Memorandum submitted by Professor Hugh
Beale QC, FBA
Thank you very much for arranging for me to
give evidence during the Justice Committee's pre-legislative scrutiny
of the Civil Law Reform Bill.
You suggested that I might want to send you
any extra comments in writing. If it is not too late (my apologies—the
last couple of weeks have been frantic), I would like to make
one technical point on Interest, and a comment on the last-minute
exclusion of Limitation from the Bill.
INTEREST
I welcome the inclusion of the provisions on
interest. The replacement of section 35A and section 69 by a single
provision (Clause 10) seems sensible, and so does the extension
to post-judgment interest (Clause 11). The Law Commission
did not study post-judgment interest because it was outside the
terms of reference.
My only point is that I think there is a serious
error in either the drafting or the instructions given to the
drafter. The Bill appears not to cover the case in which proceedings
are commenced and, before judgment, the debtor makes a part payment
but judgment is given on the balance. The court presently has
power to award interest on both sums; but it seems that under
the Bill no interest can be awarded on the sum paid before judgement.
Suppose D owes C £1,000. C commences proceedings.
D pays £600, as to which he recognises that there is no defence,
but C has to obtain judgement for the remaining £400. Under
Supreme Courts Act 1981, section 35A, the court may award interest
on the whole sum. The section provides:
Subject to the rules of court, in proceedings
(whenever instituted) before the High Court for the recovery of
a debt or damages there may be included in any sum for which judgment
is given simple interest, at such rate as the court thinks fit
or as rules of court may provide, on all or any part of the debt
or damages in respect of which judgment is given, or payment is
made before judgment, for all or any part of the period between
the date when the cause of action arose and:
(a)in the case of any sum paid before judgment,
the date of payment; and
(b)in the case of the sum for which judgment
is given, the date of judgment.
The words underlined mean that the court can
give interest on both the £400 for which it gave judgment
and the £600 paid earlier.
Under the Bill, clause 10(2) allows the court
only to award interest on sums for which it has given judgment.
Clause 10(3) applies only if D paid the whole amount otherwise
than in pursuance of a judgment. So it seems the court cannot
award interest on the £400. I am sure this is simply a mistake.
LIMITATION
I am disappointed that at the last moment it
was decided to omit the Law Commission's proposals on Limitation
from the Bill. I very much hope that the Minister's statement
(19 Nov 2009 : Hansard Column 13WS) that the reforms "will
not now be taken forward" does not mean that recommendations,
though previously accepted in principle, have now been rejected
altogether.
Officials from the Ministry of Justice kindly
saw me on 20 January 2010. They explained that the limitation
proposals had been excluded partly because the courts have solved
problems under the existing law and partly because they had carried
out a "targeted consultation" as part of impact assessment,
and had received largely negative responses.
The Ministry has kindly agreed to let me see
the responses (except those that were confidential) and until
then I cannot assess their validity. But my first reaction to
what I was told about them is that several are based on misapprehensions
as to how system would work. Moreover, there seems to have been
little investigation of the positive benefits of scheme. It is
true that the most glaring case of anomaly has been solved by
courts. (This was that a claim for intentional harm, such as sexual
abuse, appeared to be barred after six years, whereas a claim
for negligence in allowing the abuse to take place, for example
against an employer of the abuser who had failed to check the
abuser's background before employing him, would be barred after
a different and possibly longer period.) But many of the other
problems with the law listed in the Law Commission's report remain.
I agree that further study is needed before
the Law Commission's recommendations can be implemented both to
consider the latest objections and to update the recommendations
in the light of other recent developments in case law. I am now
discussing how this can be carried forward, given that the Law
Commission may not be able to devote resources to it for the time
being. I thought I should inform you of this.
Obviously it would help enormously if the Justice
Committee were to indicate, even informally, that it too hopes
that further study of the law of Limitation will be carried out.
But of course I would quite understand if the Committee felt this
would not be appropriate.
University of Warwick
5 February 2010
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