Frustrated public gives up on courts

New Zealanders are suing each other less and less as rising costs and court delays block access to justice for all but the most determined.

District court figures show the number of new civil defended cases launched each year has plummeted from nearly 3500 in 1998/99 to just 1701 in the past year.

Lawyers are now routinely telling people with claims of less than $50,000 not to bother as their case will cost too much, and take too long. The result, say many top lawyers, is that civil justice is now beyond the means of ordinary people.

The figures also showed that it was taking, on average, 8.9 months to dispose of a civil case once it arrived at court, compared to 7.1 months back in 2000/01, although this was an improvement on the 10.7 months it took in 2004/05.

Jim Farmer QC, president of the New Zealand Bar Association, told a February conference of civil litigators: "No one could sensibly argue that the cost of civil litigation today, at least in High Court cases, is reasonable."

He blames overly complex and prescriptive court rules, grinding "discovery" practices, a proliferation of paperwork and written submissions, judges' failure to confine litigators to the core of cases, the shift to lawyers billing by the hour, and a culture of litigators and judges paying little heed to achieving justice for a fair price.

Farmer is not alone.

English High Court judge Sir Gavin Lightman QC summed up his speech with these words: "The adversarial system is past its use-by date unless prompt effective action is taken to make justice readily accessible to all."

If it was not, and there was no sign politicians were taking the issue seriously, a legal revolution may be necessary, ditching the costly adversarial civil system in favour of a cheaper inquisitorial one.

"The political will has not as yet been forthcoming," he said. "Sad to say, those with no voice in the courts have no voice in the legislature."

Kiwi judges also recognise the problem. Writing in the Otago Law Review, Justice John Hansen said a "sandwich class" had emerged and made up the bulk of society, who were excluded from taking civil action, and he warned: "If we deny access to our courts to a large proportion of New Zealanders, public confidence in the courts will erode and moral sanction will disappear."

That, official figures show, has already happened. A Ministry of Justice survey last year revealed that 70% of people agreed most people couldn't afford to take cases to court.

It was just the latest in a series of official reports and findings to draw similar conclusions.

The story of charitable trust foundation trustee Grant Nelson shows the trouble even the relatively wealthy have.

Nelson, a successful businessman, is trustee of the Gama Foundation, which in 2001 found one of the commercial buildings it owned had been badly damaged by an agricultural business that tenanted it. Under the lease, Nelson said, the tenant had a clear liability to pay, but it took five years to win compensation for 85% of the damage done.

All the financial incentives for lawyers were to lengthen disputes, Nelson said, when what was needed was financial disincentives for them to do so.

"Our impression was that the legal system did nothing to discourage dishonesty or distortion on the part of lawyers and witnesses," Nelson said. "In fact, dishonesty seemed to be encouraged in order to create more uncertainty which would then make it easier for the creator of a dispute to be rewarded."

Nelson's experience has led the Gama Foundation to endow a University of Otago Legal Issues Centre to study ways of making the courts function more equitably.

Opinions differ as to what those solutions might be.

Palmer would raise the jurisdiction of the district courts on civil matters from $200,000 to $500,000, which would make some of the bigger cases cheaper, and would also like to see a simplification blitz on complex court rules.

Bill Bevan, managing solicitor at the Whitireia Community Law Centre, says raising the $7500 limit at the Disputes Tribunal (a rough and ready people's court from which lawyers are banned) to $50,000 would provide more affordable access to justice. The tribunal heard 23,402 disputes in 2006/07. The dean of Otago University's Law School, Professor Mark Henaghan, warned the Disputes

Tribunals may be cheap and quick, but referees' decisions were based on principles of fairness, not strict interpretation of the law. That led to referees making compromise decisions. "Compromise is not giving people justice," he said. "The people who can't afford lawyers, don't get covered by the rule of law."

Courts Minister Rick Barker said an ongoing review of the tribunal system could mean such a raise was on the cards, but he did not believe there was a crisis in civil litigation.

He said much of the decline in civil cases at the district court was to do with the rise in arbitration, although the economic boom-times also meant people with claims preferred to channel their time and money into more profitable avenues than litigation.

Barker said the district court rules were being reviewed to bring costs down, and said there was ongoing investment in court technology, though it is widely considered to be outdated compared to those in comparable countries.

Chapman Tripp lawyer Stephen Franks, a former Act MP, believes the district courts' falling civil caseload, and that of the High Court, is a national scandal and will ultimately end up eroding the rule of law.

And while Franks is critical of the government's record, he says lawyers, judges and law schools carry much of the blame for a legal culture that is failing to deliver justice at a fair price.

When he was in law school, judgements in commercial cases tended to be some 10 pages long, Franks said. Now 100-200 pages was the norm.

Franks also said judges were routinely failing to rein-in the excesses of litigators, who seem addicted to over-litigating even the simplest cases, and worse, judges have moved away from delivering clear judgements on the law, which was creating uncertainty.

Henaghan said there had been another big cultural shift. "Law has become more of a business than it was. Longer cases bring in bigger fees. There's got to be a financial disincentive for cases to just keep ticking along."

 

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