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Lord Chief Justice of England and Wales delivers lecture at Cayman Islands courts
Published on March 8, 2017Email To Friend    Print Version

lcj_john_thomas.jpg
Lord Chief Justice John Thomas responding to a question from the audience during the question and answer period following his lecture at the seventh in the Annual Distinguished Lecture Series at the Cayman Islands Courts. On the left is Justice Nick Segal

GEORGE TOWN, Cayman Islands -- Improving practices among commercial courts worldwide translates into strengthening international trade, commerce and development, and hence overall economic cooperation and prosperity.

Achieving and maintaining that equilibrium requires not only vigilance among a wide range of judicial, legal, governmental and public interest participants, but also a “system that recognises the commitment of the entire state to judicial independence, judicial impartiality, and the rule of law in all types of cases,” said the most senior judge of England and Wales, Lord John Thomas of Cwmgiedd, adding: “A commercial court, like that in London and here in the Cayman Islands, which can demonstrate its adherence to such standards, is one whose judgments are capable of enforcement across frontiers. It is a court which has real utility to the international business community.”

Thomas was speaking on Thursday, 2 March 2017, at the Cayman Islands courts on the subject of what business needs from commercial courts. He had been invited to deliver the seventh in the courts’ annual distinguished lecture series, administered by the Cayman Courts’ Judicial Education Committee (JEC) and attended by a wide cross section of professionals drawn from the Islands’ judicial, legal and governmental sectors.

The JEC, chaired by Cayman’s Justice Ingrid Mangatal, was formally introduced by the chief justice of the Cayman Islands Anthony Smellie in May 2016 with a view to promoting continuing excellence and efficiency in the administration of justice. As such, it is part of a drive to adopt a more formal framework for judges and magistrates’ continuing training and education, in which Lord Thomas’ lecture was instrumental. While here the lord chief justice was guest at a formal dinner staged jointly by the Caymanian Bar Association and the Cayman Law Society.

Explaining the link between the role of a commercial court and economic success, Thomas said, “[A] sound commercial court as part of a sound legal framework provides the basis for economic prosperity through providing a sure basis for the development of commercial and business transactions.”

He referenced the view of David Hume, the Scottish philosopher, historian, economist and essayist in depicting a commercial court as a “hidden hand guiding the economy,” though clarifying that while such management and influence may take place behind the scenes, “If our commercial courts are to play this role properly, their processes must be carried out in an open and transparent way. Justice cannot be done unless our courts and judges are themselves on trial whenever they are hearing cases -- on trial in the sense that they are subject to public scrutiny.”

In his lecture, Thomas outlined best practices and innovations in the UK and other international jurisdictions that are equipping courts to maintain their ethos as “centres of excellence” in an increasingly competitive “market in justice.” At the same time, he urged that commercial courts in different jurisdictions “work together to uphold the rule of law and so underpin international economic cooperation and prosperity.”

In the process, Thomas said, “Commercial courts must ensure that they… remain aware of changing business needs and market practices, that they innovate and continue to provide accessible, flexible, economical, efficient justice,” and added: “It is not a case of saying that the needs of business are king. It is more a case of saying that the quality of justice is king; and that is what each commercial court should aim to guarantee businesses.”

Tracing the development of the commercial court, Thomas acknowledged that courts had not “always been designed or operated with the needs of business (as) foremost.” In his lecture he set about highlighting some of the past and current developments towards addressing the gaps in responding to the preconditions of business.

This reformation of courts to create a more business-oriented “simple and flexible process” began with the establishment of London’s Commercial Court in 1895. Over time, however, that eroded into self-defeating complexity, “an endemic disease to which all legal systems are prone,” Thomas observed, resulting in a radical decline of the court by 1956.

To breathe new life into the waning commercial court, a 1957 conference resulted by 1961 in proposals of a number of reform measures, including revitalisation of the measure of arbitration that had faltered since its 1895 introduction. As a new twist to an old strategy, arbitrators were allowed to sit in private. In spite of the renewal of this long–standing approach, Thomas said arbitration has never been used widely, but added: “I have indicated my willingness to be much more favourably inclined to appoint judges as arbitrators.”

