20210813 Uncommon law, equity and justice; or Denning’s Revenge.

We all have our heroes. Amongst mine is English judge Lord Denning.

But hero worship needs to be tempered with a realisation that even something good can lead to something bad when people who don’t understand what they have use it in the wrong way.

Denning (always referred to by his surname only) was unusual in that he came from a humble background and found his way by dint of successive scholarships to study law at Oxford after which he became a barrister and ultimately a Law Lord.

Denning was a founder of the modern school of legal thinking that says that justice is more important than precedent. First as a barrister and later as he progressed through his judicial career, a judge who would, in the eyes of some, tear up previous judicial determinations. His career reached a concrete ceiling when, as Master of the Rolls, he met the caustic and often unpleasant Lord Scarman. Denning had been a Law Lord and gone back to the Court of Appeal to take up the post, often considered the most powerful other than the Lord Chancellor, of the Master of the Rolls.

Why would he, a judge-for-life, step down from the House of Lords (now the Supreme Court) to the Court of Appeal?

“It’s not so much fun in the Lords; you are one of five and no one takes any notice of a dissenting judgment,” he told the BBC’s Roy Plomley on Desert Island Disks in 1999.

In short, his wings were clipped and he didn’t like it. A dissenting judgment in the Court of Appeal can be used by the losing party in support of an appeal so there his views could have an effect even if he was on the side of the loser – as he often was.

You can listen to Denning explaining what “Master of the Rolls” means, and more about him, his life and his work, here: Lord Denning: Desert Island Discs – 1980

Scarman was a judge who believed in the precedence of precedent.

Precedent is the basis of the system of Common Law which says that where a case on the same material facts has previously been litigated, then cases which are “on all fours” with that case must follow the previous decision. This is why, even today, countries that adopted the British legal system continue to regard the decisions of senior courts, both at home and in other jurisdictions, as relevant.

Precedent is either binding, which means it must be followed, or persuasive, which means it should be followed. If the material facts are so different that the cases can be seen as different, then the Court can distinguish them which means that what appears to be precedent might be taken into account as part of the reasoning but it is not followed.

It is in this context that we often hear the phrase “but nothing turns on that.” It means that the Judge recognises that there is a difference but that that difference is not material, i.e. big enough, important enough or even relevant enough, to justify distinguishing the present case from the precedents.

I love reading Denning’s judgments: he had a wicked wit, he had no qualms about being short with both the parties and their lawyers; he could be cantankerous one minute and whimsical the next.

But his over-riding principle was to follow a legal requirement from almost a thousand years earlier, which is why I described him as a founder of the modern school of legal thinking..

For many years, there were two principle systems of law: one, the Common Law, was generally referred to by the single word “law.” The other was “equity” and that was based in, but distinct from, ecclesiastical or cannon law. Ecclesiastical law was, at the time, that of the Roman Catholic Church.

The Common Law was relatively rigid, although not as rigid as the civil law, prescriptive, systems we see in many countries today.  It was in Common Law that the system of precedent developed. It was, modern historians like to opine, a reactionary force against the liberalism displayed by many judges.

I can’t claim to have a carefully researched argument against that opinion but my feeling is that it’s trying to apply 20th/21st Century sentiment to a situation that developed, quite organically, over centuries. In fact, the Common Law developed as a way of providing a national system of justice providing all citizens with a system of local tribunals and regional then national appeals with a view to ensuring consistency of determinations up and down a country which was still, largely, run by local barons, etc. and where corruption and influence were ripe.

The Church, on the other hand, applied a national, indeed international, set of standards across all its dominions – as it does today.

The Common Law and Equity ran as discrete legal systems until, in England and Wales, 1873 when The Judicature Acts were passed.  There is a general misunderstanding of what happened. Many people say that the 1873 Acts “merged Equity and Law.” That is actually far from the case. What the Acts did was to harmonise the procedures and to bring both systems of law under the same management known as “the Judicature of the Supreme Court (that was when “Supreme Court” was the structure, not a hearing in a room which is singularly lacking in personality or character); what the 1873 Acts did not do was to subsume either Law or Equity into the other.

