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Parker, Stephen --- "A case for private courts" [2001] AltLawJl 63; (2001) 26(4) Alternative Law Journal 161

A case for private courts

Stephen Parker[*]

Is it time for a market-driven response to the crisis of access to civil justice?

This article is a contribution to the continuing debate about how to improve access to civil justice in Australia. It is intended to stimulate argument and prompt us to examine our preconceptions about courts. The first draft was delivered in August 1998 as The Martin Kriewaldt Memorial Address under the title ‘Thinking Again About Courts in a Liberal Democracy’. This title was partly chosen so as to preserve the element of surprise when unleashing on an unsuspecting audience a suggestion for a private civil court system that would operate in parallel with Magistrates Courts and intermediate courts. It was also to emphasise that debates about reforming the court system are political debates, as well as legal and institutional ones. The values of a liberal democracy, including the ideal of the Rule of Law, impose some outer limits on what can safely be contemplated. On the other hand, these values require examination and interpretation. The scope for reform might be wider than initially supposed.

The article begins by suggesting we have three sets of problems that are related in complex ways to institutionalised attitudes or ‘mindsets’. I go on to suggest we should adjust our ways of thinking so as to allow for the contemplation of private courts. I give a description of how a system of parallel private courts might work and then deal with some objections to the idea. It will become apparent that the idea of parallel private courts is more relevant to States and Territories than to the Commonwealth jurisdiction.

I have no particular predisposition towards ‘privatisation’. The ideas below are not the result of a doctrinaire adhesion to reducing the scale of public institutions. Rather, they stem from an intuition that unless some radical change is at least considered we will be enmeshed for years in inquiry after inquiry into the judicial system without any great optimism that the situation will be improved.

The problems

The three sets of problems to be discussed concern:

• access to justice,

• public perceptions of courts, and

• predicting the effects of change.

The problem of access

We are said to have a crisis of access to civil justice. The word ‘crisis’, or a functional substitute, has been used by former Chief Justices, other senior members of the judiciary, political figures and leaders of the legal profession. There are many judges who will say that they could not afford to be litigants in their own court and, as one should with clichés, they would avoid litigation like the plague. It is unnecessary to labour this point. The problem of access to justice, and its components such as cost, delay, complexity and cultural barriers, are not seriously disputed, as far as I am aware. The problem does need to be stressed, however, because its extremity may lead us to contemplate solutions that would otherwise have been beyond the pale.

The problem of public perception

There are significant adverse perceptions of the courts in the community. In 1997–98 I carried out a research project on behalf of the Australian Institute of Judicial Administration, funded by the Commonwealth Attorney-General, into public perceptions of the courts’ facilities, processes and services. The Report, Courts and the Public,[1] attracted some predictably sensational publicity and a little judicial resistance. The views of ‘the public’, as unearthed by qualitative fieldwork involving 50 lengthy, semi-structured interviews, were remarkably clear and consistent. By and large, they were highly critical of the courts. Their views contrasted sharply with the courts’ own image of themselves, as reflected in 50 analogous interviews with court personnel. Although there are exceptions and varying degrees, over all it seems that Australian courts have failed to develop a reflex of putting themselves in the shoes of people who come into contact with them. They have also failed to convey to the public at large what courts are there to do and the limits they work within.

The problem of adverse public perceptions may be dismissed by some as mere ‘consumerism’ but it goes right to the heart of the justice system we operate. The justice system in liberal democracies like Australia relies ultimately on public confidence. In the absence of a civil militia or religious fundamentalism, neither force nor dogma is available to shore up respect for the courts. Rather, they have to win the consent of people.

