Gross defends arbitration against claim it damages common law

Arbitration: “Broadly right” balance with the courts

A Court of Appeal judge has rejected the argument – pressed by a former Lord Chief Justice – that the growth of arbitration to resolve commercial disputes has retarded the development of the common law.

Lord Justice Gross also complained that civil justice was too often seen as a “Cinderella” service that was not as important as criminal or family law.

Giving the London Common Law & Commercial Bar Association Annual Lecture – which went from the starting point of civil justice being a “public good” – Gross LJ pointed out that the system was more than the courts.

“They are one part of a wider whole, which also encompasses arbitration. The two are mutually supportive, enjoying a symbiotic relationship where the strength of one helps secure the strength of the other.

“I do not see the court and arbitration as in a competition involving a ‘zero-sum’ game, whereby the gain of one means a loss for the other. Arbitration’s strength is one facet of the framework of law that the civil courts help provide.”

In a speech in 2016, the then Lord Chief Justice, Lord Thomas, said the balance between the courts and arbitration needed to be altered.

He said there had been a big drop in the number of appeals from arbitral awards coming before the courts after a narrow test for the grant of permission to appeal was introduced in the 1996 Arbitration Act.

Lord Thomas continued: “In my view, therefore, we must address what has happened and restore an essential part of the way in which courts are able to continue the development of the law that underpins our trade, financial system and our prosperity.”

In a second speech later the same year, Lord Thomas stressed he was not attacking arbitration, but went on to highlight the need to put “into the public domain the decisions of leading ex-judges who are now sitting as arbitrators”.

Gross LJ did not name Lord Thomas, but said: “There has been some debate… as to whether the 1996 Act has reduced the (Commercial) court’s ability to ensure that the law can develop appropriately.

“To my mind, the balance it has struck through the test for appeals on points of law is broadly right.

“It is a test that properly respects party autonomy, while enabling appropriate disputes to come before the courts. Support where it is wanted and where it is needed. Otherwise, as in many other aspects of dispute resolution, party choice is respected, with an emphasis on finality, in accordance with the wishes of the parties.”

The judge added that the support arbitration provided for the courts went beyond furnishing material through which the common law and commercial law could develop.

“While arbitrations may mean that some disputes do not come before the courts, the practical experience derived from arguing those arbitrations and deciding them is not lost to the courts.

“It is experience that can and is brought to bear in arguments before the courts. What the court loses in terms of some precedent as disputes are determined by arbitration, it still gains albeit indirectly.

“And experience gained in arbitrations both in London and abroad increases the skills and attractiveness of our legal profession and our judiciary, thus increasing the international reputation of our courts and those who practise in them.”

More generally, Gross LJ described the provision of civil justice as a public good, securing the rule of law and not simply another public service.

“Unfortunately, it has not always been seen that way; too often, it has been treated as a Cinderella, ranked somewhat lower in the state’s priorities than the criminal or family justice systems, even though it was the means by which the other systems were to a significant degree funded.

“This acute problem, repeatedly observed by members of the senior judiciary over the past decade, rests on a failure to fully appreciate that the provision of an accessible and effective civil justice system is an integral part of the delivery of one of the state’s primary duties: the provision of an effective means through which law and justice can be upheld – a system which enables litigants to vindicate and enforce their legal rights.”

He argued that a straightforward test for any proposed civil justice reform was: “Does the reform improve our ability to deliver that public good? Does it improve the civil courts as a pillar of democracy?”

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