What are the advantages and disadvantages of arbitration when compared with Court litigation ?

If you have ever had your day in court, you would probably have wished you had never been a party to litigation. The incessant delays, complex procedures, lack of direct involvement and heavy costs are enough to put one off seeking justice in this manner. It would seem that a trial is a rather effective deterrent to seeking justice!

The commonly held view is that arbitration, a form of alternative dispute resolution outside the formal structure of law and court procedure, would provide a suitable alternative that was just, accessible, efficient, timely and effective. The matter is referred to a third party, either an arbitrator or a tribunal consisting of three arbitrators, who will grant an award which the parties are obliged to honour. Should a party fail to honour the award, the other party may still seek relief from the courts.

This essay will discuss some of the advantages of arbitration over court litigation which are most important to the parties and the reasons why they are so. Some of the disadvantages will also be highlighted.

Efficacy

There are two elements to efficacy in the context of arbitration : firstly as a speedy means of resolving conflict and secondly maintaining the continuity of relationship between the parties having the dispute.

Section 1 of the Arbitration Act 1996 practiced in England, Wales and Northern Ireland sets out clearly that the objective of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense. Because arbitration does not go through the inflexibility of scheduling inherent in the court system and arbitrators in principle have more flexible schedules than judges here is less likelihood of there being a delay. Parties have greater control over the timing of the arbitration proceedings.

Arbitration also leads to faster resolution because the proceedings are less formal than a court case. There is also only a limited right of appeal against arbitration awards thus ensuring that the dispute is not prolonged by a long appeal process which can mean swifter enforcement and less scope for a party to delay matters. For the parties the quicker a dispute is resolved, the faster they can focus on their core business.

Court proceedings tend to terminally rupture business relationships where the courts act as an umpire over the lawyers who dictate the intention of the parties resulting in the predominance of a boxing ring culture over a solution seeking culture. Litigation encourages a desire for vindication and public acknowledgement of a wrong suffered.
Ultimately there is one winner and one loser which is not the preferred outcome for parties having a high degree of mutuality and interdependency. Therefor parties which are very closely interlinked and want to maintain their relationship would prefer the arbitration route over court litigation.

Flexibility

Litigation is a highly formalized process with specialized rules and requires compliance by both parties failing which the court proceedings are held up. Arbitration is less formal than court proceedings and the arbitral tribunal may conduct the arbitration in such manner as it considers appropriate if the parties fail to agree on the procedure to be followed (Article 19 of the Model Law on International Commercial Arbitration).

The arbitration route allows the tribunal to adopt the inquisitorial system which involves search for the truth largely through the tribunal’s own investigations if it feels it is necessary. The advantage of the inquisitorial system is evident from the strong support for it at the level of the Small Claims Courts in the UK where arbitrators now take a more interventionist approach.1 The adversarial method of proceeding inherent in the Common Law system practiced in much of the English speaking world takes a longer time to gather evidence than the inquisitorial system.

Parties are attracted to the less formal nature of arbitration which encourages a speedier and hence less costly way of settling disputes. However, lately, arbitration has been criticised for copying court litigation and as arbitration has developed, the procedures too have become as complicated. It is hoped that the UNCITRAL Notes on Organizing Arbitral Proceedings 1996 will weed out potential problem areas.

Ability to Select Venue, Seat and Language of the Arbitration


The flexibility of arbitration extends to the freedom to choose the venue of the arbitration whether in the contract’s arbitration agreement itself or at a later stage. This decision allows parties from different legal jurisdictions and different legal systems to pick a neutral venue or a venue that is aritration-friendly or convenient for them.

The parties may also decide on the seat of the arbitration i.e. the legal jurisdiction to which the arbitration is tied. The seat dictates which national law governs the procedure. The seat of arbitration need not be in the same country as the venue, although in practice they are often the same. The seat of the arbitration is significant since it will normally determine the procedure or rules which the arbitration adopts, and the courts which exercise jurisdiction over the seat will have a supervisory role over the conduct of the arbitration. By selecting a given state as the place of arbitration, the parties place the process within the framework of that country’s mandatory national laws applicable to arbitration.

For parties of different legal jurisdictions having a single seat avoids the complications relating to conflicting laws. For example London remains one of the most popular jurisdictions for international arbitration due to the availability of fairly extensive supportive measures from the court, a lack of court intervention restricting party autonomy and a comprehensive regime in the form of the 1996 Act.

