Essays in Memory of Professor Jill Poole

Coherence, Modernisation and Integration in Contract, Commercial and Corporate Laws

Robert Merkin, James Devenney, Rob Merkin, James Devenney

• Publisher: Informa Law from Routledge
• Year: 2018
• ISBN:
  9781351347631
• Edition: 1
• Topic: Diritto
• Subtopic: Teoria e pratica del diritto

This book is a collection of original, thought-provoking essays on critical issues in contract, commercial and corporate law. It is dedicated to the memory of the late Professor Jill Poole, who inspired so many and made such important contributions to these fields of law. The essays are written by leading practitioners and academics in the field, building on Jill's work. As such this collection will be of interest and importance to professionals, academics and students in these fields of law.

The Professor Jill Poole Educational Fund has been established in memory of Jill. It will be used to support undergraduate students in obtaining 'excellence scholarships' at Aston Law School and to reward 'excellence' at the annual law graduation ceremony. All contributions are welcome, and the royalties from this collection of essays have been donated to it.

Chapter 1

Keeping commercial law up to date

Lord Thomas

1.1 Introduction

It was both a pleasure and an honour to give the first in a series of lectures in memory of Jill Poole.¹ I knew her, what seems now a very long time ago, as a young law lecturer at Cardiff University when I went back to Wales to be a Presiding Judge in 1998. I followed her career through UWE, and then finally to Aston University, with great interest. She was very dynamic. She did a great deal for Cardiff and a huge amount for UWE; it is also a pleasure to know what she did at Aston University. So it is, I think, fitting, that I should have this opportunity and privilege of reflecting on a subject in which she was so interested, which was contract law, but seen through a commercial lens. I thought I would take as a topic not some interesting aspect of commercial law (such as bills of lading as I might lose you very, very quickly), but look at a much broader canvas – keeping commercial law up to date.

Although I am always reluctant about writing of too many duties that judges carry, one of the duties judges have, which is central to their role, is keeping the law up to date.

1.2 The dynamic nature of the common law

Our system of justice has been hugely privileged to have the common law which has always been a dynamic system of law, indeed one of the most dynamic systems in the world. As Lord (Robert) Goff of Chieveley said in Kleinwort Benson:

It is universally recognised that judicial development of the common law is inevitable. If it had never taken place, the common law would be the same now as it was in the reign of King Henry II. It is because of it, the common law is a living system of law, reacting to new events and new ideas, and so capable of providing the citizens of this country with a system of practical justice relevant to the times in which they live.²

The need for judges, as Lord Nicholls noted in National Westminster v Spectrum Plus in 2005,³ to discharge their ‘responsibility of keeping the law abreast of current social conditions and expectations’ is one that depends on the times. Periods of social and economic stability call for less and more limited development. Periods of significant social and economic change call for more and wider development. This latter point is, however, always subject to the cautious approach which the courts have always rightly demonstrated where the development of the common law was and is concerned.⁴ It is, of course, also subject to Parliament’s sovereign right to enact legislation amending, revising or overriding common law developments.

It is, I think, important to recall that, although in many aspects of law, judge-made law has been of critical importance, its modern importance worldwide is attributed to commercial law. I use the words ‘commercial law’ not necessarily in the narrow sense of the law administered in the Commercial Court but the law that relates to business and to property, a concept we are anxious to develop in seeing commercial law through this wider spectrum. I will concentrate, however, on that aspect of commercial law which deals with business and shipping, banking, insurance, international finance, and the like. I have chosen this partly because Jill was very interested in how the law developed and partly because we are living in a time of very significant development.

We need also, in recalling the immense debt the English common law owes to Lord Mansfield, to appreciate the fundamental role the courts have played in developing commercial law. As one of his contemporaries put it shortly after his death, when Lord Mansfield became Lord Chief Justice the law in respect of mercantile cases – and the same point applies more widely to other commercial areas – there were no established principles. By the time he left office he had refashioned the law so that ‘principles (were) stated, reasoned upon, enlarged, and explained’.⁵ And the law’s development has not stopped since then.

At the present time, the court’s ability to develop commercial law is of particular importance. First, we are living through a time of significant development in commercial and financial practice through the technological revolution. New areas are developing, and doing so rapidly. Bitcoins. Blockchains. Big Data. Financial markets’ complexity and the complexity of the law underpinning them continues to grow apace. There are many other examples. The law needs to keep pace with such developments.

Second, law is also going through a period of significant evolution. France, for instance, has recently revised its Civil Code relating to contractual obligations. This is the first such major revision since the time of Napoleon over 200 years ago. The revision is accompanied by an excellent English translation. Why was that done? It was done because it was feared that unless the law of France was brought up to date through a fundamental revision to the Civil Code, the law would fall behind and French lawyers and the French influence across the world (which is fairly profound in a number of countries) would become out of date and in time fall into disuse in international transactions. Another example is Germany. About eight years ago the German government first produced a booklet called Made in Germany. The current version starts,⁶

‘Made in Germany’ is not just a quality seal reserved for German cars or machinery, it is equally applicable to German law. Our laws protect private property and civil liberties, they guarantee harmony and economic success. In the age of economic globalism, law is an important competitive factor. German law forms part of the system of codified law that has evolved throughout continental Europe. It is predictable, affordable.

So there is a real consciousness across the world for developing law and legal systems which can properly compete with those of other states.

