The District Court – why bother?

A thought-provoking polemic from Josh McBride at Dryden Chambers regarding the overhaul of the District Court Rules in 2009 and what could easily be described as the resulting “settle-at-all-costs” mentality:

A theme in recent postings has been whether our civil justice system has strayed seriously off target with its stated preference for early settlements.

I encountered a further example of this cultural shift in a recent review of the new District Court Rules. These rules underwent a dramatic overhaul in 2009, and now have a significant emphasis on early resolution of disputes.  Have a read of this, from Doherty, Ingram, Joyce QC, Judd and Russ, “The New District Court Process – a radical change”, NZLS seminar 2009:

“The new Rules take settlement as the basic objective, the process being designed to enhance the prospects of settlement at an early stage. The full scale witness action trial, with its attendant expense and delay, has been procedurally relegated to its economically justifiable place, namely the very last resort.”

I beg your pardon?  Settlement is now the “basic objective”?  A trial is only a last resort?  Forget about expecting the Court to uphold your legal rights and obligations.  Apparently what the Court really wants is for you and your claim to just go away.  Much cheaper and easier for everyone, right?

Josh quite rightly goes on to give illustrations of how the rules nudge parties to settle, rather than necessarily obtain what might be the true merits of the case, by methods such as heavily front loading filing fees and requiring mandatory settlement conferences.  Where in this process is an actual decision on the merits of the parties submissions?

I am left with this question.  Why would any party to a commercial dispute prefer the District Court to an arbitration? In an arbitration, the parties can agree on the decision-maker, or at least the process for appointing one, and agree on the process for getting to a determination as quickly and efficiently as possible.  A defendant who is dragging its heels will swiftly be revealed as such, with all the ramifications that entails once the matter gets to a substantive hearing (because you have the same arbitrator at the beginning and at the end, you offend them at your peril).  And if you want to negotiate or mediate mid-arbitration?  Well, of course you can.My view:  any competent solicitor drafting a commercial contract should include an arbitration clause.  Particularly if a dispute over its terms if likely to end up in the District Court.  Otherwise you leave your client facing a series of hoops in that Court designed to prevent it from getting to a substantive hearing, and instead forcing it to an “easier for everyone” compromise.

Quite how that amounts to access to justice escapes me.

Well said.  It escapes many why the solution to litigation being inefficient is not to make litigation cheaper and more efficient, but instead to avoid it altogether as if the inefficiencies are simply too hard to solve.  There have certainly been enough attempts at courts reform in the past, seemingly without much success, so perhaps it simply is too hard to solve.  The courts still attract plenty of criticism in terms of organisation and staff.

All said, the rise of commercial arbitration continues and not by accident; not so much as alternative to the courts, but a direct replacement.  Private enterprise can sometimes do things better.


About Ivan McIntosh

I am a partner of Carter Atmore Law...residing in City Road just off the busy thoroughfare of Symonds Street, Auckland, New Zealand....where we are specialist business & property development lawyers, working for both local and international clients. Proud husband to Joanna, and dad to two sons. Passionate rugby supporter. Email: Ph: 64 9 921 5026
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