The problem of prediction

The ‘unknowns’ associated with fundamental reforms are too complicated for us to predict or even process mentally. Court procedure is tied in to multiple arrangements outside the courts. It is related, for example, to the training, organisation and culture of lawyers, to the mode of legal reasoning, to the preferences and behaviour of litigants, and to wider social and economic forces and ideologies. This is also the case with jurisdictions that have inquisitorial systems. One international scholar has suggested that court procedure can tell us something about the dominant values in a society, about the role of the state, the authority of government and the place of the individual: so far-reaching is the relationship between procedure and the world outside the court building.[2]

We understand so little about the nature of this relationship that we cannot predict what any major change would mean for litigants, for the profession, for the economy, for government or society, nor how their behaviour would change and act back on the court system. In ‘we’ I include governments, courts, law reform commissions, social commentators, authors of self- published populist critiques, and academics. No one knows.

To some extent, differences in procedure and approach between Australian jurisdictions offer a limited form of laboratory, and one which is under-utilised because of the dearth of research in the area, but these differences between jurisdictions have not been designed for experimental purposes and there is in fact pressure towards uniformity across jurisdictions.

These three sets of problems — to do with access to justice, adverse public perceptions and the unknown effects of change — are inter-related. They are also related, in a complex fashion, simultaneously as cause and effect, to some mindsets we have.

The mindsets

The adversarial versus inquisitorial system mindset

We seem to have difficulty in escaping from the idea that in any really major reform we have to choose between ‘the’ adversarial system and ‘the’ inquisitorial system. At the level of generality that this is often debated the comparison is in fact useless.

Adversarial systems differ one from the other, as do inquisitorial systems. We have no more basis for choosing, say, the Belgian approach to litigation than the Belgians have for choosing between the English and the American. Also, each system is embedded in professional, social, economic and political arrangements and could not be dug up and transplanted with a different one without enormous cost and risks. It would be ludicrous for us to resolve to adopt the Belgian system by, say, 2010 and start work now copying their law schools, their admission requirements, their method of selecting judges, their legal reasoning processes, their constitutional protections for judicial independence (if any) and so on.

The adjudication versus ADR mindset

When we think of alternatives to judging, we think of procedures like mediation and conciliation. The choice is thought to be between an imposed decision or one agreed through a consensual procedure. We tend not to think of new ways of adjudicating or of mixing consent and coercion even though our knowledge of litigant satisfaction, which is admittedly limited, suggests that dignity and fairness may be regarded more highly by litigants than the mere fact of agreement.

The state monopoly mindset

We tend to think that, with some exceptions at the margins, the state in a liberal democracy must have a monopoly over the delivery of justice. The broad reason why the state is centrally connected with the delivery of justice is because the state represents the social or collective interest. We have a collective interest in civil justice as well as criminal justice. The courts are a civilised society’s substitute for vengeance. If a system were not provided for redressing grievances, then peace, order and good governance would suffer, let alone the economy. In the superior courts, of course, civil litigation also drives the development of the law itself.

We need to look more closely at this because we may be conflating two separate principles. The first is that the state cannot abdicate responsibility for providing a system of civil and criminal justice. The second is that the state must have a monopoly over force or coercion.

These principles are foundations of individual liberty in a liberal democracy. Our freedom of movement and ownership of property can normally only be restricted by an authority that receives its legitimacy from the will of the people acting under constitutional and legal processes. There are, of course, some exceptions. Self-defence must be permitted, because the state cannot be everywhere instantly to protect our person. Physical chastisement of children is permissible in the eyes of those who value family privacy more highly and do not want the state to be everywhere instantly. Indigenous forms of punishment might be acceptable, because we can contemplate limiting the geographical or social reach of a liberal democracy for historical reasons. Some also think that private prisons are acceptable, through delegation by the state. The general principle stands however, that the collective interest requires that the state should have a monopoly over force or coercion and, to ensure legality, must exercise it through its own courts.

The mindset I am referring to is one that adds the principle of non-abdication with the principle of monopoly over force and somehow arrives at a principle of state monopoly over justice.

The ‘end-state’ mindset

In thinking of reform we assume we must have in mind a specific outcome or new model for doing things. This stems in part from an objection to experimenting with justice. (It would be hard to justify providing a new procedure for one group and a placebo to a control group.) An alternative to end-state thinking involves introducing new processes and catalysts and monitoring closely where they take us. The suggestion about private courts, below, is essentially motivated by a need to stimulate some chemical reactions.

