“There was a society of men among us, bred up from their youth in the art of proving, by words multiplied for the purpose, that white is black, and black is white, according as they are paid. To this society all the rest of the people are slaves. …
“It is likewise to be observed, that this society has a peculiar cant and jargon of their own, that no other mortal can understand, and wherein all their laws are written, which they take special care to multiply; whereby they have wholly confounded the very essence of truth …”
Jonathan Swift, Gulliver’s Travels, published 1726.
As lawyers, we operate within an ancient institution. We may have rid ourselves of some of the silly costumes, and computer search engines have replaced dusty libraries, but fundamentally it is the same institution that the Houyhnhnms explained to Gulliver 300 years ago. It still “enslaves” the general public, but it does so because it is “The System”. It is what we have to do the job.
Our structure for justice is designed around argument
But here is a question: Does it work?
You might say that the law can be divided into four parts: Justice, statutes, contracts and disputes. But essentially all of these elements owe their current form to one overriding principle – argument.
Our structure for justice is designed around argument; statutes are written the way they are because they will be argued about; the same for contracts; and disputes are to be determined by argument.
Is argument really the best method for determining the truth? It is a rhetorical question, because the answer is plainly no. Argument is simply the method that we have been using for so long, that we almost accept that there is no better alternative.
Argument is about winning, not finding the truth, or delivering justice. Litigators know this. Perhaps they do not always tell their colleagues, and certainly never their clients.
Most lawyers can point to examples from their own experience, where evidence or law has not been presented to the Court, or has been disregarded, and the absence of which, weighed upon the decision.
Where it is to our advantage we might say: “The other side made a mistake”; and where against us we might say: “That is the system.” But should we question the system that allows this to happen? Should we query whether a system that produces results that are plainly wrong, or sends innocent people to prison, or allows guilty people to escape punishment, is the right system?
I have said that statutes and contracts are written the way they are because they will be argued about. We have the overriding principle that the written word is our meat, and that the intent of the legislator or the contracting parties is to be ignored. Why?
All lawyers are aware of the compromises that need to be made because “the alternative is too expensive”
Historically the answer has been “certainty”. It is said that the words are transparent, but the mind opaque. Only where the words on their face cannot be understood do we look to intent. But otherwise the words provide for consistent application, regardless of whether that application is just, or even sensible.
But the truth lies in “the spirit of the legislation” or “The bargain reached”. This system is not only short in finding the truth, it bars us from access to it.
But there is an even more fundamental reason why the law fails the society it is intended to serve – cost. We all know that the cost of access to the law is far too high.
I am not talking about the poor having access to legal process, for even the cost of contractual protection may be too much for a small business, let alone the cost of a dispute whether or not such protection has been obtained. All lawyers are aware of the compromises that need to be made because “the alternative is too expensive”. We must advise or clients to sacrifice justice and fairness for expediency, and we do it every day.
Then there is the issue of delay, in particular with respect to access to the Courts. The authors of our own New Zealand Bill of Rights Act knew it. By the Magna Carta (1215) the state “will not deny or defer to any man either Justice or Right” (my emphasis) but the protection against delay has now gone.
But enough of this negativity. We have to face facts. The Law is the way we do things. Universities continue to turn out law graduates trained in the arts of “proving, by words multiplied for the purpose, that white is black, and black is white”.
They walk into professions where they are paid to exercise these skills, by clients who are bound by a system that can seize their assets or deny their freedom. Will it ever change?
Perhaps it might. Some change is afoot, driven by the growth of Consumer Alternative Dispute Resolution (CADR).
While mediation may have a role in some CADR, the primary tools of the CADR process are investigation and conciliation
Before discussing CADR, some other “alternative” dispute resolution methods should be distinguished:
- Single purpose tribunals. These are Courts. The rules of evidence may be relaxed, and there may be deference to notions of conciliation, but these are agencies of State with a justice system.
- Arbitration. This is a private court. The arbitrator may seek agreement to some different process but his or her task is to hear argument and proclaim a winner. That being said most arbitrators might feel that if both parties walk away feeling that they have won, that is the best outcome.
- Mediation. This is an attempt to obtain agreement out of argument, but argument is still the reason for entering.
While mediation may have a role in some CADR, the primary tools of the CADR process are investigation and conciliation. The objective is to resolve disputes by agreement, and where the facts stand in the way of reaching agreement, to determine the truth by research and investigation.
New Zealand can claim some small role in the early development of CADR. American papers on the development of CADR refer to the Waitangi Tribunal (and equivalent Canadian mechanisms) as being the example of how to handle a complaint by looking for the truth and helping to conciliate redress. But the US has not really extended the possibilities. Instead the European Union now has the clearest statement of CADR in Directive 2013/11/EU.
The first example of CADR in New Zealand was the establishment of the Banking Ombudsman in 1992. It was an industry-led scheme, with banks getting together to establish an independent board to hire a suitable ombudsman to design and build a dispute resolution programme.
