As chambers become more specialist and with the LCD's plan for a single business court, traditional divisions between the commercial court and chancery division are becoming increasingly irrelevant, writes Derek Bedlow
|May 02, 2001 at 08:03 PM
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While the wailing and gnashing of teeth continues at the commercial bar after the publication of a silks list that ignores many of its best for the second successive year, many at the chancery bar might be forgiven for feeling pleased with themselves.Of the heavyweight commercial sets, only Essex Court and Blackstone Chambers to a lesser extent, had much to celebrate. In the meantime, newly formed Maitland Chambers was celebrating two silks, and Serle Court, 3-4 Gray’s Inn Square and 11 Stone Buildings one each. But the relative number of silks awarded to each side may reflect less on the quality of the individual chambers and more on what seems to be going on in the respective divisions of the High Court. According to the Lord Chancellor’s Department (LCD), in 1999, when the Civil Procedure Rules (CPR) were introduced, claims listed in the Queen’s Bench Division (QBD) of the High Court, which includes the Commercial, Construction and Technology and Admiralty courts, fell sharply by 37%. In the same year, the number of claims listed in the Chancery Division fell by only 1%. The official figures for last year – the first full year after the Woolf Reforms, will not be released until June – but, as Legal Week reported last week (26 April), the LCD has indicated that they will not be radically different from 1999.The CPR seem to have had almost opposite effects on the two sides of the High Court. As Woolf intended, the rules do appear to have made litigation the last resort for disputes headed for the QBD. In its Civil Justice Reform Evaluation published in March the LCD seems to think the fall in claims is permanent. Since the basic remit of the Commercial Court is to deal with contractual disputes – which are increasingly likely (or compulsory in the case of construction contracts) to contain arbitration or alternative dispute resolution clauses – this would seem inevitable. For now at least, the time limits imposed by Woolf have re-invigorated the list at the Chancery Division, which according to sources at the chancery bar, is notorious for the number of sleeping claims. But the relative fortunes of the respective divisions may not simply be the effect of the Woolf Reforms. In February, the Court Service published the results of the Commercial Court Feasibility Study, a report into the court system for which it commissioned Cap Gemini Ernst & Young. The study looked at statistics from 1985 to 1999 for the Commercial, Admiralty and Technology and Construction Courts in the QBD and the Patent Court, Companies Court and other ‘business trade and industry’ cases heard in the Chancery Division.It concluded that, in terms of volume at least, the work of the commercial court had declined over this timeframe, as had the number of claims issued in the Admiralty Court and the Construction and Technology Court. By contrast, in the Chancery Division, the Patent Court had remained steady, and both the Companies Court and other ‘commercial’ cases (with the exception of insolvency) going through the Chancery Division had increased.The Chancery Division is the court for all seasons in many ways. Its remit is so wide that in periods when one area of its business in in decline, others can compensate. The rise and fall of the dotcom industry has helped at both ends – from registering patents and other intellectual property issues at the beginning of the cycle to insolvency at the other end. The range of disputes heard in the QBD is drawn from a narrower base so tend to be more prone to the vagaries of the economic cycle. While some specialisms, such as trusts in chancery and Landlord and Tenant in the QBD, remain the preserve of the respective divisions, a wider range of disputes can be heard in either division: the choice comes down to the requirements of the litigants and the services on offer. It is in what one practitioner calls this “free market” in judicial services that the Chancery Division seems to be ahead. “There is a good crop of judges at the Chancery Division at the moment so people prefer to use them,” a senior clerk at a commercial set says. “If you go to the Queen’s Bench, you might end up with a deputy judge but that is nothing new, it has always been the case.”Does this matter to prosperity of the commercial sets? They say not. “We are in the Chancery Division as much as the QBD,” one source at the commercial bar claims. “But when it comes to the Commercial Court, then people working there tend to come form the true commercial sets.”Nevertheless, the distinction between chancery and commercial sets is, at the very least, becoming fuzzier. According to the BDO Stoy Hayward annual survey of the Bar, average income per head at commercial sets is about £200,000, compared to £150,000 at chancery sets. These figures measure receipts, rather than billings, and the figures collected for the 2000 survey therefore largely reflects work done before the advent of the Woolf Reforms in April 1999 – the gap may be narrower when the 2001 survey is published later this year. It may be a sign of the growing confidence of the chancery sets that there is evidence of a growing magic circle since the creation of Maitland by the merger of 13 Old Square and 7 Stone Buildings, the expansion of Wilberforce and the absorption of 1 Hare Court by Serle Court Chambers. So at what point does the distinction between a ‘commercial’ and ‘chancery’ set become entirely irrelevant? According to one chambers director, this point is reached when each collection of chambers does at least 40% of their work in the ‘other’ division. This day may come sooner than later — the Commercial Court Feasibility Study was commissioned as part of the LCD’s on-going consultation process aimed at modernising the civil court system. A major part of its proposals is the creation of a single ‘business’ court, combining the Commercial court and the commercially oriented activities of the Chancery Division. Another emerging trend is increasing specialism. One recent example of this is Hogarth Chambers, created this year from the union of 1 Raymond Buildings and 5 New Square, which in addition to its IP and insolvency practices, markets itself as a media and entertainment set. “The important thing is to run yourself along similar lines as your clients so that you can provide a seam-free service,” Hogarth chambers director Ian Duggan says. If the chancery/commercial split is becoming irrelevant, when will we see the first mega-merger of leading commercial and chancery sets? Not long now, it seems. “The mergers that have happened are just the tip of the iceberg compared to the number that are being talked about,” says Mark Green, author of the BDO Stoy Hayward survey. “Sooner or later, there will be a merger between a strong commercial and a strong chancery set.”
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