52

IN

AVOIDABLE WASTE.

1

N continuation of a previous article, Expedition and Economy in Litigation,' 1 I have to draw attention to new instances of large economies effected and to the serious leakages in the present system which remain unstopped, and cause great hardship to those who are compelled to defend themselves in the High Court, or to resort thereto for their lawful remedies. In passing, I feel bound to express my gratitude to those, especially judges, who have shown a real interest in the subject, and to Lord Haldane who intended, if he had remained in office, to refer the matters discussed to a special Committee.

Those with whom I have conferred approve so emphatically of the method adopted that I am following it again.

The case to which I referred in the former article as No. 2 requires to be recalled, as at the time of publication I was unaware of a crucial fact, the result of the taxation of the costs. The statement in a less condensed form was as follows:

No. 2. Action by landlord against tenant, for damages for breach of covenant to repair, begun in 1920. Order for pleadings. Statement of claim delivered in two months, and particulars after another six months, £100 being claimed. Defence, a simple denial, six months later, with a payment of £10 into Court. The case did not reach the Official Referee until 1923, when a day was fixed for trial. Judgment was given for the plaintiff for £16, and costs on the County Court Scale.

The result of the taxation was that the party and party costs allowed amounted to £12, the plaintiff's solicitor and client costs being £80. Summarizing the plaintiff's position, we find this. He was entitled to sue the defendant for breach of covenant, and to recover £16 which the defendant unjustifiably refused to pay but by enforcing his rights, the plaintiff was kept waiting for two and a-half years, and then found himself, though successful, a loser by £68 less £16, i.e. £52, more than three times the damages. The prosecution of a good claim for £16 involved him in a dead loss of £52. The defendant, on the other hand, owed £16, and naturally wished to resist a larger claim. He gambled on the opinion which induced him to pay

1 Law Quarterly Review, October, 1923, p. 427.

only £10 into Court. It was never explained to him, one must suppose, that payment into Court of too small a sum, with a denial of liability, is almost worse than an absolute refusal, and when the account was balanced he found himself on the wrong side by nearly £100 instead of £16.

The case ought to have been sent to a referee in 1920, without restriction. It was one of the well-known type, unsuitable for any other tribunal. The particulars of dilapidations should then have been examined, and reported upon, and the £16 would have been ascertained, and disposed of, at a cost of a few pounds in a few weeks. More than two years would have been saved. The system which allows such a result as was reached in this case, without remedy, and in profound silence, must be defective.

In another recent case the plaintiff recovered less than £20 after a three days' trial, the costs altogether amounting to over £400; and in a third, of which I find a record, where the claim was equally small, and a counterclaim of under £100 failed, the trial occupied two days, and the plaintiff's costs amounted to £190, the defendant's to £200.

To whom can the parties address a complaint?

It is the object of these articles to show that such great waste of money is quite unnecessary, and that by the proper use of the summons for directions an immense saving is, and always would be, effected. The second point is that in all cases involving expert evidence the employment of an independent witness, engaged and paid by both sides jointly, has during the last few years effected an economy of remarkable magnitude in the Court in which this simple expedient is introduced. Its success has given complete satisfaction to the litigants.

Before giving the cases which have come under my notice since those numbered 1 to 25 in my former article, I must say a word about what I there called the quicksands of arbitration,' because a complaint has reached me which shows the depth of ignorance on the subject:

No. 25a. A defendant in a building dispute of a common type was offered arbitration, and enquired of his solicitor whether a High Court Reference would not be more satisfactory. He was advised that it would be much more expensive. The case, therefore, went before an arbitrator, and lasted for five hours, a fee of £50 being charged; and an award was made against the defendant for about £100. He found on enquiry that the Court fee would have been £3, and that he had no right

of appeal and no remedy, except fresh litigation against the arbitrator, which no one would advise.

For many reasons, which would take too long to state here, arbitration is often unsatisfactory and always expensive.

As regards delay, intentional or otherwise, imprudence, extravagance, the neglect of Order 30 (summons for directions), and the use of the independent witness and other kindred matters, I note the following cases, the first of which recalls No. 6 (in the former article), in which the plaintiffs lost their money and withdrew their case sixteen months after the writ, owing to the defendant by that time becoming bankrupt.

No. 26. In April, 1920, the plaintiff sued for the price of building work, and took out a summons under Order 14. Instead of referring the case, the Master ordered pleadings, probably by consent. The defence (due on May 14) was delivered on June 5, and its particulars on July 30, 1920. Nothing happened for three years, when the case was referred, and came before the Referee in October, 1923. November 8 was fixed for the trial. The defendant was adjudicated a bankrupt on October 30, and the action was withdrawn.

