Rack and ruin – the 2016 judicial survey

Funding cuts are putting the judiciary’s status as a world leader under pressure. Canvassing the profession, we find deep concern over prospects for the English courts

Who wants to be a High Court judge? Fewer than ever it seems. This, unsurprisingly, is a major concern for the UK’s top litigators.

Over the summer, Legal Business canvassed almost 200 of the country’s leading litigation partners, barristers and clerks to find out their views on the judiciary through a mix of online surveys and interviews. While feedback on the quality of the judges was positive, respondents were far less effusive about the judiciary’s prospects in general. The biggest concern is plain: the best practitioners are no longer typically going to the bench.

‘Our judiciary is seen as the gold standard globally,’ says Lawson Caisley, head of Allen & Overy’s corporate and commercial litigation group in London. ‘It’s high quality, incorruptible and well respected. [But] it is becoming increasingly difficult to persuade some of the elite potential candidates to apply to become judges than used to be the case.’

‘Judges’ pay was not an issue for hundreds of years. The moment you tinker with the system you have a problem.’
John Reynolds, White & Case

 

 

Of those surveyed, 23% believe this has become a ‘huge problem’ now, while a further 62% believe it is becoming an issue.

‘Looking at the High Court, we know it has become increasingly difficult to find people of good quality at the top level in recent years,’ concedes Nigel Reeder, chief executive of the Judicial Appointments Commission (JAC), the public body established in 2006 to find suitable candidates for judicial posts.

The JAC’s statistics trace a worrying decline in applicants. In its first selection exercise for High Court judges, in 2006/07, the JAC had 144 applicants. In a similar selection exercise carried out in 2013/14, the number of applicants halved (see chart, ‘Annual applicants and recommendations for High Court judge positions’). The latest selection exercise was carried out in 2015, where 15 High Court judge vacancies were advertised. The statistics for this round of appointments won’t be published until June 2017 but Legal Business has learned that the number of applicants fell again, and of those that did apply, there were not enough quality candidates to fill all 15 posts.

JUDICIAL SURVEY 2016: ON COST BUDGETING
‘It has created a new tier of disputes that seemingly the judges don’t want to determine, which do not involve public money and which restrict access to justice.’

‘What we never do is reduce the quality,’ says Reeder. ‘85% of our recommendations have been either outstanding or strong. We’d rather not fill posts, and that’s what we do. We leave them blank if there is any chance of there being a question on quality.’

The majority of respondents feel that since its inception the JAC has helped maintain the quality of senior judges, with only 29% of survey respondents saying they have become worse in the past ten years. The problem, however, is not quality, it is quantity. Since the High Court bench operates a one-in-one-out policy, and there are 12 judges facing mandatory retirement by the end of 2018 (plus the likelihood of others being elevated to the Court of Appeal), any recruitment shortfall puts pressure on an already overworked system.

Money matters

The current predicament is a far cry from the life of a senior jurist as recently as the 1990s, when donning a judge’s wig was considered the pinnacle of a successful legal career.

‘We’ve always taken it for granted that it’s a natural career path,’ says Toby Landau QC of Essex Court Chambers. ‘People will get to the top of their professions and there will be a moment of public duty where they take a pay cut and go to the bench. We’ve benefited from that all these years and now that’s not happening in the same way. That is going to hurt in the future.’

There are numerous reasons behind the drop in applicants. While judicial pay has always been low compared to what a successful QC would earn, the current High Court salary of £179,768 a year has remained static while the average earnings of a top silk have rocketed. Alternative career avenues, including becoming an arbitrator, have also opened up for successful silks who might otherwise have considered the bench. According to the International Chamber of Commerce’s (ICC) cost calculator, an average arbitrator’s fees for a £100m dispute are £175,000, rising to £285,000 for the most expensive arbitrators. Our respondents felt the money on offer was now far too low. Asked for a fair annual salary to attract and retain high-quality candidates to the High Court, nearly eight out of ten said salaries should be over £200,000, with nearly half arguing for upwards of £250,000.

JUDICIAL SURVEY 2016: ON £10,000 COURT FEES
‘It simply means that litigation for under £3m is really difficult to offer people as a viable commercial remedy.’