There will be certainty as to the extent by which the national court will support or intervene in the arbitral process and the extent of judicial review available to the parties. The finality of the award will also be certain and between commercial parties, finality is a priority.

Agreeing to arbitration also allows the parties to pick the language in which they would like the proceedings to be conducted. Unlike the situation where a dispute is litigated, the place of arbitration does not predetermine the language and parties can agree on the language that is most convenient.

Parties who desire more control of the setting in which the dispute is conducted as opposed to allowing the court system to determine would prefer the arbitration route.

Uniformity of the Law

As arbitration becomes an increasingly popular form of alternate dispute resolution this had led to more countries legislating laws which govern the conduct of arbitration held in that country based on the UNCITRAL Model Law on International Commercial Arbitration 1985 and the UCITRAL Arbitration Rules 1976. As a result there is growing uniformity of legislation pertaining to arbitration around the world.

Parties would feel secure knowing that the seat of arbitration that has legislation based on the Model Law would follow certain general principles outlined in the Model Law.

Enforcement of the Award

In terms of enforcement, the provisions of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention) make arbitration awards generally easier to enforce abroad than court judgments. There are more than 140 signatory states to the convention that have agreed to recognise and enforce awards made in territories of other signatory states.

Due to the international recognition and support that arbitration has achieved, there is widespread acceptance that agreements to refer disputes to arbitration should be upheld by the courts and awards enforced, regardless of the jurisdiction in which the agreements were made. The growth in cross-border commerce has made this increasingly important.

Access to the courts remain open to the party seeking relief should the other party fail to honour the valid award of the arbitrator in respect of matters referred to him in accordance with that arbitration agreement. Thus a dissatisfied party has recourse to the courts if he or she so wishes.

Costs

The complex procedures involved in court litigation means heavy legal costs which may be unsustainable for private individuals and small companies. Therefor in simple cases, the lower cost of arbitration can be an attractive inducement to these parties to arbitrate.

However it appears the new arbitration bureaucracy has replaced the old judicial bureaucracy. The time and expense of paper and face-to-face meetings unnecessarily contributes to the costs in many cases. There is a big question mark as to whether the cost of arbitration is lower than the cost of going to trial for more complex cases. Where a tribunal is involved, arbitrators’ fees can be relatively expensive. Apart from the arbitrator’s fees there are other incidental costs such as hire charges for the venue. Therefor costs may no longer be a factor to be considered by the parties in their choice to go for arbitration

Expertise and Knowledge

An arbitrator may have or members of a tribunal may consist of those who have the necessary qualifications and technical expertise to hear a case. This point carries even more weight in the case of a tribunal where parties are allowed to name an arbitrator of their choice, preferably one who has intrinsic knowledge of the case at hand. In litigation a judge may not necessarily understand the complexities involved in a shipping case for example. Furthermore in courts below the appellate level, judges sit alone which may further exacerbate the situation where specialist knowledge is required. Parties may come out of the courtroom feeling they may not have had a fair trial because of this.

The importance of arbitration is evident in the maritime and construction sectors where it is common, if not standard practice for commercial contracts to contain express clauses referring any future disputes to arbitration.

Privacy and confidentiality

There is an implied right of privacy in the arbitration process keeping matters private between the parties involved. The advantage over litigation which is a wholly public affair is that firstly outsiders do not get access to any potentially sensitive information and secondly the parties to the arbitration do not run the risk of any damaging publicity arising out of reports of the proceedings.

However in a recent Court of Appeal decision in England (Emmott v Michael Wilson & Partners Limited [2008]), the court acknowledged that parties to arbitration in England may generally be allowed, and may even be required, to disclose details of the arbitration where:

a.) Parties to the arbitration expressly or impliedly consent;
b.) Disclosure is reasonably necessary to protect legitimate interests of an arbitrating party (including requirements of public reporting, fiduciary obligations, auditing requirements, disclosures to insurers and disclosure in court applications);
c) A court permits disclosure (by order or leave); or
d) The interests of justice require disclosure and (perhaps) where public interest requires disclosure. 2

Disadvantages of arbitration over litigation

Subject Matter Not Capable of Settlement

The subject matter of the dispute is not capable of settlement by arbitration under the law of the relevant state e.g. criminal matters or matters of public law an example of this would be intellectual property rights. In some disputes, parts of claims may be arbitrable and other parts not. For example, in a dispute over patent infringement, a determination of whether a patent has been infringed could be adjudicated upon by an arbitration tribunal, but the validity of a patent could not as patents are subject to a system of public registration. An arbitral panel would have no power to order the relevant body to rectify any patent registration based upon its determination

