LCJ calls for development in provision of justice outside London

The new rule on proportionality in litigation could reverse the trend towards the use of London lawyers and the courts in London to do work that could be properly carried out outside the capital, the new Lord Chief Justice has signalled.

In his first major speech since his appointment, Lord Thomas argued that there were good reasons for providing greater opportunities for access to justice in places other than London and moving the emphasis away from the capital.

The judge said the provision of justice out of London should be developed for five reasons:

1. Providing justice out of London across the whole of the business of the High Court would provide access to justice without the cost to the parties of coming to London.
2. It would enable cases to be heard in the area in which the dispute has arisen; “for example, when the decisions of a local authority or employer are challenged in a court, the public and the local media should have ready access”.
3. The provision of justice is important to the local economy, “as the money expended is retained locally and the profession locally is strengthened”. It also encourages the growth of real rather than back offices.
4. As lawyers out of London charge less and the provision of court accommodation is cheaper, litigation costs would be less.
5. Within the jurisdiction of England and Wales, it was important to respect the separate governance of Wales, particularly as the laws of England and Wales are diverging in some areas, “a trend which will continue, given the recently conferred power on the National Assembly of Wales to make primary legislation”.

Lord Thomas said deploying judges out of London on a more efficient basis would not be enough on its own. He highlighted the lack of a modern IT system as an impediment to proper deployment.

Although many out of London centres have good modern courts, not all do, he added. “Last year we were unable to deploy a High Court judge to hear a long case involving a local council in the major city to which the litigation related, as there was no available courtroom.”

The judge said longer term investment should be seen in the wider context that providing more justice out of London would provide better justice, strengthen the profession outside London and benefit local economies.

Lord Thomas said the legal profession needed to be structured and motivated to support the delivery of justice out of London.

“There plainly is a problem,” he said. The judge provided two illustrations:

• 85% of advocates appearing in the Administrative Court in Cardiff did not practice there; “the greater part of that 85% practices in London.”
• There seemed to be an increase in the number of proceedings issued in the High Court in London or proceedings transferred to London where there was no apparent reason to do so. “Such cases ought properly be issued and pursued in the High Court or County Court at one of the out of London civil justice centres.”

Lord Thomas said it was not entirely clear why this was so given the transformation that had taken place in the Civil Justice Centres out of London.

“It may be that the transformation has not been sufficiently appreciated,” he said. “There may, however, be issues in relation to the way in which the provision of advocacy in some areas of law is now increasingly concentrated in London and in relation to the recoverability of solicitors’ costs.”

The judge highlighted unpublished research on the Administrative Court suggesting that the provision of public law service was “fairly well developed” in and around Manchester and this was in marked contrast to the figures for Cardiff.

The Lord Chief Justice gave a number of reasons why this mattered.

• A bar where advocacy in what have been traditionally regarded as specialist areas (such as administrative law) is provided predominantly by barristers based in London “does not make for a bar that is cohesive”;
• The local availability of advocacy, at what must be a lower cost than in London, was important for access to justice.
• It was important to the local economy.
• This was a problem that, if not addressed will get worse; “when the last advocate in a city with local expertise in a particular subject ceases to practice, it is very difficult to re-establish that expertise in that city”.

Lord Thomas acknowledged the view that clients look to the legal directories, which seldom include the local advocate with a developing practice.

“But cannot this be overcome by locally based clients with an interest in the local economy (particularly local government authorities) nurturing local advocates by encouraging their use for smaller cases whilst they develop their practice and requesting leaders when instructed to use locally based junior advocates?” the LCJ asked.

Strengthening the position of local advocates was an essential step in the provision of local justice across the whole spectrum of the work of the High Court, he added.

The LCJ said London had no monopoly on skill or experience. “In the age of the internet, of tele-conferences, Skype and Facetime there is no reason why a litigant should not or could not properly instruct a lawyer from outside London to work for them at a cost significantly less than in London but with equal quality experience in most fields.”

The judge said the “serious impediment” in reducing the costs of domestic litigation was reflected in a trend towards the use of London lawyers and the courts in London to do work that could be properly carried out by lawyers based outside London in courts based outside London.

“The impetus for this may well be the fact that higher rates can be charged and, in respect of litigation, recovered from the paying party in the event that the London firm’s client is ultimately successful,” he said.

However, Lord Thomas pointed to the Court of Appeal case in Truscott v Truscott & Others; Wraith v Sheffield Forgemasters on recoverability of costs, in which Kennedy LJ set out a series of factors that can be taken into account in determining whether it was appropriate to instruct local or London solicitors.

The judge said it was important to note that the legal services market had undergone a transformation. “There are in fact only a few types of case that truly require the party to employ a firm that is based in London for out of London work and which charges rates that are greater than rates which are charged elsewhere by firms that can do the work equally well and, given modern communications, as conveniently.”

He added: “Of course a party is entitled to employ any firm it wishes in any city, but if the party does instruct a London firm for out of London work, it should do so in the knowledge that in the event of success, it will be necessary to explain to the court at the costs budgeting stage or on any assessment why it was reasonable to use a London firm for such a dispute. The differences in costs are now huge.”

The Lord Chief Justice revealed that he sat in a Divisional Court case relating to Wales in October 2012 in Cardiff where there were two interested parties – the Coal Authority and Welsh local government authorities.

The Coal Authority had instructed the Sheffield office of a national law firm, and sought recovery on the basis of hourly rates of £198.12 for a partner, £170.69 for a solicitor at grade C and £96.52 for a trainee.

The Welsh authorities meanwhile used the London office of the same firm, and sought recovery on the basis of hourly rates of £510 for a partner, £221 for a solicitor at grade C and £148.75 for a trainee.

Lord Thomas said the judges observed of the two offices: “We have seen their work and the work is of exactly the same standard; indeed the Sheffield one can be said to be a little better.”

The Court of Appeal held that it was not reasonable for the Welsh authorities to have instructed London solicitors.

The LCJ said the advent of the national firm, the huge differences in rates and the increased emphasis on proportionality the Jackson reforms had introduced into the conduct of litigation were all matters that have arisen since the judgment of Kennedy LJ in Truscott.

“It may be that this will necessitate a reconsideration of the factors that go into an assessment of whether it was reasonable to instruct London solicitors in cases where the dispute arises out of London,” Lord Thomas said. “Kennedy LJ may have noted the duty to avoid higher costs. It will be interesting to see the view that the Courts take of that duty now. Will it be seen as one that carries with it the requirement that instructing parties have to consider how best to ensure that costs are proportionate to the claim? Will this go beyond simply avoiding higher costs than would otherwise be incurred?”

Lord Thomas added that if proportionality did have this effect, in addition to its wider effects on costs through budgeting and costs assessment, it might well serve to increase the impetus for clients in cases arising out of London to use expert local firms or, if a national firm were instructed, to ask the question of their solicitors why the work, or the bulk of it, was not done in an office out of London and charged accordingly.

“The location of an office in London cannot in such litigation justify London rates if the work is or can be done at an office where the costs are materially less,” he suggested.

The LCJ accepted that there had always been work that required lawyers from a particular area.

However, he added that there was a vast amount of litigation, “including what has traditionally been seen as specialist such as much traditional chancery work and administrative court work”, that could properly be litigated outside London by local firms where that work arose out of London.

The courts will do all they can to encourage that, Lord Thomas said.