In other common law jurisdictions, Singapore has been developing its contract law so that it provides the certainty that some argue English contract has to a degree lost. Again, we can see the intention is to establish a robust competitor to English law. If our laws are to retain their importance in the worldwide market place we cannot allow them to fall behind developments elsewhere. We cannot therefore, at the present, ignore the existence of an increasingly competitive market place between systems of substantive law and methods and places for dispute resolution.

The question for today then is how do we ensure that commercial law is kept; that it moves with the times and remains as attractive a source of law to businesses both here and abroad? In considering this I want to focus on:

• (1) Judicial expertise
• (2) Assessors
• (3) Procedural innovation

I know the last, to an English law school, will almost immediately find people fleeing for the exit. However, procedure is what you ought to be taught, as I was taught when I was at Chicago, as a first-year course, because it is central to the way in which any legal system operates and develops.

1.3 Judicial expertise

1.3.1 The need for expertise

Judicial expertise is of central importance to the vitality of a commercial court. The risk that a claim may be managed or tried by a judge who is not familiar with the practice area was one of the principal reasons that lay behind the creation of the Commercial Court in 1895. Scrutton LJ gave an account of a trial conducted in 1891 by Lawrance J which had such a baleful effect on the reputation of the English court’s ability to deal with commercial cases that it lead to the establishment of the Commercial Court.⁷ He gave the account in a lecture he delivered to students at Cambridge in 1920.⁸ I am not going to advise you to read the lecture because, although he was probably one of the most successful of all commercial barristers and outstanding as a commercial judge, a significant part the lecture is devoted to explaining how few lectures he went to. I am sure the Dean would not appreciate you reading this as the necessary condition for a successful practice.

Lawrance J was not the best advert for the English courts at the time; he had practised in an agricultural county,⁹ and was appointed by the Earl of Halsbury who had a penchant for appointing those who had done service to his party, as Lawrance J had done as a Tory MP for 10 years.¹⁰ His appointment was, unusually, greeted with public ‘hoots of derision’.¹¹ As Mackinnon LJ once put it, he ‘was a stupid man, a very ill-equipped lawyer, and a bad judge’.¹² He had, in the words of The Law Times: ‘no reputation as a lawyer, and had been rarely seen of recent years in the Royal Courts of Justice.’¹³ Though he had been told that he would be all right as a judge, if he kept his ears open and his mouth shut, things did not improve when he was on the bench. It was his handling of the trial in the case of Rose v Bank of Australasia in 1891¹⁴ that precipitated calls for the creation of a specialist court in which commercial parties could properly place their confidence in the quality of the judge – as well as the confidence that justice would be delivered quickly, and in a cost-effective manner. Rose involved a ship that was sailing up the English Channel in fog with a large cargo of cotton. Through the fog, after a couple of days, the master saw a bright light and he thought it was Beachy Head. He ordered the ship, ‘Port, helm, hard’. Unfortunately, he had made a mistake. The light was that of the French coast and the ship ended up hard on the French coast. The cargo was retrieved and a dispute arose over a general average adjustment, a method of distributing the loss that occurs from a maritime adventure that goes back to pre-Roman times to the Lex Rhodia of about the 5th century BC. It was a subject on which Lawrance J knew next to nothing. Nor was he interested in it. He heard the case over 22 days with very distinguished counsel.¹⁵ Then, as Mackinnon LJ has it, ‘he forgot all about the case’. The parties waited and waited for judgment. None came. They waited again. They complained. Finally, prompted, he gave judgment, in favour of the plaintiff; a judgment that was lacking in detailed reasons.¹⁶ At which point counsel for the plaintiff stood up and pointed out that the judge had simply failed to deal in his judgment with a key issue.

Not having the least idea what the point was, [Lawrance J] pulled himself together and said ‘Oh, yes; I meant to say that having considered that I think the adjusters took the right view, and in that respect also I think the claim as made out by them ought to succeed.¹⁷

Hardly a case of justice being done and being seen to be done. As an ironic coda, the plaintiffs appealed: the Court of Appeal reversed Lawrance J’s decision. On a further appeal by the defendant to the House of Lords, his judgment was reinstated.

I have retold that story as it is the most striking illustration of why judicial expertise, just like the court’s ability to deliver timely and cost-effective justice, is something that is essential. Today the quality of the judges of the Commercial Court and consequently the reputation of its decisions are both excellent. It is respected throughout the world. But it is not unrivalled. We cannot be complacent. There is and will no doubt continue to be intense competition from other commercial courts from across the world; an issue I considered recently in the Cayman Islands.¹⁸ We must ensure that the Commercial Court remains a centre for dispute resolution and ensure that it can maintain its ability to develop commercial law, as it and our courts in general have since the time of Lord Mansfield. How is that to be secured by maintaining judicial expertise?

1.3.2 The necessity of excellent appointments to the judiciary

First, we must continue to draw our judges from the leading practitioners of commercial law – from those who have an excellent education in the law, know the law, are skilled in its application, and who understand the experience of practice. Our aim must be to ensure that we are in a position to draw expert practitioners onto the Bench to ensure that judicial expertise is not diminished. Of course, at the moment, it is not easy to recruit judges for various reasons. You all may have read about this and despair of the way in which the state has decided to remunerate judges. It is a matter, I think, for serious concern that over the period where the commercial market for lawyers has moved in one direction, the judiciary has been left far behind; but this is not a subject I want to go into more than saying that. The simple fact is that our commercial law will never stay up to date without the recruitment of excellent practitioners to the Commercial and Business Courts. We cannot afford to retreat to the pre-Commercial Court days of the early 1890s, where judicial expertise was, to borrow a phrase, a matter more of luck than judgment in terms of j...