New ways of thinking

To address our problems and modify our mindsets we must adjust our conditioned reflexes to some degree.

With the adversarial versus inquisitorial mindset, we need to recognise a continuum of procedures joining up two extreme stereotypes. New techniques of case management and interventionist judging in Australian courts suggest that some of our systems have already moved along the line towards the inquisitorial end. With the adjudication versus ADR mindset, we can begin to imagine parties being allowed to give informed consent to procedures that will allow for the imposition of a decision they would not have chosen. With the state’s monopoly over justice mindset we can conceive of the state regulating procedures that are run outside the state apparatus — including procedures that impose decisions — provided the enforcement of those decisions (that is, the use of force or coercion) is always reserved to the state itself.

With the end-state mindset, we can imagine arrangements that will allow adjudicative bodies themselves to settle on a point in the interventionist continuum between adversarial and inquisitorial extremes, but doing so on the basis of experience built up over time about the preferences of litigants rather than on the basis of ex ante thinking. The point on the continuum might also differ according to the kind of case, the parties or some other relevant circumstance. In effect, we can devise a framework which allows for the reaching of a point on the continuum without stipulating in advance what that point is going to be.

If we achieve this we would be emulating the kind of thinking that large organisations are increasingly adopting in a fast-changing world. Strategic planning used to be about envisioning now where one wants to be at a certain time in the future and then developing strategies for getting there (ex ante thinking). This is giving way to ideas of strategic intent, multiple plausible scenarios, and other unattractive terminology, where the organisation confronts uncertainty and develops flexible processes for taking advantage of it without ever engaging in a form of crystal ball-gazing that locks one in.

A possibility

Imagine private courts, always operating in parallel with the public courts of inferior jurisdiction, never to their exclusion, as the engine driving the process — as the catalyst.

Before describing one possible vision of parallel private courts, bear in mind that a number of procedures, old and new, already emulate some or all of what the system might look like. Most notably, there is arbitration. Essentially, in common law jurisdictions, this is a consent-based, private, profit-driven process of imposed decision making, which allows for recourse back into the public court system by way of judicial review or appeal.

In addition, many jurisdictions have power to order the transfer of some or all of an action to arbitration, even in the absence of the parties’ consent. This power has existed since the late 19th century and is in some respects an Australian invention. As a matter of discretion, some courts have been reluctant to order referral to arbitration without consent because the consequence is to impose the costs of the arbitration on the parties when the justice system is supposed to be funded by the taxpayer to decide cases. Nevertheless, it has long existed and has re-appeared in an ADR disguise, for example in those jurisdictions where the courts can refer a matter for case appraisal without the consent of the parties. Essentially, litigants can be required to go through what may be a mini-trial and have the privilege of paying for it. Usually, any or all of the parties may challenge the case appraiser’s decision, in which event it goes to trial in the normal way (that is, it rejoins the public court system) but there may be a greater than normal costs penalty if the challenger does not beat the case appraiser’s award.

It is also relevant to observe that we have seen filing fees in Australian courts moving upwards in real terms so that litigants are slowly being drawn towards full-cost recovery. Initially the fees are paid by the plaintiff but the liability will be shifted to the defendant under the costs indemnity rule if the plaintiff wins and the defendant complies or has assets. This arises later because, rather like the under-cover privatisation of our public universities through the Higher Education Contribution Scheme and full fee-paying options, we may have a covert form of privatisation of courts but without the level of consumer sovereignty typically associated with private markets (in theory). A system of parallel private courts of inferior jurisdiction might actually offer advantages over this trend.