In particular, the laws of Tort (harms) and Contract were and are where one finds actions subject to the Common Law; Equity dealt and deals with matters of conscience and fairness. It is sometimes said that Law enforces rights while Equity enforces fairness. The terms “actions” and “matters” have largely been swept away in late 20th Century changes to the English legal system.

There are two long established phrases that all those trained in systems developed from English law will remember:

a) the waters of Law and Equity run in the same river but never mix.  Think, if you will, of oil and water.

b) in the case of dispute between Law and Equity, Equity shall prevail.

I have written before that the late 19th Century was the golden age of English jurisprudence and, often, when you read my articles or study my training, you will find that I refer to decisions made in that period. The reason is simple: even today, even after so many changes in legislation which, in many cases, has the specific purpose of preventing the application of Common Law, we find that the decisions made then are directly relevant today’s cases. One might even argue that the fundamental change in the language of legislation is specifically so that words judicially defined so long ago are expunged from today’s courts and is therefore subversive, even though performed by an incumbent government.

This is because in the Common Law, judges make law. That’s what precedent is. Consequently, in an increasingly centralised and authoritarian style of government, parliament makes prescriptive law, removing the power of judges to interpret it. But that’s a discussion for another day.

Denning’s approach was always this: look at the case, find what would be a fair solution, find a way to achieve that objective. Denning, then, was at heart a man of equity.

Scarman, in my opinion, was very learned but far from Denning’s intellectual equal. Today, we hear those versed in the buzzwords of management-speak unwittingly calling the spirit of Denning when they say that managers should not be allowed to say “but that’s always how we’ve

Those who say “if it ain’t broke, don’t fix it” are not inconsistent with Denning’s thinking – so long as their view is based on proper assessment not on lethargy or habit. Denning was quite happy to follow precedent where it supported the result he considered fair. But he was also quite happy to find extremely fine (in this context that means “narrow” or “tiny) points upon which to distinguish the case before him from those that had gone before if he felt it served the interests of justice. Those points would usually have been met by other judges with the comment that “nothing turns on that.”

It would be overly simplistic to distil the conflict between Denning and Scarman to a never-ending battle between Equity and Law but simplistic doesn’t mean wrong. Scarman took great delight in overturning Denning’s decisions and making snide, sometimes brutal, comments about Denning’s carefully reasoned judgments.

Scarman was a symbol of the establishment; Denning was the champion of those who generally had no other champions.

Denning said ”

All my career, I’ve tried to stand up for the freedom of the individual against the executive power or the power of any great authorities.”

Scarman lived by the mantra that “this is how we’ve always done it” while Denning entertained himself by being comfortable within that regime so long as he could add “until we didn’t.”

But my hero worship for Denning is tempered with this: the most able mind in British jurisprudence did irreparable harm to the British legal system.

Denning’s unfortunate legacy.

I had many reasons for leaving the practice of law. One of the most prominent was the fact that we were seeing the appointment of many judges who lacked the experience that I believe judges should have and, worse, lacked the intellect that I admired in great judges.  One of the manifestations of these factors was a rash of judges who thought they could “do a Denning.” They could not. Decision after decision was random. Going to trial became a lottery. As a result, I could no longer provide litigation clients with an accurate assessment of their prospects at trial. And if I couldn’t do that, because I was not the kind of lawyer who was happy taking fees without being reasonably certain of the result, I could not in conscience continue.

The great thing about Denning is that he was not rash, although Scarman thought he was: if a lawyer was clever enough, he could work out before trial what Denning might think.  The lawyer would not be taken by surprise as Denning’s interruptions of the case gave guidance as to the way he was leaning which meant that advocates had the opportunity to tailor their cases.

When one reads Denning’s judgments, they are clearly and logically structured. He does not, as do so many judges, ramble until he happens across the answer he wants.

Today, there are some High Court judges, and some in the Court of Appeal, who are not only clever but are able communicators. At the Supreme Court, created by the largely republican Blair Government as part of its plot to sweep away a thousand years of English legal system, we see far too much fumbling and lack of clarity. There is, perhaps, some hope that the system will ultimately self-repair. But that won’t happen if political correctness afflicts the choice of judges when the only criterion should be ability.