The New Zealand Government recognised the value of CADR in passing the Financial Service Providers Registration and Dispute Resolution Act in 2008. More recently the Government Centre for Dispute Resolution has been established to promote further CADR.
Why is CADR seen as more effective that historical processes?
Perhaps it is best to look at some of the reasons from the separate viewpoints of “the Merchant” and “the Consumer”. First the Merchant (in most instances at present, a financial service provider}:
- Confidence in the system. The justification for CADR in financial services is that consumers must have confidence in the financial markets. Internal mechanisms for resolving disputes are essential for market confidence, and an independent extension of those mechanisms is desirable.
- Specialist expertise. Merchants appreciate that Courts may not be best equipped to deal with complex issues. CADR schemes often have experts or access to experts is areas where often the same issues arise again and again.
- Non-engagement. Large corporates often prefer not to engage with complainers, for obvious reasons. CADR allows corporates to communicate through an independent third party.
- Time. If a dispute can be resolved within days or weeks rather than months of years, the efficiencies are obvious.
- Cost. Not just keeping cost down, but keeping it to fixed levels is good business. Sadly, litigation requires an open chequebook.
- Customer satisfaction. If the resolution leaves the customer not unhappy, then that is good for business. Litigation makes enemies. Placing the matter in the hands of a third party can see the parties maintain a relationship.
- Confidentiality. If the result of the CADR process is agreement, then the parties may also agree that the payment or other remedy is to remain secret. There might be commercial advantage in this. If the result is a determination, then that may be made public, but not the name of the offending merchants. Some argue against this, but the reputational advantage in keeping a merchant’s name out of Court may be of value, and help to secure a fair outcome.
- Process improvement. Lessons can be learned from complaints, and useful business intelligence obtained. Some CADR schemes offer advice or training for member merchants who constantly encounter dissatisfaction. Overall, the improvement of service delivery is advantageous for all.
And from the consumer perspective:
- Access to justice. For many consumers, the first barrier to justice is the need to engage a lawyer with the cost that entails. CADR is designed to be consumer friendly. A lawyer is not required, although lawyers can (and in most cases should) engage the service on their clients’ behalf.
- Cost. CADR is free to consumers.
- Time. CADR is a solution many times faster that any other process.
- Ongoing relationship. Often the consumer will not want to alienate his or her service provider, in particular if there are associated risks. As said above – litigation makes enemies.
- Satisfaction. It may be anecdotal, but it is said that a consumer may tell 4 people about good service, but more that 12 about bad service. All merchants benefit from customer satisfaction, and that includes walking away from a complaint with a satisfactory outcome.
The Government Centre for Dispute Resolution has been looking at expanding CADR into property disputes, transport issues, online sales and other areas.
Beyond that there is scope for the expansion of the “inquisitorial approach” into other areas, replacing our traditional “adversarial approach.” In some countries such as Japan, this approach even applies very successfully, to criminal justice. In particular with the increasing role of science in determining guilt, fact finding by investigation is perhaps more relevant than testing the reliability of witnesses by public interrogation and argument.
The good news for the profession is that CADR generally employs lawyers, but lawyers who need to develop other skills. The skills of the modern lawyer may well be in the understanding and presentation of facts and principles, rather than in debate.
So, returning to my question, does the Law as we know it, really work? We should judge our system by alternatives, and the truth is that we rarely examine them. CADR barely existed 30 years ago, but it is now universally accepted as fair and effective.
The International Network of Financial Services Ombudsman Schemes (www.networkfso.org) has members from 40 countries as diverse as Armenia, Finland, Trinidad, Kazakhistan, Botswana and Saudi Arabia. All work as an alternative to their own countries’ conventional legal processes, and in all cases better those processes in terms of efficiency and satisfaction.
That organisation is for the financial services industry, but the scope for expanding inquisitorial justice into other areas, is real. We are all consumers of goods or services, and this is where effectiveness has been proven. But what about disputes between equals?
In our modern world many products or services are acquired through the internet trading sites, or from platforms relying on “the sharing economy” such as Airbnb and Uber, and this will only increase. It has been said that regulating this new area is problematic, but perhaps CADR provides a potential solution
There has also been consideration of how an independent investigator might resolve conflict in areas such as motor vehicle accidents or neighbour disputes, matters unrelated to contract but well suited to a resolution based on the independent confirmation of facts.
In these areas anecdotal evidence is that a body such as the Disputes Tribunal seems more inclined to “split the difference” where facts are in stark conflict, to the satisfaction of neither party, nor principles of justice.
We live in a changing society, and we must change with change. Legal structures do not only need to be relevant, but adaptive. Has the time come for us to recognise the shortcomings of the structures that have governed our lives for centuries?
Peter Marriott is a lawyer who left private practice as a litigator some 20 years ago to work in commerce and corporate governance. He was involved in the establishment of Financial Services Complaints Limited (www.fscl.org.nz) the largest CADR by membership in New Zealand.