The issue of judicial pay was also compounded by the decision in 2015 to end the judicial final salary pension scheme for existing and future judges born after 1 April 1957. High Court judges affected by the New Judicial Pension Scheme will see a sharp reduction in their pension package, which will now average around £80,000 per year if they have served over 20 years.

‘Judges’ pay was not an issue for hundreds of years,’ says John Reynolds, London head of litigation at White & Case. ‘People have aspired to join the bench and have progressed their careers accordingly, but now find that the goalposts have been moved. The moment you tinker with the system you have a problem. You risk making the career path less attractive to the high-quality individuals who will maintain the global reputation which the judiciary enjoys.’

The problem is not just with new recruits, but also with existing judges. This is reflected in the findings made in the 2014 UK Judicial Attitude Survey that was carried out by the University College London’s Judicial Institute. Notably, 58% of justices of appeal and 39% of High Court judges surveyed said they would consider leaving their jobs in the next five years, with pay and pensions being the biggest contributing factors. Furthermore, 86% of all judges felt that working conditions were ‘worse now than they were five years ago’. The early retirement of several high-profile judges, including Sir Bernard Eder after just four years on the bench, have served to deepen the problem.

Edward Sparrow, a disputes partner at Ashurst, referred to the Judicial Attitude Survey findings when he spoke at Legal Business‘s Commercial Litigation Summit in May. He said: ‘Only 2% of judges feel that they are valued by the government. They are treated and managed as human assets and, in the drive for efficiency, they are probably sweated like assets.’

The Ministry of Justice (MoJ) has been hamstrung by the budget cuts since 2010. The last November budget revealed further cuts of £500m to the MoJ’s funds, which at £6bn by 2019/20 will have been reduced by 33% from £9bn in 2010/11. Meanwhile, the JAC’s funding fell from £8.1m in 2008/09 to £4.4m in 2015/16.

Of those surveyed, 35% agreed that the courts are ‘woefully underfunded’, with a further 54% conceding that ‘funding is a concern’. At the recruitment level, the cuts have had a direct impact on more junior judicial positions such as recorder, a role that typically feeds into more senior salaried posts at the High Court and circuit courts.

Even those serving on the bench concede that the cuts are having an impact. ‘The infrastructure has been hit,’ says David Foxton QC of Essex Court Chambers, who also sits as a deputy High Court judge. ‘You see it in the number of personnel available, the number of clerks available to man courts, having to print on double-sided paper. Those are small irritants. I won’t pretend they’re not.’

JUDICIAL SURVEY 2016: ON DISCLOSURE
‘Disclosure in the digital age is hugely burdensome. There should be more judicial direction and judges should grasp the nettle.’

Cuts to administrative staff, the rise in litigants-in-person and the greater amount of disclosure that modern complex disputes now entail, mean that the burden on judges has much increased. One of the more problematic areas is in the management of costs, arising from the Jackson reforms of 2013, which are a particular bugbear for many.

‘We still don’t have the right balance in cost control,’ says Chris Bushell, a disputes partner at Herbert Smith Freehills. ‘It’s right to produce and exchange estimates, and to keep a regular eye on costs throughout the case, but I’m not sure costs budgeting is necessarily the way to go. Particularly in high-value, complex multi-party litigation. In those sorts of cases it can be very difficult accurately to predict what the costs will be, particularly where you are dependent on the behaviour of so many other parties. It can also be an enormously time-consuming and expensive process in itself.’

Many feel that the fact judges have to manage cost budgeting is a poor use of their time and experience. This might go some way to explaining that while 90% of respondents feel the overall quality of our senior judges is either good or excellent, on case management, the feedback is mixed. Twenty three percent of those surveyed believe judges are poor at maintaining efficient and effective case management.

Our research found widely-ranging views on the merits of various English courts. Asked which is the most impressive, the Commercial Court was the clear favourite, cited by over half of respondents (57%), with the Chancery Division of the High Court the next popular, cited by 23%. The third most praised was the Technology and Construction Court, with 6% of the vote.

Conversely, the Queen’s Bench Division – despite hosting the popular Commercial Court – came in for a panning, cited by 43% of respondents as the least impressive English court for complex civil matters (and going without a single vote for excellence). The Chancery Division was cited negatively by 19%, while the Court of Appeal (14%) and the family courts (10%) were also viewed negatively (neither of the latter two gained any positive votes).