Additionally an arbitrator may not have the power to grant remedies that a court can. There is support for the view that a court will refuse to stay proceedings in support of arbitration if the arbitrator cannot award the remedy claimed. In the case of Hashim bin Majid v. Param Cumaraswamy, an application to stay court proceedings was refused on the grounds that one of the remedies claimed by the plaintiff was a dissolution of the partnership and the court was of the view that this was not an issue that could be decided by an arbitrator.3

Award Not Necessarily Based on Rules of Law

An arbitrator may make an award based upon broad principles of “justice” and “equity” and not necessarily on rules of law or evidence. There is also the danger of unknown bias and competency of the arbitrator unless the arbitration agreement set up the qualifications or the organization that administers the arbitration, has pre-qualified the arbitrator.

Lack of Precedents

Since arbitration decisions are not public there is a lack of access to precedents on previous arbitration decisions. Additionally unlike litigation, the stare decisis rule does not apply. These two factors contribute to less certainty by the parties on the outcome of arbitration.

Non Adherence to Court Rules and Rules of Evidence

When the rules are not strictly adhered to this may lead to the cases where certain evidence may be admitted (for example hearsay) which is strictly not allowed in litigation due to the unavailability of cross-examination to test the accuracy of the statement.

Conclusion

Choosing which course of action to pursuit differs from one case to another. Essentially the most important factors are that arbitration offers a self help route in settling disputes outside the court system where the parties are in greater control over the proceedings.

Generally arbitration is a more efficient, less procedural and cheaper route to solving disputes although this may not necessarily be the case as arbitral proceedings become more complex.

The advantages of arbitration are more evident in cases where expertise in a certain area are required. Parties who want to maintain a harmonious relationship and who wish to have their dispute out of the public eye would also prefer the arbitration route.



































1J.Baldwin, ‘Litigants’ Experiences of Adjudication in the County Courts’, 18 Civil Justice Quarterly, January 1999, pp. 12-40 at 20.

2M.Sindler, ‘Litigation, dispute resolution and arbitration: Privacy matters’, Legal Week, July 2008.

3Hashim bin Majid v Param Cumaraswamy (1993) 2 Malayan Law Journal 20.

Vocabulary Coach II

14. craven - cowardly

The craven act of assaulting his lover by making anonymous threatening phone calls landed him in prison.

15. churlish - rude in a mean spirited, surly way

Her churlish behaviour got her in trouble with the school principal.

16. surly - bad tempered and unfriendly

17. disquieting - causing anxiety/uneasiness

18. consternation - feelings of anxiety or dismay, typically at something unexpected

19. jejune - naive, simplistic

20. oblate - a person dedicated to a religious life, but typically having not taken full monastic vows

Resulting Trusts and Constructive Trusts

Like a constructive trust, a resulting trust arises by operation of law, although unlike a constructive trust, it gives effect to intention - Justin Santiago

Both constructive and resulting trusts differentiate themselves from express trust which arises because a right-holder has manifested an intention that a trust come into existence. In the case of constructive and resulting trusts the intentions are not expressly stated.

This statement in this question is derived from Lord Browne-Wilkinson's judgement in Westdeustsche Landesbank Girozentrale v Islington LBC (1996) where his view was that all resulting trusts arise because of a presumption that the transferor intended to create a trust for himself. This statement supports the argument that resulting trusts are the result of an intention not to create a trust. This thinking is also reflected in the Privy Council case of Air Jamaica v Charlton 1999, where Lord Millet said: “But [a resulting trust] arises whether or not the transferor intended to retain a beneficial interest - he almost always does not - since it responds to the absence of any intention on his part to pass a beneficial interest to the recipient.”

This argument was put forward in the recent theses of Birks-Chambers that the the key to the resulting trust was not the intention to create a trust, but the intention of the donor not to benefit the recipient.

The statement by Lord Browne-Wilkinson however shows a flawed approach at looking at intention by means of deducing a presumed intention. To presume an intention would be going against the fundamentals of trust. To create a trust the intention must be manifested or expressed and the the courts have placed increasing importance on the intention of the parties when determining whether there is a trust or not. The perceived artificiality of presumed intentions in the resulting trust doctrine has led courts to move away from it affirmed by the House of Lords in Stack v Dowden [2007] UKHL 17; [2007] A.C. 432.

