English Justice: the £6bn problem

English Justice: the £6bn problem

In his autumn budget statement, Chancellor Philip Hammond did just about enough to win some public approval with modest tax cuts and a further boost to NHS funding, most notably in mental health provision. Planned spending for the Department of Health is set to rise north of £130bn with the NHS in England set to get an extra £20bn a year by 2023 as a 70th “birthday present” in the words of Theresa May.

But there was no similar birthday present for legal aid, which was established by the Legal Aid and Advice Act 1949 – at the same time and by the same Labour government as the NHS. But legal aid has never gained the same level of public affection or attention compared to its health service counterpart. Fewer people need to use legal aid compared to the NHS while lawyers can never enjoy the same place in people’s hearts that doctors and nurses do – their importance is less tangible to the average citizen. However, for those who are dependent on legal aid, the consequences are very real.

The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) cut public spending on legal aid by £450m a year when it came into effect in 2013. And according to Hammond’s latest budget, Ministry of Justice (MoJ) expenditure will shrink from £6.3bn in 2018/19 to £6bn in 2019/20 – a further cut of 4.8%. This means that the MoJ will have endured a real-terms cumulative decrease of 40% since 2010/11 as its budget has been cut from £9.3bn (at current prices in 2010/11) to £5.6bn by 2019/20 – the largest single decrease of any government department over that time period.

Putting the politics of austerity to one side, these cuts inevitably come at a price. As Supreme Court judge, Lord Wilson of Culworth, said in September: “Access to justice is under threat in the UK.” Andrew Walker QC, Chair of the Bar Council, which represents all barristers in England & Wales went further in response to Hammond’s budget:

“Despite new research that shows that, for 78 per cent of the surveyed public, justice is as important as health and education, the Chancellor of the Exchequer has chosen to leave the Ministry of Justice high and dry by slashing its budget yet again, by another £300m to £6bn.  The Ministry of Justice is becoming the pauper of Whitehall, with the courts, prisons and legal aid seeing no way out of their current crisis.  Even if the Chancellor has been cooped up in Number 11 Downing Street, he cannot fail to be aware of the day-to-day challenges our justice system is facing. Failures in the system are coming to increasing prominence; cases are collapsing, vulnerable people are having to defend themselves in court, and many are unable to get access to legal advice when they need it.”

He invited the Chancellor to “leave the Westminster bubble and experience the real world in our courts and advice centres, to see what a lack of investment in our once renowned justice system looks like to those involved.” But it is not just legal aid services that are being affected. Because of MoJ cuts, there have been multiple court closures: 126 court premises in England and Wales have been sold off since 2010 with a further eight proposed court closures announced in January.

Adding to the problem is a shortage of judges – even at the top end. The Senior Salaries Review Body (SSRB) recently recommended that High Court judges be awarded a 32% pay increase, while a 22% jump was suggested for circuit judges. On the Friday before the budget, the government announced: “Judges will be granted their biggest pay rise in 10 years with an annual increase of 2%.”

The rise may have been in line with those of other public-sector workers, such as doctors and police officers, but it will do nothing to solve the judicial recruitment crisis. There are eleven High Court vacancies unfilled out of a complement of 108. The Lord Chief Justice, Lord Burnett, recently said that because vacancies are not being filled, the vacancy figure could double, leaving the High Court at 20% below its full complement.

Of course, the commercial disputes fought over in London operate in a parallel universe, where disclosure exercises for individual cases can run into tens of millions of pounds, elite commercial law firms bill out partners at £1000+/hour and the top commercial silks earn more than twenty times the salary of a High Court judge. Commercial lawyers are immune to the problems facing their publicly funded brethren.

But are they? Well, the answer is no. The common interface between the two sides of the profession comes with the courts and the judges. In 2011, 31 new courts opened in the £300m Rolls Building, three of them customised super courts. This is where most big-ticket commercial disputes play out with around three quarters of litigants coming from overseas.

Since then, more than 70% of disputes in London’s Commercial Court have been brought by overseas litigants, originating primarily from Russia, Kazakhstan, the US and Switzerland. Underpinning the choice of London as the place to settle their disputes by this army of litigants is the quality of English judges at the top end, in particular their reputation for fairness and impartiality. In breadth and depth, they are seen as being without equal.

However, this perception is changing, albeit incrementally. Some new appointees to the High Court bench are not of quite the same calibre as the men and women they are replacing. No QC or judge will go on the record and say so, but off the record they will tell you in hushed tones that they are worried about judicial standards being maintained: not enough of the best and the brightest are being appointed.

Sensing the problems in London – compounded by Brexit – international competition is increasing. The commercial courts in Singapore, Dubai, and the new English-speaking court in Paris certainly have a very long way to go to match London’s pre-eminent reputation. But incrementally, they are catching up – in economic terms, by increasing their market share.

For example, The Singapore Ministry of Law has completed plans for Maxwell Chambers – an integrated alternative dispute resolution (ADR) complex – to triple its current capacity by next year adding 120,000 sq ft of specialist facilities. Maxwell Chambers has already attracted a clutch of high profile English QCs, former judges and top flight international arbitrators. Needless to say, it is supported by infrastructure and IT which is at the cutting edge.

Back in 2011, the Ministry of Justice and UK Trade & Investment (now the Department for International Trade) published Plan for Growth: Promoting the UK’s Legal Services Sector, promoting London as an international ‘hub of expertise’. The initiative seems to have been lost by the wayside. Commercial litigation in London has plateaued and by some benchmarks, is falling. Commercial silks are almost as likely to be engaged in Singapore, the Cayman Islands or Hong Kong as they are in the Rolls Building.

And yet legal services are supposed to be one of the jewels in the crown of the City of London, generating nearly £30bn in revenues each year for the top 100 commercial law firms – a good part of it from dispute resolution.

How Britain forges its place in a post-Brexit world remains to be seen. For London’s dispute resolution lawyers, the continued chronic underfunding by the MoJ of the courtroom infrastructure and of the men and women who sit in judgment to hear commercial cases must be a real cause for concern. Now is their moment to speak out: £6bn is simply not enough.


Dominic Carman

Written by:

Dominic Carman, journalist, writer and legal commentator.

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Author: Dominic Carman