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Report No. 188

Chapter III

"Commercial Courts" in UK, USA and Twelve other Countries we shall refer to the classification of Courts as 'Commercial Courts'

in UK, USA and other countries.

(I) U.K.:

It is interesting to trace the history of the origin of the 'Commercial Courts' in the United Kingdom. (See Mr. Lawrence, 'The True Begetter of English Commercial Courts, (1994) Vol. 110, Law Quarterly Review, p.292) The credit for establishment of the commercial courts in England can be traced to what Lawrence J (humorously called 'Long John') did in Rose vs. Bank of Australia in 1891.

The learned Judge had no grounding in commercial law and, in fact, his appointment to the High Court, which is said to have been made because of his leaning towards the Conservative Party, was a surprise to Lawrence himself. While he was expecting to become a County Court Judge, he was, it appears, "mistakenly" offered a High Court Judge's position and the following account thereof by Gilchrist Gibb Mexander in 'The Temple of the Nineties' (1938) (pp 229-331) is very interesting. He states that doubts are

"even greater how (i.e. even greater than that of Mr. Darling's appointment) his name had gone up when long John Lawrence was appointed. It is said that he had modestly hoped for a County Court Judgeship and that when, by mistake, a High Court Judgeship was offered to him, he was so overwhelmed that he went to an old friend in the profession and asked his advice. 'Take it by all means" said his friend. 'But - Can I do it?'.... 'Do it' answered his friend. In Rowing Blue Language he added, 'Keep your ears open and your mouth shut and you will do all right'. "Long John" rigidly followed this advice".

What Lawrence J did ultimately while deciding Rose is equally interesting. The case related to law of insurance concerning "general average contribution from cargo-owners" based on a complicated adjustment by adjusters in the city of London. Lawrence J was certainly no specialist in general average, neither at the bar nor on the bench. Rose was argued for 22 days in May 1891 and judgment was 'reserved' and delivered six months later on Nov. 12, 1891 after Counsel reminded the Judge about the non-delivery of the judgment. Scrutton L J had appeared as a lawyer in the case and he narrated before the Cambridge University Law Society in Nov. 1920, about the manner in which Lawrence J gave judgment in Rose: (see Scrutton, 'The Works of the Commercial Courts' (1923) C LJ 6 at p 14).

"Six months after the judgment was reserved, Counsel timidly took their courage in both hands, and went to ask whether his Lordship would be able to give the results of his consideration shortly. And he said he would. He came into Court, and he said this was a case raising questions of general average. 'The first question was. 'What was the first question, Mr. Cohen?' Mr. Cohen told him what the first question was. He said:

'Yes, I agree with the average stater'. 'And the second question, 'Mr. Barnes, what exactly was it?' And so with the third question, he said 'I agree with the average stater; judgment for the plaintiff.'...The various businessmen concerned said: 'What is this system you are offering us? Let us have Judges who understand our dispute. We have no desire to bring our case on as a means of educating people who have never heard of the matter involved before'.

When the case in Rose went in appeal to the Court of Appeal, Lord Esher stated:

"This has been a significantly troublesome case anyway. If any body ought to be paid commission, I think it is the Court' and the judgment of Lawrence J was reversed. On further appeal (see 1894 A.C. 687) the House of Lords partly modified the judgment of the Court of Appeal.

The offshoot of Rose was a resolution of the Council of Judges on June 17, 1892, to the effect that there should be a 'commercial court for London cases' arising from the ordinary transactions of merchants and traders in the city of London. They were established in 1885 and the first commercial cause was argued before Mathew J as the Commercial Judge on March 1, 1895 concerning a claim for an account by a Flemish cloth manufacturer against their London agent. (1895) 1 Com Case IX.

The establishment of 26the commercial court was one of the most successful and enduring judicial experiments, implemented without legislation or government assistance, to the enormous benefit of the city of London and the international community (See also 'The Origin of the Commercial Court' (1944) Law Quarterly Review, 324).

As is the case with all reforms, objections were raised even in England in regard to the formation of a separate Commercial Division in the High Court. In fact, in the resolution of the English Judges dated 17th June, 1892, it is stated that five out of twenty Judges, namely Lord Justice Coleridge LCJ, Denman, Hawkins, Day and Grantham JJ dissented. At the late stage of his judicial career, Lord Coleridge, one of the dissenting Judges, was more than content, in the words of his obituarant, 'to let things slide, to take no great trouble, and to find more pleasure in his favourite authors than in the reports and benches of his Court'. (The Times, June 15, 1894).

The Commercial Court which came to be established in UK in the above manner in 1895 continues still to be part of the Queen's Bench Division in the High Court. In the beginning, it was so designated by a resolution of the Judges. However, in 1970, by statute the 'Commercial Court' was recognized as a Division of the High Court. This was done under the Administration of Justice Act, 1970 (see 3(1)). This Act is now replaced by the Administration of Justice Act, 1981.

The first Judge in the English Commercial Court, Mathew J envisaged the establishment of a special court with a simple procedure which might be better to meet the requirement of the commercial community, and thus avoid unnecessary delay and inconvenience and the greater expense of the ordinary procedure (see Barry vs. Peruvian Corp. Ltd. (1896)(1) QB 208 (CA) per Lord Ester and an article in (1902) 46 Sol Jo 644).

The Commercial Court in UK sought to adapt its procedure to the continually changing needs of the commercial community. For this purpose, a Commercial Court Users Liaison Committee was formed to provide for a flow of information and suggestions between the Court and those who appear there, either as litigants or as their professional advisers. (see Practice Notice 1908 (1) All ER 399. This Committee has been replaced by the Commercial Court Committee, to which representations may be addressed through its Secretary at the Royal Courts of Justice. (see Halsbury's Laws of England, Vol. 37, Practice and Procedure, para 591, footnote 1).

Halsbury's Laws of England points out (para 591, Vol. 37) that under section 6 of the Administration of Justice Act, 1981, the Judges of the Commercial Court are such of the puisne Judges of the High Court as the Lord Chancellor may, from time to time, nominate, to be commercial Judges. The purpose of the Commercial Court is to provide for the mercantile community a simplified procedure with briefer pleadings and more expeditious hearings and trials before experienced Judges in commercial actions. Special provisions for commercial actions in the Queen's Bench Division was made in the rules of the Supreme Court (RSC Order 72) since replaced by the Civil Procedure Rules (CPR).

Proposals for Constitution of Hitech Fast Track Commercial Divisions in High Courts Back

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