The case is an industrial injury action, and the judgment is on whether the parties had reached a settlement. From the practitioner’s point the case is a salutary reminder of the importance of clarity in with prejudice communications. From the point of view of academic law on offer and acceptance in contract, the judgment is, with respect, a minefield, although it probably reflects the way in which many practitioners would approach the problem of whether or not there was a contract to settle the action.

The claimants had been funded by their union. It is not possible to recount the complex negotiations accurately in the available space. It went something like this. There had been ongoing and amicable discussions towards settlement. The defendants said something like, ‘If your clients drop their chemical injury claim, we have a settlement.’ The claimants’ union decided to stop funding the chemical injury parts of the action, and it looked all but certain these would be discontinued. The claimants’ solicitor phoned the defendants’ solicitor and said something like, ‘ Just to keep you up to date, we are dropping the chemical injury action.’ The defendants thought their settlement offer had been accepted. The union changed its mind and decided to keep funding the chemical injury part of the action. The defendants said, ‘Hold on, we’ve settled that.’ The claimants replied, ‘No, when we phoned you that was not an acceptance of your offer, that was just an update on what is going on.’

The judge looked at all the communications, including a private letter from the claimants’ solicitor to one of the claimants, and formed a view about what was really going on in the disputed phone call. He decided that the claimants had not in fact accepted the offer of settlement.

A textbook-writer’s minefield: From the point of view of the traditional contract textbook writer there are at least three questionable features of the judgment.

Was there a contract: a question of fact or of law? Does it matter? To understand the first questionable feature it is necessary to recall that English nineteenth century contract law evolved in the context of a jury trial. The jury was decided as a matter of fact what the parties said. The court would decide as a matter law how those words should be interpreted (with certain exceptions like explaining trade terminology). Whether there is a contract at all is, like the interpretation of a contract, decided by construing the documents or words used, and is not question of fact but of law. However, in Beardall the judge has merged this two stage process. Instead of first deciding the words or conduct used (the question of fact), and only then deciding whether there was a contract (as a matter of law), the judge has looked at the evidence and asked, ‘Is there a contract as a matter of fact?’ I think a lot of practitioners would react in the same way, and for that reason I will not say the approach is wrong. The approach to the problem is however a departure from tradition. It is arguably in tune with current trends but is not fully justifiable by the available case law.

There is one key point at which this merging of fact finding and construction becomes apparent. The claimant’s solicitor made a note to herself describing the disputed phone call as an ‘update.’ The judge accepted it was an update. The judge did not explain whether he was drawing an inference from that note about what was said, or whether by contrast he was using that note as part of the background to help him in the task of construing what was said. He does not appear to have distinguished the two processes.

Treating the question of whether there was a contract as one of fact, rather than of law, has consequences. For one thing, it is that it is much harder to appeal a question of fact than a question of law.

Use of negotiation evidence: The second thing the judge did which was questionable was to look at the alleged agreement in the context of the negotiations as a whole. Again one has sympathy for his approach – it seems artificial not to look at the course of negotiations. But negotiation evidence has always been excluded by the policy of English law, and its exclusion is expressly maintained in Lord Hoffman’s influential speech in Investors Compensation Scheme v West Bromwich.

Use of the parties’ private documents: The third questionable feature of the judgment is that the judge looked at private notes and ‘internal’ correspondence made by the parties. Now if the judge did that in order to decide what was actually said, as a matter of fact, it might be defensible. But he appears to use that evidence in order to decide whether ‘objectively’ (presumably from the point of view of the court) the parties intended there to be a contract. The problem with this, in theory at any rate, is that the judge’s assessment might be objectively impeccable in the light of the materials before him, but when the disputed conversation took place the parties did not have access to one another’s private notes and correspondence.

Clarification needed: It is not submitted that the judge’s approach was wrong. It is submitted that it illustrates a gap between theory and practice which can and does create problems in cases of this kind (I mean cases about how to construe evidence about the existence of a contract, and about its ‘meaning’). For those reasons, it would be useful if the judgment were appeal and the issues clarified (although one would not wish that on the litigants).

The practical message: From the point of view of the busy solicitor the message of the case is very different. The message is, If you think you have a settlement, put that in writing straight away, however amicable relations between the parties may be. If you fail to do so, woe betide you.

A unified civil court system? At the beginning of February the Department of Constitutional Affairs published a consultation paper on a unified court system, entitled, A Single Civil Court?. There are two big ideas in it – though it says the government is not as yet committed to either, or to any change at all. The first idea is to merge the High Court and the County Courts into a single national court of which the current County Court buildings will be branches. The second idea is to establish a single family court to handle all the family work currently undertaken by the High Court, the County Courts, and by the magistrates’ courts sitting as Family Proceedings Courts. The various questions these idea imply about specialist lists, divisions, and status of judges are discussed. Responses are to be in by 27 April 2005.

There are reasons given why reform might be a good idea. I paraphrase. First, the court system would be easier to understand. It would be easier, particularly for non-lawyer, to know where to issue proceedings, and people might be readier to use the courts. Second, it would be easier to allocate work to the lowest appropriate level of judiciary. Third, administration of the court system would become more efficient.

It is plain that cost saving is driving the proposals more than the consultation admits. I noted this tendency in an earlier column about rising court fees, where I pointed out that from the United States to Scotland to Spain to Hong Kong the court system is a state-subsidized public service. In England the policy is for it to break even. Poland apparently retains tradition that court system makes a substantial profit. Having said that, the government should not be criticized for keeping costs down, and keeping taxes down, provided the quality of the judicial system does not suffer.

It is self evident that a more efficient administration is supposed to be cheaper. It is also self evident that allocating work to the lowest possible level of judiciary would save costs, and in the regulatory assessment at the end of the document, this type of cost-saving is quantified. It might not be obvious that encouraging Joe Public to issue more claims would improve court finances, but in fact the County Courts make a profit on court fees, so it would.

As if to underline centrality of revenue as the driving ideology of the proposals, the consultation documents suggests that it should be for the judiciary to decide whether to abolish, or to keep (and perhaps create) specialist lists. Except in the case of the Commercial Court. That brings money into the country. Therefore, it would be enacted that the judiciary may maintain specialist lists and shall maintain a Commercial list.

The document states that judicial pay and conditions would not be affected. It does not say the same of lawyers. The issues affecting practitioners are clearly, whether solicitors’ rights of audience (without an advocacy certificate) will be extended to the higher levels of the court; and how the scale of fees for legally aided work, which currently varies with the level of court, will be adjusted. The consultation documents makes no undertaking that the current levels of publicly funded fees will be protected.

It may appear that I have given a carping summary of a project for simplifying the court system which is in general laudable. That reflects a personal judgment. The driving ideology of saving money does threaten to turn this good idea into a bad outcome. This government have not been parsimonious in everything they do, and have been careful to avoid too closely counting the costs foreign policy interventions, yet they are thinking in parsimonious terms when they seek ways to improve the quality of English justice. To that extent, I disagree with the government’s priorities. If the proposed changes can save money and improve the quality of justice at the same time, notwithstanding the perverted priorities which inform fiscal policy, then they will receive a general welcome.

Dr John Birchall - Professional English, Legal English, and Common Law Training