Scarman was not Denning’s only critic. There was also Lord Diplock who, I considered, to be close to the perfect judge: his memory for case-law (i.e. precedent) was prodigious, his analytical mind incisive and his clarity in judgments was pragmatic rather than eloquent. But he didn’t much like what he saw as a cavalier approach by Denning. Diplock was scathing about Denning’s attempts to develop a new approach to contract law. Denning proposed a revision of the basic principles under which contract can be valid only if certain criteria are met. Amongst those are that there must be an offer and acceptance.

For once, I’m with Denning’s opponents: I think he was wide of the mark. He seemed to be taking the view that goes beyond equity, arguing that the law should be fluid and that fixed notions of how a contract is formed are not necessary.  I can see why he might want to adopt that position but I can also see severe adverse consequences.  Why is it, prima facie, a good idea? Well, he’s taking to its logical conclusion the accepted approach that an offer and acceptance can be implied; if it can be implied – which is done from conduct – why do we need formal agreements?

That’s easy to show.

This week, a friend asked me to look at an employment contract she had been sent. In that long document I found this: ”

The Company reserves the right to second you to perform, undertake, discharge or supervise any assignments in any other departments or sections or any of its Associated Entities, subsidiaries, associates or related companies located in or outside [the country] for such period reasonably determined by the Company.

This is an extraordinary term and the reason it’s in the contract is because it is highly unlikely that any Court would find such a clause to be implied. Of course, some lawyers would say that the inclusion of the clause isn’t important because it could be challenged in court and variations of terms e.g. as to accommodation, security, travel, etc. will be implied.

Thus speaks a contract lawyer who has never done much litigation.

It can never be a good idea to enter into a contract with the view that any problems can be ironed out in court later. It is, as we saw with the madcap “fast fail” approach in management recently, born of the idea that it’s better to just get on with something as resolve whatever comes up as it comes up. It’s why the dedication of my book Sun Tzu and the Art of Litigation (see the books tab above) is dedicated to the solicitor who taught me the most important lesson : “don’t only think about how you can win, also think about how you can lose.” In short, preparation in litigation or contract (which I always saw as two sides of the same coin) saves cost, disruption and heartache later.

That terms can be implied into the contract by e.g. a court happens to be the advice my friend had been given, without regard to another clause: “Absent any new written agreement signed by you, this Agreement will apply to any other position which you hold with the Company.” That means that if my friend changes jobs within the company, the contract would remain operative as it stands, even when that change of jobs is forced on her under the clause I first mentioned.

This demonstrates the argument: my view is that the contract is far from fluid; the advice she had received is that the specific clause can be fluid, despite the clear statement that it is not.

However, in a fascinating turnaround, the English Supreme Court has, given at least tacit approval of Denning’s approval of fluidity while the Court of Appeal has spoken strongly in favour of maintaining the status quo.  See Richard Stone’s analysis (2012) of this particular point: it’s a rabbit hole that I don’t intend to go down here.

Stone: 2012

The thing is that Denning was not, in fact, entirely supportive of fluidity: what he actually argued was for something that we might, today, consider a completely sensible approach not because of its legal exactitude but because it responds to social change. He argued that, often, there is no single document that establishes a contract and therefore no single offer and no single acceptance. Today, as we all make agreements by e-mail, phone messaging systems and over video-link, there is less likely to be a clear crystallisation of terms into a single, comprehensive document. To find a contract, or to deny one, it is very likely that Courts are handed sheaves of pages and told “this is what I thought we’d agreed.”

So, after that diversion, why, you may wonder, did this topic come to mind and why did I think it’s worth your time to learn about it? Well, as you might imagine, it came about because of a case, the judgment in which has just been published. And the entire reason for the case seems to be that the plaintiffs entered into a course of action without full consideration of all available facts, thinking they could resolve any problems later.

It’s the case of  Arthur Jones and Rhian Jones -v- Ministry of Defence

There’s a personal interest in it: it’s about aircraft noise from an RAF base. The plaintiffs (which in the baby language adopted in English courts as part of the distancing from history thing mentioned above are now called “claimants”) complained about the sound from jets doing circuits and bumps. I used to live in a direct line from the end of a military runway which later became a civilian airport. The lumbering passenger buses (except Concord which, sadly, only rarely visited) weren’t much fun and they did circuits and bumps a lot. But in the early years the fast jets – the Lockheed Lightnings – were a joy: they would leave the runway, climb and then stand on their tails over the house. Everything shook. If we were lucky, we’d get a sonic boom which, today, is illegal over land.  The relevant point is that we knew what we were getting into when my parents bought the house. Caveat emptor comes to mind, even though it’s not directly relevant.