The use of the term "resulting trust" in such a case is a misnomer in itself. The orthodox theory of resulting trusts contained in Vandervell v IRC states that where it was said that the beneficial interest must belong to or be held for somebody; so if there was an evidential gap in this respect it was not to belong to the donee or be held in trust by him for somebody, it must remain with the donor. However such a notion is false as an equitable interest arises only at the point where the trust arises. It must be questioned whether there is such a thing as a beneficial interest that can be retained. Beneficial interests are created in the hands of the beneficiary who holds the trustee to account for his exercise of those rights : DKLR Holding Co (No 2) Ltd v Commissioner of Stamp Duties. There is therefore no retention of anything.

The argument of Birks and Chambers, that the fact “presumed” in such circumstances is that the transferor did not intend to benefit the transferee, was shown to be based on a number of misunderstandings. First, gratuitous transfers outside the relationships of advancement are not “apparent gifts”, only ambiguous transfers. Secondly, suspicions are not the same things as presumptions, and in any case, equity is not “suspicious” of gifts. Thirdly, it is not possible for equity to “presume” that “apparent” gifts are not gifts, for “not-gift” is at best a legal conclusion from proved facts, not a fact in itself. Fourthly, a “presumption” of “not-gift” cannot be a “presumption” of “non-beneficial transfer” for the law does not recognise a notion of non-beneficial ransfer distinct from transfers on declared trusts or as security. And fifthly, no satisfactory explanation was given as to why, assuming there is such a thing as a “non-beneficial transfer”, the law should respond to its “proof” by the raising of a trust for the transferor. For these reasons, the argument that there should, by a logical extension of the traditional resulting trusts, be resulting trusts in the generality of cases of unjust enrichment is unsustainable.

Constructive trusts on the other hand might be regarded as an approach based on outcomes and result rather than principle or sound theory, as indicated by the statement of Sir Peter Millett (in (1995) Trust Law International, 35) that ‘... the language of constructive trust has become such a fertile source of confusion that it would be better if it were abandoned’. While not all reaction has been so extreme, much academic and judicial commentary has advocated restraint in the employment of the constructive trusts as a panacea for lack of a clear intention to establish a trust and the need for certainty.

Constructive trusts arise by operation of law and is imposed by the court as a result of the conduct of the trustee and therefore arises quite independently of the intention of any of the parties. The types of constructive trust :-

a. Constructive trusts arising on a specifically enforeceable contract for the sale of a title to land or known as Vendor – Purchaser Constructive Trust by William Swadling

The moment you have a valid contract for sale the vendor becomes in equity a trustee for the purchaser of the estate sold and the beneficial ownership passes to the purchaser. There must be a valid contract of sale and and the contract must be one of which a court of equity will grant specific performance.

b. Constructive trusts arising when equity perfects an imperfect gift – donor done everything within his power to make the gift of perfect.

Mac Rules

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Article 226

Discuss the effectiveness of Article 226 procedure in ensuring compliance of Community law on the part of Member States. - Justin Santiago

Article 226 enables the Commission to take action against Member States which the Commission believes to be in breach of Community law and to ensure that Member States comply with their Community law obligations and procedures. Article 226 provides that if the Commission considers that a Member State has failed to fulfill an obligation under the Treaty, it shall deliver a reasoned opinion on the matter after giving the State concerned the opportunity to submit its observations.This will result in a Declaration by the court to that effect. Article 228 was introduced to add a financial penalty to ensure Member States complied with Article 226 judgements. Art 228 is a separate action to impose fines to have a further deterrent effect depending on the seriousness of the breach and duration of the breach.

The advantages of proceedings under Article 226 are that the ECJ will pronounce directly on the compatibility of a Member State’s conduct with Community law compared to a preliminary reference from a national court under Article 234 where the ECJ will only give a ruling on the interpretation of Community law leaving it for the national court to spell out the implications of that ruling in the particular case.

The Commission initiates Article 226 proceedings either in response to a complaint from someone in a Member State or on its own initiative. Complaints are brought on the basis of information gained from diverse sources – through the press, from European Parliament questions or petitions or increasingly through the modern technological sources such as databases indicating when Member States have failed to notify their implementation of a directive. In the last 10 to 15 years complaints from citizens constitute a significant source for the detection of infringements and has suggested that this contributes towards a creating a more participatory Community in which citizens can play a role in law enforcement. However the individual has no say in determining whether or not the Commission actually initiates proceedings against a Member State : Star Fruit v Commission – Commission was not bound to take action but had a discretion also Commission had a right but not a duty to initiate proceedings before the ECJ following non-compliance with the reasoned opinion.

