ordinary citizens.
An efficient system for resolving disputes is also an important part of a successful free market economy. A country’s legal system needs to provide early and effective upholding of property and commercial rights, at reasonable cost, if the country’s economy is to work well. The New Zealand court system does not do that.
How is it that such an important part of our constitutional and economic framework has apparently got so far out of step that it is no longer generally the forum of choice when New Zealanders get into disputes with their fellow citizens?
Expense is clearly a major factor in keeping people out of the courts. Legal fees, especially for barristers, run at hundreds of dollars per hour. Then there are court filing fees and hearing fees – another few thousand at least for most cases. To be fair to the courts, life is far more complex today so when disputes arise they are almost inevitably more messy to sort out than disputes 50 or 100 years ago. Some of the increase in the cost of civil litigation partly reflects rising complexity.
But a more serious concern for would-be litigants is that once you file in court you lose control of your affairs. The court sets the timetables. Often the other side is incentivised to use the court procedures to delay the case. Ultimately, if the case goes to a hearing, the judge decides. As appeal cases show, they do not always get it right. I won cases I thought I was going to lose, I lost cases I thought were certainties. Every lawyer who is honest will concede unexpected outcomes are a part of the court system. Put more extravagantly, litigation is a lottery.
I used to say to clients: once you start a court case, it is like having a half built house. You have to keep spending money to finish the house even though you don’t know how long it is going to take and how much more it will cost. Who wants to put themselves in the hands of a system they don’t have control over?
Then there is delay. Dotcom was arrested on 20 January, 2012. More than eight years later, June 2020, a decision is still awaited from the New Zealand Supreme Court as to whether he should be extradited to the USA. Yes, the case has some unusual features. No, it is not a civil dispute. But it is unfortunately a sad example of how a litigant with plenty of money can delay the court system and the court system is unfortunately ineffective in preventing this from occurring.
In the High Court, in criminal cases, the median waiting time between committal for trial and the actual trial itself is around 380 days. Yes, that is the criminal not the civil jurisdiction, but must we keep defendants waiting for more than a year before they get a decision on their case? Their life will be on hold for that period.
In the High Court, as at June 2019, there were 282 cases across the country with a scheduled hearing. The average waiting time for those cases to obtain a hearing was 436 days, the median waiting time – 385 days. After your case has gone through all the interlocutory hoops (discovery, etc.) you then have to wait more than a year to have it heard. If this hadn’t been the norm for many years (lawyers are now accustomed to the delays and no longer notice them) it would surely be seen as ridiculous. In many cases the lives of civil litigants are also on hold while they wait for their cases to be resolved.
After your civil case has been heard, the chances are the judge will deliver a written judgment some time later. Around 90% of reserved decisions are delivered within three months of the conclusion of the hearing, so add another one to three months before your case is decided.
Then there are court costs. Depending on whether you win or lose, and which court you are in, you either pay costs to the other side if you lose or receive costs from the other side if you win. There are generally no court costs in the Family Court and limited costs in the Employment Court but with a decent civil case the court costs can amount to many thousands of dollars which, if you lose, is on top of your legal bills. That is another major worry for most litigants.
Then, once your case has gone through the court system and a decision has been issued, you imagine everything is finally resolved – until there is an appeal. That means potentially another couple of years to get the appeal heard and determined.
When I watch sport now, and there is a television review of a referee decision, I always think of the comparison with real life. The review of the referee’s ruling comes at no cost and within a maximum of a minute. Then the game continues. Yet in real life, judicial intervention comes years after the problem or dispute has occurred, at huge cost. Lives are put on hold in the meantime. Imagine what sports fan would say, if they had to go through a similar process to have their disputed calls resolved. While litigants clearly can’t get instantaneous resolution, surely they could aspire to a system which is a significant improvement on what is available to date.
COURT SYSTEM INADVERTENTLY ENCOURAGES DELAY
Possibly the worst aspect of the court system is that when people get into a dispute, at least one side is generally a reluctant participant and wants the dispute to go away. The human mind is very adept at shutting out bad news it doesn’t want to face. The court system offers numerous avenues for delay which provide the reluctant participant with exactly what they want – opportunities to put the problem off for another day. We all hear about cases being settled ‘at the court door’. When the court proceedings have ground on for a couple of years (and the parties have already spent heaps) and the hearing date is at last imminent, finally the reluctant participant has no choice but to address their problem – and in around 80% of civil cases the parties then reach an agreement. What a waste of time, money, and worry for both of them. How much better off they would both have been had they been able to sit down right at the start and sort things out. Unfortunately the court system with its major built in delays, encourages procrastination among litigants and indirectly significantly contributes to the resolution of disputes later – much later – than they could have been settled.
I could go on, but this list should be sufficient to make you realize our present civil court system is a good place to avoid. And the falling number of court cases show that is what people generally do. Increasing civil legal aid is definitely not a solution. All that does is encourage lawyers to take their clients into a system which unfortunately is not ideal to sort out their client’s affairs in the first place.
LESS JUDGE MADE LAW
There is another problem. When a judge gives a decision on a case it creates a legal precedent that is generally followed in later similar cases. With fewer cases being taken to court, legal precedents are being created less frequently. Many lawyers think this is unfortunate – that judge-made law is no longer developing as prolifically as in the past. On the other hand, Parliament has been in overdrive in the past 50 years, passing massive amounts of legislation seeking to order vast swathes of our lives. If we are getting more new law from politicians and less new law from the judiciary, it is not clear the reduction in judge-made law is causing any significant damage to society.
