THE CITY

For the average punter the name Derry Irvine is synonymous with one thing: wallpaper.


But mention the name of our venerable and unelected Lord Chancellor to the average litigation lawyer in the City and the first thing they are likely to think of is the Commercial Court.
For many senior City litigators, this bout of word association is likely to be followed by jets of steam spurting out of an enraged purple face. Why? According to top-notch City litigators and High Court judges the Commercial Court – the UK’s premier legal venue where multinationals battle for cash – is a ‘disgrace’, a ‘slum’ and something Irvine has been paying lip service to improving for years, but done nothing about.

The Commercial Court is part of the Queen’s Bench Division of the High Court and is where the largest commercial disputes in the UK are heard by expert judges.

Unfortunately, its current accommodation – split between St Dunstan’s House and various sites within the Royal Courts of Justice – is inadequate. At St Dunstan’s House the courts are so small that often case participants cannot find room alongside the documents. Its toilets have been described as slums and one High Court judge has publicly slammed the building as a disgrace.

So far the Lord Chancellor’s response to the Commercial Court malaise has been to publicly shake his empty housekeeping jar at the City with a cry of ‘look, no cash!’
Irvine has committed, in principle, to building a new Commercial Court and in 2000 commissioned accountancy firm Ernst & Young to write a paper outlining funding solutions.
One, introducing a 2,100-a-day users’ fee for the court’s multinational litigators, seemed feasible but was roundly rejected by the Lord Chancellor’s Department (LCD) for fear that clients would take their claims to other jurisdictions. No other funding possibility emerged and the project was shelved.

The LCD and City lawyers then waited for the Government’s 2002 three-year spending review. The LCD received 12.6bn to spend but most of the money was earmarked for improvements to the criminal justice system with nothing dedicated to the Commercial Court.

The Lord Chancellor has now scheduled another “look, no cash!” meeting for the end of this month with a select group of judges, City lawyers and the Corporation of London. Insiders predict a new building will cost at least 59m and the Lord Chancellor is likely to unveil a severe funding shortfall.

Having already rejected the idea of a court users’ fee the Lord Chancellor is likely to explore inviting private investment into the Commercial Court project.

One option attractive to an increasing amount of City lawyers is a Private Finance Initiative, where the Government Court Service would contract a private company to build and run a new court and then lease it back at rates high enough for the contractor to make a profit.
This raises many ethical questions, such as whether a private contractor, itself a potential litigator in the Commercial Court, should be allowed a financial interest in the building.

The debate is returning squarely to that of introducing a users’ fee. Master of the Rolls Lord Philips is in favour of this, as is one of his predecessors Lord Donaldson, and their voices are likely to be highly influential in LCD circles. After all, if, as City lawyers like to think, multinational companies see our Commercial Court as top of the range in a Rolls Royce legal system, why only charge them minicab rates for a ride?

naomi.rovnick@thelawyer.com