Dialogue: Law lords only for those who can pay

The first of three columns by TED THOMAS* on controversy relating to the abolition of the right of appeal to the Privy Council.

In this column, I examine the so-called "business" opposition to the abolition of the right of appeal to the Privy Council.

Reporters tend to treat the Business Roundtable as the voice of commerce. I reject any notion that the Roundtable represents the considered voice of the commercial community.

Almost every working day for 32 years I rubbed shoulders with this country's leading business executives. I found them highly intelligent.

Insisting on being fully informed, they would then approach any question pragmatically without a trace of ideology. I do not believe most senior executives, fully informed, would subscribe to the Roundtable's stated position.

In an address in 1997, the Senior Law Lord in England, Lord Bingham, referred to the approach favoured in the first half of the last century: the belief that the law is there for judges to simply declare.

Confirming that such a view had by and large melted away, he said it retained support among some "lay" bodies. His example? The New Zealand Business Roundtable's paper in 1995 opposing the abolition of appeals to the Privy Council.

What happens in practice? The right of appeal to the Privy Council is exercised in less than 10 cases each year. That is about 2 to 3 per cent of the appeals resolved by the Court of Appeal each year.

Who then benefits? By and large, it is the large corporations or wealthier individuals who can afford to appeal to their lordships in London. For small businesses and ordinary individuals there is, in effect, no right of appeal.

Supporters of the right of appeal claim the cost of taking an appeal to the Privy Council is exaggerated.

Don't believe it. Legal costs and expenses can range from next to nothing (a kind lawyer) to $200,000 or more. And, contrary to the practice in this country, the unsuccessful party will almost certainly be required to pay the other side's costs.

Further, the delay involved in an appeal to the Privy Council (often more than a year) is likely to have a severe commercial cost.

Then there is the converse effect. Not only do small businesses and ordinary citizens lack an effective right of appeal, persisting with our link to the Privy Council deprives them of a structure within New Zealand that would give them a second appeal. So most New Zealanders lose out both ways.

Even when small businesses or ordinary individuals succeed in our Court of Appeal they may be deprived of the fruits of their victory, at least in part.

Many more appeals or applications to appeal to the Privy Council are lodged than are heard.

Big companies or wealthy individuals who fail in the Court of Appeal can lodge an appeal to the Privy Council in order to negotiate a more favourable outcome.

Faced with heavy costs, particularly if they lose, all but the most affluent of parties must consider a compromise.

The argument that the Privy Council possesses a commercial expertise unique to that body is not one which finds favour with all the senior barristers who go there. It ignores a number of points.

Of the 12 Law Lords in the House of Lords, two are appointed from Scotland and one from Ireland. The rest come from the English Bar, where they often have been highly specialised in a narrow field of the law.

Even when practising at the commercial Bar, they are likely to have been engaged in a limited area such as admiralty or insurance law.

And the Privy Council is not just the House of Lords by another name. Often the Privy Council sits with retired Law Lords or retired judges of the English Court of Appeal. At times we seem to get the second eleven.

Even if the Privy Council possessed all the attributes that the Business Roundtable (and some accountants) ascribe to it, there is no logic in the argument that the right of appeal should be retained when those purported advantages are effectively available to no more than 2 to 3 per cent of litigants in the Court of Appeal.

Frequently, (and ironically, having regard to Lord Bingham's reaction to the Roundtable's lay perception) a sensible legal response to a commercial dispute is buried in the formal legalism that continues to dog English law.

I will give an example of that in my second column.

It is this overly legalistic approach that I believe is the key to the Roundtable's lobbying. It is a hands-off approach that favours the economically strong and powerful. Irrespective of the rights or wrongs of the matter, it is thought market forces rather than the law should be left to resolve disputes.

The courts are seen to be guilty of interference when they find that a contract is, say, unconscionable or has been obtained under duress.

Of course, without the law those with the biggest economic muscle prevail. The protection the law confers on the many who are bested by the strong and powerful becomes illusory.

This hankering after the more legalistic approach which lingers in England is backed by a perception of globalisation in which nationhood is an irrelevant sentiment.

Without a doubt, the world is getting smaller and transnational cooperation in the law, particularly commercial law, is imperative.

But the objective of a more uniform universal commercial law will not be achieved by clinging to the Privy Council's coat-tails.

* Ted Thomas, QC, is a recently retired Judge of the Court of Appeal.