MORE MEDIATION
When I started in the law in the early 1970’s it was common in a dispute for you and your client to meet the other lawyer and client and try to agree on a solution. Sometimes agreement was reached, sometimes not. Let us say 50% of these meetings were successful in reaching agreement. Then the idea of mediation appeared. A person – the mediator- sitting at the end of the table with the sole role of trying to assist the parties and their lawyers on either side of the table to reach an agreement. The mediator does not take sides, they do not make any legal decisions. All they do is facilitate the parties’ attempts to reach an agreement. Yet amazingly, a really good mediator – and it is a real skill – can increase the odds of an agreement being reached to over 90%.
The great advantage of this mediation system is that the parties keep control. They both finally have to agree to the resolution. That is a major advantage compared to putting your dispute into the hands of a judge and having a decision imposed on you. And once an agreement is reached at mediation, there can be no appeals – there is certainty the dispute is resolved once and for all. Yes, participants who regularly take part in mediation such as insurers, can play games at mediation and try to skew the process. Yes, some agreements come out of mediation which don’t always make ideal sense. But overall, I left legal practice with the view that mediation is a far better process to resolve civil disputes than adjudication.
MEDIATION SHOULD BE A COMPULSORY FIRST STEP
Courts tend to be ambivalent about mediation because it takes interesting cases out of the court system. I always felt there should be compulsory mediation as an early first step soon after court proceedings are filed, and perhaps once each side has filed its pleadings. The response to that suggestion was that you can’t force parties to agree: they have to be ready to sit down and attempt a resolution before mediation can be considered. But this suggestion ignores the natural human inclination to procrastinate. If you compel the reluctant litigant to come to a mediation soon after the court proceedings have been filed, and a good mediator tells them this problem isn’t going away, I have little doubt agreement will frequently be achieved; to both the financial and emotional benefit of the litigants and the additional benefit of quickly removing cases from the court lists. This change is long overdue. It would also help unclog the courts, and allow them to reduce substantially the average time a case which cannot be settled at mediation takes to work through the system. If the parties then appeal, early mediation should again be compulsory. It can be usefully attempted at each court level before a case goes on to be adjudicated at that level.
FOCUS ON LITIGANTS FOR A CHANGE
There is a marvellous quote from the Australian Productivity Commission, in the chapter on Health above, which describes the patient as ‘an unwelcome guest’ in the Australian medical system, which the Commission suggests is run by doctors for doctors. Unfortunately all the other professions, including the legal profession are somewhat similar in their approach. Some competitive pressures have improved the service ethic in parts of the professions- and especially in the part of the legal profession which interacts directly with its clients, rather than through the court system. But if serious improvement of the legal profession and especially the court system is ever to be attempted, surely the place to start is the customer. Do extensive surveys and find out what the litigants report on their experiences of the court system- and try and deliver improvements in the system which address this feedback.
Making the legal system customer focused, rather than lawyer and system focused, would require a major change in attitudes within the profession- but if it was achieved, would be a huge step forward. I suspect litigants would strongly criticize cost and delay in the present system. So (in addition to mediation) both of these need to be cut out of the present court system, for any meaningful improvement to be achieved. Are lawyers in a frame of mind to re-write their Court Rules, to simplify the whole system, and reduce its cost? Not that I have detected. Might they ever attempt such a change? Hope springs eternal.
COMPLEXITY A MAJOR ISSUE
The bound volumes containing the 1908 reprint of New Zealand Statutes (i.e., all the parliamentary laws then in force) took up about 30cms of shelf space. The volumes containing the 1957 reprint probably took up 90cms of shelf. Before statutes were all computerised within the past 10 years we had a WHOLE WALL of New Zealand statute books in our law office. And the thing which used to amaze me as I watched the mountain of new laws flow out of Parliament: it made no difference which political party was in power. Unseen people were beavering away behind the scenes in the bureaucracy producing a constant stream of new legislation that politicians of whatever political persuasion did little more than rubber stamp. Then the courts got more adventurous in the judgments they issued. So when a lawyer writes a document today there is always a tendency to try and provide for many situations in the hope future intervention in the lives of your clients by Parliament or the Courts, can be avoided or at least minimised.
More laws and more creative judgments lead to more complicated legal documents. And with lawyers paid on hourly rates and given word processors, they are incentivised to turn out (and often do turn out) lengthy legal documents which their clients frequently do not understand. All of which helps put another layer of cost on our economy and make it less efficient. If we are going to have an economy that is competitive with firms and economies in the rest of the world, we need to limit the cost and complexity of legal services.
In my assessment the legal system is now unduly complicated. The benefit delivered by new laws no longer outweighs the costs and restrictions they impose on our economy and our society. Every political party gets elected promising to cut red tape; none ever delivers. Somehow we must simplify the law, cut legal costs for the public and reverse this process, but I am at a loss to suggest how. Lawyers are financially insentivised to see and achieve increasing complexity. More information technology, better communications, go hand in hand with the legal express train, all hell bent on making modern life more complex and pressured – and all of us arguably worse off.
IN SUMMARY
Avoid the courts if you possibly can. Make mediation compulsory early in the litigation process. Try and make the system more customer focused. And try to slow (if not wind back) the increasing complexity in the law and in modern life. But there are disappointingly few obvious solutions to make the law more efficient, cost effective and more in touch with society.
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Covid – Catalyst for Change 