Imagine, then, private civil courts operating in parallel with the Magistrates and District Court. They might be local (although with information technology they might be nowhere specific at all) and they might be confined to certain kinds of matters. They would be established under legislation and there would be regulations about who might operate them. The minimum qualifications for the adjudicators would be prescribed and would require that an adjudicator be admitted to practise law in the jurisdiction or be a former judicial officer in a public court. There would be statutory obligations about natural justice, confidentiality and conflicts of interest but the private court would otherwise have control of procedures, forms and other documentation. Legal practitioners would be subject to their normal ethical responsibilities when participating as an advocate or an adjudicator in a private court. Consortia of practitioners might actually be interested in establishing private courts, as might professional bodies.

The jurisdiction of a private court is founded on consent, like commercial arbitration today, but once given there are limits on withdrawal, as with a contract. The consent might be given in a pre-existing agreement, like arbitration clauses in insurance policies and building contracts, or at the time an action is commenced. Private courts could never hear matters going above the upper civil jurisdictional limit of the District Court (or Magistrates Court where there is no intermediate court); partly because the Supreme Court will have a crucial role in supervising all courts.

A typical career of a claim might be as follows. The applicant chooses to file the claim in a private court and it is served on the respondent. The respondent may consent to the jurisdiction of the private court, rather like the traditional function of entering an appearance, or may refuse. If the latter, the case is automatically transferred to the Magistrates or District Court, as appropriate. If the respondent accepts the jurisdiction, however, the case stays in the private court but there is provision, on application by either party, for its transfer to a public court, for example on the ground of unexpected complexity or to consolidate the case with another one in the public court. The private court will never have coercive powers (the state has that monopoly) and so if an interim injunction is required the case would have to be transferred.

A case in a private court follows whatever procedure the private court offers, subject to the statutory obligations of natural justice, confidentiality and avoiding conflict of interest. The court might only offer one procedure, or it might have a range to choose from. The procedure might involve the court having inquisitorial functions, so that the court does more and the lawyers do less. This is very likely but the decision would be settled over time by market mechanisms and not by the ex ante thinking of law reformers or, worse, legal academics. After disposition, the party with the benefit of the decision can register it with the appropriate public court for enforcement through the normal methods. (The State has the monopoly over force etc.) An appeal from a decision of a private court lies to the court that would hear an appeal from an identical case in the public system. There is no difference by that stage. The Supreme Court would also have a supervisory jurisdiction, using prerogative writs or modern equivalents, to regulate the processes of the private court.

The question whether a private court should award costs needs further consideration. There is little research into the effects of the costs indemnity rule (more accurately a principle). It is probably best left to private courts to decide for themselves in the light of what would attract applicants and respondents. Obviously, like the judgment itself, a costs order could only be enforced by a public court. It would seem to follow that the public courts should have power to tax an order for costs in line with their role as courts of review.

What are the advantages of this idea and why does it meet some of the problems discussed earlier?

First, it gives incentives to people to think of new ways of doing things better without those people being judges, who are constrained in what they can say publicly and in what they can experiment with. The private court might operate at weekends or at nights. Its premises will be chosen according to what will attract litigants, as will the information and litigant support systems it operates. Its ambience, language, sensitivity to culture and so on will be set by the search to attract the litigant. It might use paper and electronic documents to minimise physical appearance anywhere. Its adjudicators will be chosen for their expertise or at least aptitude for the kinds of cases the court handles. If there are reservations about the quality or fairness of its decisions, or the way that people are treated generally, that will soon become known. Lawyers, community legal centres, industry organisations, family, friends and colleagues will soon advise applicants not to invoke, and respondents not to consent to, the jurisdiction if the private court has a poor reputation. Private courts will study patterns of refusals by defendants and look for reasons. Subject to questions of privacy, they may also study who is making claims in public courts and why they are not choosing their own services. And so on.

Secondly, it allows us to find a point on that continuum of court intervention between adversarial and inquisitorial extremes without legislating for it in advance. If we finish up close to the inquisitorial end, it is because informed choice, over time and in the light of experience, has impelled us there. We do not incur the risks and costs associated with imposed, revolutionary change.