No. 27. The plaintiff sued for the price of goods sold and delivered, and served a specially indorsed writ for a large sum in March, 1922. Notwithstanding the summary nature of the writ and the cause of action, the pleadings took sixteen months to complete. A reference was ordered in November, 1923, but no steps were taken under the Order for sixteen months more. Then an application was made to fix a date for trial upon which the case was settled. It should have been disposed of in 1922.

No. 28. On a very large building contract the plaintiff claimed £800, the balance unpaid; and proceeded under Order 14, when an order for payment of £500 was made. When the case was referred, with a counterclaim for £500, the defendant strenuously argued that nothing was due to the plaintiff, and invited the Official Referee to inspect the premises, accompanied by a surveyor for each party. The plaintiff promptly agreed, and the inspection took place. Half the counterclaim was for the removal of a new heating apparatus and reinstatement of its predecessor, but this proved to be a mistake, as the defendant's architect had in fact given an order for the change; and it was admitted that some of the other defects complained of were due to faulty design, and not to bad work. The contract provided for dealing with defects after completion by a three months' maintenance clause; but this limit had expired before the final certificate was given, and the

defendant's case fell to pieces. Terms were shortly afterwards arranged, and the defendant saved in costs more than the amount of his liability.

No. 29. This action was begun in June, 1924; and if it had been referred on the summons for directions, as it might well have been, it would have been disposed of before the end of the year. It was referred in 1925, and the Official Referee was invited to view the premises so as to understand the dispute. This was promptly done. The plaintiff had undertaken to extend the defendant's hot-water supply in an hotel, and when the work was finished the flow of hot water was insufficient. There was a large counterclaim for loss of business and for the estimated cost of remedying the defect. At the inspection it was agreed by the parties that the existing pipe leading from the boiler was in fact too small. The plaintiff claimed to have carried out his contract exactly; the defendant contended that he had broken an implied warranty that the existing pipe was large enough to give a satisfactory supply of hot water when the specified extension was carried out.

A day was fixed for the trial; but it was suggested by the Court that the old pipe might meanwhile be replaced by a larger one, and if this were satisfactory the parties might perhaps agree on the price, the loss of business being remote and difficult to prove. This was gladly accepted, and the dispute was shortly afterwards adjusted.

It is not necessary to comment upon the satisfaction of both parties at the result, as the question of law involved was novel and difficult, and protracted litigation of a very uncertain question was the last thing to be desired.

No. 30. An action for the price of building and decorating work was begun in October, but came before the Referee in the following January. The defendant, a professional man of experience and ability, appeared in person; he had discharged his architect, and wished to put in a large counterclaim. He postponed his consent to the employment of an independent surveyor, but invited the Referee and the plaintiff to visit his house, when the defective work could be seen. This was done, with the result that the builder was able to satisfy the owner then and there that substantially the complaints were either quite mistaken or met by the architect's approval of the work. Some alleged overcharges were explained. This preliminary inspection, which brought the parties together, enabled the plaintiff to get paid many months before it would have been;

possible under the old system, and saved the defendant at least £200.

No. 31. Up to a short time ago the ordinary action arising out of a breach of covenant to repair took over a year, and cost the tenant about £200 beyond the cost of the repairs. In this case the circumstances were ordinary; a claim for forfeiture, possession, and damages was referred. The defendant had done some repairs in response to notice with schedule of dilapidations, but had not satisfied the plaintiff's surveyor. The plaintiff did not want a forfeiture, and the defendant offered to satisfy any independent surveyor. After a discussion in chambers on date and mode of trial, it was agreed that the defendant should have two months to complete, and that then an agreed surveyor should certify completion, or assess the damages, with judgment for that amount, and the plaintiff's costs in any event provided for. Time from summons to judgment, two months.

No. 32. In January, 1925, the plaintiff issued a writ specially indorsed for £150, the balance of a large account for building work. The case was referred in April, and after a discussion in chambers the defendant's affidavit under Order 14 was ordered to stand as the defence, with particulars in fourteen days. Seven days, however, were enough to settle the case, the great obstacle of heavy costs not standing in the way, as it so often does at the trial. This was evidently not a very contentious case; but differently treated it would have taken a year to settle, and the unnecessary loss to both parties would have been great.

No. 33. The defendant employed the plaintiff, a builder, to give a rough estimate for work. The plaintiff mentioned £100, but received no order before beginning the work. The defendant, however, from time to time, as the work proceeded, paid £150 on account, and at the end the cost amounted to £266, to which he objected. A writ was issued for the balance in January, and in the ordinary course the action would have lasted for a year and cost over £300.

It was referred on an affidavit by the defendant (under Order 14) that there was no contract beyond the £100.

In May the parties' representatives discussed the position before the Official Referee in a sensible, businesslike way. The defendant offered to pay promptly whatever a local surveyor estimated as correct, and the plaintiff at once agreed to accept the amount so ascertained.

The importance of this and many similar cases is the evidence