We old Common Lawyers learned an expression: “he who comes to a nuisance cannot complain of the nuisance.”

It is surprising how many times such long established principles are re-litigated and how often decisions, especially at first instance, come to different conclusions. It is also surprising how often higher courts look for ways to distinguish cases to reach the decision they consider just.

It’s happened before: houses built around the perimeter of the Brands Hatch racing circuit were sold at high prices to persons who later complained about the noise, with a tribunal compelling the owners of the circuit to reduce their activities and to take steps to reduce racing noise. That should not have happened, either in law or equity. The fact that it did, gives heart to others.

The judgment, in the Manchester District Registry in the High Court, was heard, as is normal in such cases, by a judge sitting alone, in this case His Honour Judge Sephton. Sephton, J was far more patient than I would have been had I taken up any of the several invitations I received to join the Bench. And he was far more gentle than most of the judges I appeared before would have been when delivering scathing comments. The judgment is worth reading, if only because it demonstrates how far judges now feel they have to go to make their judgments less likely to be appealed – and how nice they have to be to the parties.

It’s also useful as it demonstrates first how makeweight claims are added: the claim under the Human Rights Act was not only not fully formed but, so far as I can see, had no prospects of success.

The case could have been easily determined at a preliminary hearing, with one essential question: did the noise complained of pre-date the plaintiffs’ purchase of the property? That it proceeded to trial so that the plaintiffs could try to establish a distinguishing element is, I am sorry to say, to be laid firmly at the door of my hero and those who see his achievements as an excuse to run cases that, common sense and Common Law say are doomed from the outset.

I feel sympathy for the Joneses. They had a dream but they didn’t think it through and not only did it not turn out as they hoped, it’s cost them time, money and emotional strain.  But they came to the nuisance and that’s what the Court found. Precedent and the Common Law won but it did so because it would have not been Equitable for it to have been otherwise.

Why is a tendency towards fluidity in law a problem?

In consequence, I fear for those of us that define policies and procedures. We need certainty. We need to know exactly how a court or other tribunal will determine what is right and what is wrong. Those who write laws and regulations are not, or should not be, the final arbiter of how they are interpreted and/or enforced.

There is an argument as to the primacy of parliament but that has long been controlled by the power of the Courts to find that laws are unjust or imprecise . For some years now, actually predating the Blair years starting in 1997, there has been a tendency for law to include notes that are seen as indicative of “parliament”‘s intent. They are, therefore a fetter on the jurisdiction of Courts for which discerning the intent of parliament was a core function of preventing legislative over-reach.  Add in delegated authority which puts legislative power into the hands of regulators which become investigator, prosecutor, judge and, largely, final arbiter applying criteria that change on a case by case basis and we can see that the legal system has been sidelined in the supervision of the financial sector.

It is ironic that I sit on a fence: I want to protect those who are subject to the ever changing and always increasing demands of policy-makers by suggesting that we reduce the amount of change. But I want to protect society from financial crime and that’s a function of the Common Law, Equity and, of course, legislation.

It’s a fence that Denning would have been very happy to join me on while deciding which way to jump for the simple reason that the right answer is the one that seems to be the most illogical. And with supreme irony, it’s a fence that Scarman and Diplock would have barely noticed: they would have argued that we have precedent and for the vast majority of cases, that’s that – which would, I feel, end up with the same results as Denning although the reasoning would be different. Following the principles of equity does not mean adopting the principle of laissez faire (let it be) but it does mean that the law should not interfere in all aspects of a person’s life without good reason. Prescription, micro-regulation, is not – in my view – a good reason and, worse, it is counter-productive as it militates against the ability, or will, of those working in regulated businesses to fully identify the risks that are presented by the very persons that the law and regulation is intended to counter.

All that’s needed is to find a way to explain it in such a way that the decision cannot be successfully appealed. And a court brave enough to try.

That, one has to say, is highly unlikely to be the Supreme Court of England and Wales as it is presently constituted.