Thirdly, it allows the wider world to adjust. New ideas would surface in the education and training of lawyers, as they are doing (slowly) because of ADR. Professional organisation and culture may have to change. For example, excessive adversarial zeal might be dampened by collective consumer preference, as measured in the choice of private courts, in a way that judges seemingly cannot bring about at present, for various reasons. The qualities we expect in adjudicators, and the expected ranks from which judges are chosen, may also mutate. All these changes will occur gradually and organically.

Fourth, it provides a laboratory that we presently lack, legitimated by the foundational consent of the participants. Public courts (Magistrates and District) will see methods that work and do not work in private courts and may adopt the appropriate ones. Their ideas about consumer- orientation may develop in fresh directions. Supreme Courts, which are above the parallel court system, may also acquire some new ideas. In effect, it provides the deliverers of civil justice with the incentive and information to become ‘learning organisations’, to borrow an expression from organisational theory and public sector management.

Some objections

Judicial independence will be compromised

At present we have constitutional or legal protection of the tenure and terms and conditions of judicial officers. The protection is less extensive and entrenched in some States and Territories than in the Commonwealth, but in all jurisdictions it is better than none. There would be absolutely no diminution of protected judicial independence in the public courts if this model of private courts were implemented. It might even be appropriate to use the occasion of legislation concerning private courts to upgrade the protection for judicial officers in the public courts.

The ultimate purpose of judicial independence is to promote impartiality of decision making. Provided there is sufficient information about private court proceedings and decisions, as relayed through the many networks that have dealings with the courts, private courts will fail if there is reason to doubt their impartiality. Provided litigants in private courts are only there because they have consented, and there is always a ‘constitutional’ alternative, the dangers are diminished but never removed. Although rights of appeal would never be curtailed, there is a risk of undetectable bias that may be greater than in the public courts. Litigants will have to decide whether to take that risk.

The discipline of public scrutiny may be removed

I am not sure whether private courts should be allowed to sit in private. Privacy might be an incentive for both parties to use them. In theory at least, the possibility of public scrutiny by spectators and the media is a further prop of impartial decision making. At the moment, the level of actual scrutiny of civil cases in inferior courts is low to the point of non-existence. On balance, informed consent to privacy should trump the publicity card.

Lawyers will lose

Litigants will only use private courts if there is an advantage in their particular situation. One very likely advantage is that while the court costs could be much higher, in order to fund the court, lawyers’ costs could be much lower. This is the logic of a move towards an inquiry model. Resources are channelled to the courts and away from the lawyers. The prospect of lawyers losing work will not keep many members of the public awake at nights, but it would not necessarily happen anyway. The volume of litigation might increase and compensate for the lower income per case. Because this too could be seen as an objection, it is my next point.

It would encourage hyperlexis

Hyperlexis is the condition or syndrome of resorting too often to litigation. The United States is said to suffer from it, chronically and acutely. The hyperlexis claim is rarely analysed in detail and has been doubted by some leading scholars who say that filing rates are no higher than one would expect, and not grossly out of line with Australia, Canada, Great Britain or New Zealand, given the respective populations and Gross Domestic Products.[3] The argumentum ad Americanum may actually be flawed at the outset.

The general response to this objection, however, is that we cannot have it all ways. We cannot complain about the barriers to litigation and then complain about ‘too much’ litigation if the barriers are lowered. In any event, as a society governed by the Rule of Law if we do not want certain kinds or levels of litigation we should deal with that openly, by removing or restricting causes of action, not by declaring that rights exist and then making it hard for the less well-off to assert or defend them.

An off-shoot of hyperlexis is what might be called frivolexis; that is, the commencement of hopeless, spurious or abusive claims, or the entry of equivalent defences. Under this proposal, if a frivolous claim is made in a private court then the respondent need only object to the jurisdiction and it goes to the public court. To the extent that public courts are presently effective to deter such claims, parallel private courts do not change the situation. As for purely tactical defences, it is up to the private courts to develop summary judgment procedures that attract applicants, within the confines of natural justice principles. (Arguably, public courts at the moment should make more use of summary judgment, through a new test that seeks to weigh the arguability of the case against the size of the claim — that is, a proportionality calculus — rather than, as at present, considering only slight arguability.) Over all, frivolexis is a problem that already needs to be addressed and private courts do not add to it.