Global appeal

The fallout from this increased workload is felt most in the Court of Appeal (CoA) Civil Division, which attracted significant criticism. Having experienced a 50% increase in applications for permission to appeal in the past five years, the CoA is widely seen to be struggling. As stated in the Lord Chief Justice’s 2015 report, ‘judicial resources have not changed… and increasing administrative and leadership demands have been placed on the senior judges of the Court of Appeal’. This has led to long delays, with multiple cases being pushed back at the last minute.

‘Our judiciary is the gold standard globally, but it is increasingly difficult to persuade some of the elite potential candidates to apply.’
Lawson Caisley, Allen & Overy

‘It’s an anomaly that it can take 18 months to get an appeal,’ says the head of litigation at one international firm. ‘I’m having to tell clients that cases aren’t going to be heard until the middle of 2018, which is embarrassing. People obviously don’t place speed above outcomes. If it’s four months, that’s not material, but if you’re talking about a year that’s an issue.’

The fear is continued delays could see litigants seeking alternative jurisdictions to London. While half (52%) of respondents feel that London courts are holding their position on a global level, 29% say there is room for improvement. This is down to increased competition from international arbitration, as well as disputes centres such as Singapore or Dubai. There is also a concern that the UK’s recent Brexit vote will have a material impact, with 53% believing that it will lose the London courts work.

‘Brexit will certainly provide challenges, but we don’t know what the answers are, or even what the questions are,’ says Deirdre Walker, head of dispute resolution and litigation for Europe, Middle East and Asia at Norton Rose Fulbright. ‘In the case of MiFID (Markets in Financial Instruments Directive), it prescribes that dispute resolution outside of the EU won’t be effective. There is going to be a huge impact, and where it comes out is going to depend on what arrangements the government negotiates. There is certainly a lot at stake.’

However, litigators can take comfort that judiciary is innovating in areas where it does still have influence. The 2015 launch of the Financial List, a specialist court for handling complex financial disputes, has been well received, as have other initiatives such as the Shorter and Flexible Trial Procedures Pilot Scheme, which aims to get judgment within one year for less complex cases. Some of these have built upon the success of other specialised and more streamlined courts such as the Intellectual Property Enterprise Court, which hears cases up to a value of £500,000.

The Civil Procedure Rule Committee has also proposed changes, such as higher thresholds for granting permission to appeal, which should help ease the backlog at the CoA. The publication, on 27 July, of Lord Justice Briggs’ Civil Courts Structure Review also provides far-reaching responses to some of the problems raised in our survey, such as the introduction of case officers: ‘a senior body of court lawyers and other officials who can assist with certain functions currently carried out by judges, such as paperwork and uncontentious matters’.

JUDICIAL SURVEY 2016: ON FUNDING CUTS
‘Admin staff have been pared back dramatically, so you’ve got low-quality staff. You used to have fantastic people. It’s a disgrace the government doesn’t support the legal system.’

Protecting the future

While these are all positive developments that should help give London a continued edge as a disputes centre, they largely come in spite of, rather than because of, any efforts made by the government. Without the funding to back it up, there is only so far that the judiciary’s intellectual capital can be stretched.

Britain’s new chancellor, Philip Hammond, has signalled that he might ease the austerity that has curtailed government spending over the past six years. If this proves true, then an increased amount of investment into the judiciary should be a priority. UK legal services, the popularity of English law, and the high esteem in which the judiciary is held, combine to form a major asset for the UK. Together they go a long way to underpin the nation’s commercial success, not to mention its tax revenues. Our findings show that this leading status can no longer be taken for granted, and the strain of underfunding is showing. The challenge now is getting that message across.

‘One of the difficulties is a PR issue,’ says Landau. ‘For a profession that is supposedly specialising in advocacy, we’re very poor advocates for ourselves, and bad at explaining to the UK population what we do, and why it’s important. The government has to be persuaded on what’s being lost.’

sarah.downey@legalease.co.uk

tom.moore@legalease.co.uk

Further reading:

Judging the judges

Return to the Disputes Yearbook 2016 main menu.