Things are afoot in arbitration as well. What is shortly to happen is all about getting the loser to pay what is ordered by the judge or arbitrator. Let me explain by example.
A pal of mine is a QS. He did some work for a firm of architects, or rather a one-man practice. The architect did not pay the fees, so the QS issued a county court summons. There was the usual maypole dancing all the way to court. There, the judge gave judgment for the fees. Hurrah, said the winner. Not so, the loser; he politely told the QS that he would rather go to jail than pay up. Three years later, the debtor is still ducking and diving, still has not satisfied the judgment.
By now, the so-called winner is cheesed off. "What's the use of a court system if the loser can't be made to pay?" The same thing can happen in arbitration. It is no good waving an arbitrator's award in the air in victory. If the loser will not pay up, you have to seek something called "enforcement" in the courts.
So, the folk who have the power to make changes have come up with some ideas. They want to streamline something called the "oral examination of a judgment debtor". Part of the idea is to imprison him if he does not pay.
Go back to the QS versus architect case. Currently, the system allows the winner to use a bailiff or bankruptcy order, or a charging order, or something called a garnishee order. But they are not always the most effective approach. Alternatively, the QS could call on the architect to appear in court before a district judge for this oral examination.
Penetrating questions are asked of the debtor as to his wherewithal, but the information gleaned is often incomplete or inaccurate, and the outcome is frequently unsatisfactory. Some debtors do not turn up, and some are mischievous if they do.
Hurrah, said the winner. Not so the loser; he politely told the winner that he would rather go to jail than pay up
The ideas being floated include holding the oral examination as soon as the trial is complete. There and then, the loser would be asked about his intentions to pay any sums due. At this point, the judge would be entitled to make an order compelling external sources to provide what is today private information. For example, the Driver Vehicle Licensing Agency could be ordered to give information about vehicle ownership; the Inland Revenue could list earned income; banks, building societies and the Department of Social Security could also be contacted. Similarly, landlords, mortgage lenders, credit reference agencies, trade suppliers and trade creditors could be ordered to give information. The so-called winner could then decide how best to get at the revealed assets.
Of course, the debtor still has to give information, too, and will be ordered to do so by the court. If he ducks and dives, or ignores the court, he will be imprisoned ... for failing to give the information. That power has always been with the court – it is the remedy for contempt. Imprisonment arising out of oral examination is rare. It is to be made easier.
If the court learns that the debtor could pay but will not, and getting hands on the money is difficult, there are some new ideas in the wind. Some say the debtor's passport should be confiscated, a bar put on his future credit, tax concessions or driving licence withdrawn, or his ability to reclaim VAT taken away. All these could apply to companies, too. And company liability could be converted to personal director liability for "won't pay" behaviour.
The most effective suggestions seem to be getting information from external sources. The snag is the European Convention on Human Rights which demands that: "Everyone has the right to respect for his private and family life, his home and his correspondence, and there will be no interference by any public authority with those rights." Yes, yes, that's as may be … try telling that to my QS pal.
If you have any bright ideas on enforcement, e-mail the Lord Chancellor's Department at: consult.response-lcdhq@ btinternet.com by 30 July.
Postscript
Tony Bingham is a barrister and arbitrator specialising in construction.
