Sir Geoffrey Vos, chancellor of the High Court, delivered a speech at the launch of TheCityUK’s Legal Services Report 2020, looking at civil justice reform and technology.
May I first add my congratulations to Miles Celic and James Palmer and Scott Devine and all at TheCityUK for an excellent report aptly entitled “Legal Excellence Internationally Renowned”.
It is extraordinary that the revenue generated by legal activities in the UK rose yet again in 2019 – before the terrible pandemic struck, of course - to £36.8 billion, up 3.9% year-on-year and up 44% since 2010.
At the Bar Conference last week, I expressed the view that the UK’s jurisdictions can and will remain a go-to place for international commercial litigants, and that English law will remain one of the most important respected legal systems in the world.
I said there were 4 reasons for that view as follows:
- The integrity of the UK’s judges and of the UK’s judicial systems is undoubted, and will continue to be respected globally.
- The UK’s lawyers are widely respected for their quality, integrity, and pragmatism.
- These are things that will not change as a result of the UK’s departure from the EU.
- London arbitration supported by the Commercial Court and the Business and Property Courts will continue to provide an efficient and popular service for international business.
- The UK can and will bring about technologically-based reforms of its business justice system to make them fit for the 21st century and for the age of big data, a ubiquitous internet, smart systems, artificial intelligence, smart contracts and the blockchain.
I concentrated in that speech on the fourth reason, about which many of you may have heard me wax lyrical quite frequently over the past 3 years.
This morning, however, I want to say something about the value of the UK’s domestic legal services to the UK’s economy. The Lord Chancellor made the point briefly a few moments ago, when he said that the legal services sector was an enabler in our economy: “it gives confidence to businesses, allowing them to trade with the certainty that there is a framework of fairness in the English legal system, as well as world-class UK legal professionals available to support them in coming to agreements and resolving disputes where they arise”.
If I may, I want to take these points a little further. As has been mentioned already, as Master of the Rolls, I will become Head of Civil Justice in the New Year. That has led me to consider legal services and the provision of civil justice more generally.
I have spoken in the past about the importance of the services provided to the international commercial and financial services community by the Business and Property Courts for which I currently have responsibility.
How important then is civil justice across the board to the UK economy? The answer, I think, is very important indeed.
There is no doubt that a respected system of commercial dispute resolution and arbitration is vital for those considering inward investment in any jurisdiction. The risks of investing in countries without the rule of law and without a functioning justice system are well understood. Fortunately, our trusted judges and arbitrators and our Business and Property Courts have stood the UK in good stead.
But the civil justice available to individuals and to small and medium enterprises (SMEs) across the regions of the UK has a significance beyond what seems obvious, and is less well understood.
There are many millions of civil claims every year up and down the country. They may relate to monies owed to builders, plumbers, shopfitters, software firms or suppliers of every kind of goods and services. But each of these claimants has a business or, if not a business, their own personal finances to be concerned about. Non-payment can be the difference between continued trading and insolvency.
Delays in payment, and delays in the recovery of monies owed through the civil justice system can create a massive drag on the economy. Many of the claims I am talking about are ultimately not seriously disputed, but the inability to resolve them speedily is nonetheless hugely damaging to the economic wellbeing of large numbers of local economic actors.
The current paper-based system in the County Court is years out of date. It is laborious and inappropriate for a society in which everything else is done digitally or online. It is inherently slow and lacking in agility.
The HMCTS reform project plans to digitise the County Court. That cannot come a day too soon.
The civil justice system is a vital part of our economic infrastructure. If multinational corporations chose not to export their goods to the UK because our ports built in 1745 were too shallow, we would deepen them or build new ones. Lawyers and judges alike sometimes fall into the trap of thinking of the system of justice as something free-standing. It is not. It is an essential part of our economic infrastructure.
Digitisation is essential to modernise the infrastructure, and create a system that allows our businesses and individuals – national and international – to perform economically at their best without impediment and delay to the vindication of their legal rights.
In addition to digitisation, I believe that we must try to create a ubiquitous streamlined online civil justice system to ensure that what is properly owed in all areas is paid promptly without the delays that the present systems allow. Disputes of all kinds are amenable to speedy online resolution. This has been demonstrated, for example, by British Columbia’s highly successful Civil Resolution Tribunal. An online process can operate effectively to resolve business money claims, personal injury claims arising from road traffic accidents, boundary disputes, possession or property claims, insurance disputes, and many more.
Small disputes are as important as big ones in economic terms. Big businesses can generally survive if the resolution of their litigation is delayed by the court process. Small businesses often cannot.
An efficient digitised and efficient online civil dispute resolution process will be of huge value to our economy. It will ensure that individuals and SMEs are paid what they are owed and can continue to trade. It will reduce unnecessary personal and corporate insolvencies and enhance access to justice.
It is worth noting that small companies are often the source of innovation, particularly in technology, and thus the bedrock for future growth, which makes it all the more important to have the infrastructure in place that enables them to thrive.
SMEs will be able to use our County Courts with confidence, knowing that they can invest locally with the certainty that they will be able to make use, whenever necessary, of a swift online recovery process that reaches a fair and just conclusion in days or weeks rather than months or years. Experience of the Online Civil Money Claims thus far shows that some claims can be resolved within minutes or hours of being initiated, making good the point I have just made about the importance of the system not being reduced because many of the claims are undisputed.
The reforms I am proposing will release liquidity in our economy and support investment in the UK. The quality of any country’s dispute resolution system is, as I have already said, greatly underestimated. Dysfunctional or dishonest justice systems deter investment, but even slow honest justice has a negative economic effect.
As we come to the end of the implementation of the UK’s departure from the EU, the UK’s unique selling points will be of even greater importance than hitherto. Our Business and Property Courts and ever-popular London arbitration supported by them are two such USPs. A strong effective digitised civil justice system must become a third, and online justice available to all a fourth.
Together these USPs will support the strength of our legal services’ sector, and stimulate growth and investment.
Civil justice has in the past been regarded as something of a poor relation to family, criminal and even commercial justice. It has perhaps been located in an ivory tower available only to a select few. We must make civil justice accessible to all local, national and international economic entities. I hope that the HMCTS reform programme will now put civil justice and small business higher up the agenda.
Legal UK is trying to do some important research on the true value of the UK legal services sector and the UK’s dispute resolution systems to our economy. I expect that research to produce some surprising results. Once we receive them, I am confident that it will become clear that the improvements I am suggesting are extremely good value for money.
Finally, can I reiterate the significance of TheCityUK’s report on legal services. Like the civil justice system, the influence of the legal sector as a whole on the UK’s economy is often underestimated. Your excellent report reminds us all of one of the UK’s most important economic drivers.