That and other measures coming out of the 1961 reform initiative resulted in “active case management” becoming the norm in London’s Commercial Court’s rise to the challenge of more effectively meeting the needs of business.

A similar transformation took place in New York in the 1990s, when specialist commercial divisions with dedicated specialist judges and more flexible rules were established.

But “each era has its own problems,” said Thomas, and despite progress courts need to remain vigilant against the longstanding challenges of “cost, complexity and delay,” while coping with emerging approaches related to “disclosure/discovery and realising the potential of IT.”

While rising to these challenges, by far the most important responsibility for courts was that of remaining attuned to business needs, Thomas said.

These approaches may include conferences, listening and responding to complaints when they arise, and introducing user liaison committees, “which are indispensable means of communication between the commercial judges, court administration, commercial lawyers, and business leaders, both domestic and international.”

However, while these are effective, Thomas said, the judiciary needs also to have “wide-ranging dialogue to check that the views of all -- particularly those who are averse to committees (or do not have the time) -- are properly communicated.”

To achieve this, Thomas said, “Those responsible for the courts that serve the business community must be in regular dialogue with all interested in the work of the court, including, of course, regulators, central banks, the executive government and the legislature.”

Technology also plays a key role in courts’ responsiveness to the needs of business, and the development of an online court/tribunal was progressing in England and Wales, the chief justice disclosed. “In the Prisons and Courts Bill presented to the UK Parliament at the end of February 2017 to give effect to this and other reforms, provision is made for a rule committee to support the online court/tribunal with a common set of rules/practice directions,” he said.

In addition, the London Commercial Court and a few other courts have embraced the traditional digitalising of court processes and records. Beginning in those courts next month (April 2017), “all claims, applications and documents will have to be filed online -- paper processes will be no more,” the lord chief justice said. It is similarly anticipated that “judges will lead the way” in paper-free trials, as is happening in the Crown Court of England and Wales.

In relation to often time-consuming and expensive disclosure procedures, Thomas referenced innovations such as utilising automated search mechanisms rather than cadres of junior lawyers or paralegals. This new automated approach is being combined with ongoing efforts to devise more flexible approaches to disclosure, he said.

In other areas of more business friendly procedural flexibility, Thomas noted London Commercial Court’s approach of adapting processes to fit needs of cases. Courts have also introduced more business-oriented shorter trial procedures that ensure that a single judge is responsible for the management of a case from start to finish.

Other strategies enabling courts to adapt to the needs of business, Lord Thomas said, include ensuring the right fit of expertise of judges to the requirements of disputes, and the “development of the law to meet the changes in the way that business is conducted.” This approach involves pre-emptively seeking resolution to issues in cases where there is no applicable precedent, even before a legal problem arises.

“No use has yet been made of this, but at a meeting of the Financial List users committee, all agreed that it was a valuable procedure,” Thomas said.

Overall, said Thomas, “There can be no doubt that what a commercial court needs are judges of the highest calibre who understand the needs of business.” In achieving these understandings, Thomas mentioned “high quality judicial education and seminars through which the business community brings the judiciary up to date.”

One problem relating to the calibre of the judiciary that Thomas highlighted was the “relative decline in judicial remuneration,” disclosing that this concern is currently being addressed in the UK.

Other support needs of judges include the provision of modern IT amenities and the availability of legal assistants and of advocates of the highest calibre, Thomas said, adding: “The promotion of the highest standards in the legal profession that practises before the court is a pre-requisite to meeting the needs of business.”

Thomas concluded by noting the importance of the proper functioning of the appeal courts, enabling speedy hearings following equally swift first instance proceedings. Where there may be unavoidable delays, Thomas said, consideration may usefully be given to a dedicated commercial and financial list in the appeal courts.

As a final reflection, Thomas spoke to the matter of enforcement. “Effective enforcement is something that we still need to work on,” he said, adding that the development of an effective, widely respected enforcement mechanism for commercial disputes was long overdue.

Thomas disclosed that such an enforcement mechanism, which refers to execution of judgments made in one jurisdiction in jurisdictions abroad, was due to form part of discussions in a forthcoming forum of international commercial courts in London. The aim of the forum will be to standardise internationally mechanisms by which judgments for plaintiffs who win cases in Cayman, for instance, can be enforced against defendants’ assets in another jurisdiction.
 
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