This is a prelude to complete privatisation of civil justice

The retention of a state monopoly over justice at Supreme Court level is an essential part of the idea, along with the principles of non-abdication and monopoly on force at all levels. There is no logical reason why a domino effect should be set in motion but, because there are independently good reasons for the constitutional entrenchment in the States and Territories of the Supreme Court as a court of general and unlimited jurisdiction, it would be appropriate to take the opportunity for such entrenchment and ward off this fear.

There remains the possibility that the civil jurisdictions of Magistrates Courts and the District Court would wither away so that, de facto, there is privatisation of first instance civil justice for the majority of causes of action. If this were because of litigants’ preferences for private courts then it is not state abdication, it is citizen choice. If, however, it is because executive governments so undermine the inferior public courts that private courts are made artificially attractive by comparison then that is a problem, although possibly less of a problem than today’s creeping filing fees with no choice.

There is no minimum value for a claim in a Supreme Court, although there may be a costs penalty on a plaintiff who makes the wrong initial decision. That costs penalty might need revisiting, if these ideas were implemented, in line with the principle that Supreme Courts are fundamental to the integrity of the system, both public and private. If, however, people did start making small claims in Supreme Courts in any volume because of the running down of the public lower courts, this would bring about pressure for a revival for the inferior courts’ civil jurisdiction on efficiency grounds. Provided the Supreme Courts are inviolate, the system is self-correcting over time.

The High Court will strike down legislation permitting private courts

There is no suggestion that private courts should be invested with the judicial power of the Commonwealth. If we can have valid arbitration legislation and Rules of Court empowering compulsory arbitration and case appraisal, it is hard to see why legislation that seeks to improve upon these procedures and extend the benefits to ordinary people and small businesses should be invalid.

The development of the law would be inhibited

Courts of inferior jurisdiction do not set precedents and so there would be no change to the situation. One could appeal to a Supreme Court from private and public courts alike and thus potentially bring about a precedent. If the volume of civil litigation rises, there is more first instance decision making to fuel appeals. If anything, there would be more development of the law. If that invokes the reverse objection that there would be too much development of the law, then one returns to the counter to the hyperlexis objection.


On hearing these ideas, one might recoil in horror but it is important to end as we began. We feel beset by problems. Litigation is said to be too expensive, too slow, too uncertain, too off-putting and so on. The trouble is we have no adequate basis for assessing these claims. Something is only too expensive if we have an idea of what it should cost; too slow only if we have an idea of the appropriate pace; too formal only if we have an idea of how it should be; too intimidating if we have an idea of friendliness; and so on. We need to frame our criticisms more exactly and relate them back to some first principles about the kind of society we believe we are. The parallel private court idea offers a framework for assessing them. The parallel private court idea is as much a mirror as a proposal. It reflects the present back at us and makes us think about it more precisely: what we like, what we do not like, and what might not be so bad after all.

[*] Professor Stephen Parker is Dean of Law at Monash University.An earlier version of this paper was delivered by Professor Parker as the Martin Kriewaldt Memorial Address at the Supreme Court of the Northern Territory on 14 August 1998.© 2001 Stephen Parker (text)© 2001 Jane Cafarella (cartoon)

[1] Australian Institute of Judicial Administration, ‘Courts and the Public’, September 1998.

[2] Damaska, M.R., The Faces of Justice and State Authority: A Comparative Approach to the Legal Process, Yale University Press, 1986.

[3] See Luban, D., ‘Contingency Fees’ in S. Parker and C. Sampford (eds), Legal Ethics and Legal Practice, Oxford University Press, 1995, p.98 ff, and sources cited therein.

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