The most common reason for an Art 226 action is the non implementation, faulty implementation or non-application of secondary legislation. Very often it is the non-implementation of a directive within the allotted time limit. Directives need to be implemented by a certain date. The State is liable whichever of its organs is responsible for the breach and regardless of the internal division of powers between constitutional authorities and liable for the conduct of public agencies even if they are constitutionally independent : Commission v Ireland (Buy Irish).

The Commission often refers to the Member State’s obligation of sincere co-operation under Art 10 EC to underpin an action under Art 226. The Commission has absolute discretion on whether to start the Art 226 EC procedure and as to whether to take a case to the ECJ : Commission v Belgium. However the decision not to make a reasoned opinion and the decision not to submit a case to the ECJ have been held to be not reviewable under Art 230 EC as they are not acts that have legal effects : Alfons Lutticke. Additionally the discretion of the Commission to bring proceedings under Article 226 is excessively arbitrary.

The Art 226 procedure is intended to reach a negotiated settlement.Its informal administrative stage without recourse to a court enables many breaches to be resolved by friendly negotiations. This stage ends with the Commission issuing a reasoned opinion which forms the bases of the judicial stage of the proceedings before the ECJ. However this can be a long process and although an application for an interim measure under Article 234 can be made it must be established :-

1. There is a matter of urgency
2. There are factual and legal grounds to raise a prima facie justification for the interim measure

The effectiveness of an Art 226 action is diminished by the length of time the process takes and the lack of a serious penalty. The only result of a finding by the ECJ under Art 226 is that the Member State is in breach is a declaration to that effect. The Member State can continue to avoid complying with Community law obligations. Although documents related to the infringement proceedings is available a major source of frustration is difficulty in obtaining access to documents related to infringement proceedings.

The Commission does not have enough resources to bring enforcement proceedings against member states under Article 226. By introducing the concept of direct effect of EC law as well as indirect effect or in action for damages on the basis of the state liability doctrine, the ECJ enabled individuals and companies throughout the EU to become enforcers of Community law in the Member States without the need for Commission involvement.

There are also limited defences :-

1. Reciprocity

Argument of reciprocity was not applicable in the context of Community law as it was a new legal order which was not limited to creating reciprocal obligations as under international law.

2. Other Member States in breach

Grounds have been pleaded numerous time by Member States without success C266/03 – Commission v Luxembourg

3. Force majeur

Difficulties in parliamentary procedures or problems with the separation of powers within their systems to explain delay in compliance with EC law – rejected by the ECJ. However could be pleased where a bomb attack presented insurmountable difficulties rendering compliance with the Treaty impossible : Case 33/69 Commission v Italy (Re Transport Statistics) – data processing centre had been bombed however ECJ held that “time will erode the validity of the excuse.”

4. Internal difficulties

Internal difficulties not the Commission’s concern : C128/78 Commission v UK (tachographs)

5. Non-applicability of the offending law

C167/73 Commission v France (French Merchant Seamen) – rule in French code maritime was not enforced in practice against EU nationals but was not accepted because it gave rise to uncertainty about legal rights.

6. Community measure is illegal

C226/87 Commission v Greece – defence rejected because the appropriate remedy within the system of remedies set up by the Treaty was an action for judicial review under Art 230 EC.

7. Adequate implementation of the relevant community law by administrative measures

C29/84 Commission v Germany (Re Nursing Directives) – administrative measures widely publicized and not easily subject to alteration

8. Protection of fundamental human rights

Case 112/00 Schmidberger v Austria – freedom of expression and freedom of assemble were fundamental human rights guaranteed by the ECHR which are to be protected by the EC according to the TEU and hence the action by the claimant whose business of transporting goods was hampered by a demonstration failed.

Breach of Contract and Damages

What is a Breach of Contract

A failure to perform a contract in accordance with the terms of the contract is a breach of contract, which will entitle the other party to the contract to an appropriate remedy.

A breach of contract is one of the four principal ways in which a contract can be discharged the others being discharge by performance, by agreement and by operation of law.

Consequences of Breach of Contract

There are three principal consequences of a breach of contract :-

1. The innocent part is entitled to recover damages in respect of the loss which he/she has suffered as a result of the breach
2. The party in breach may be unable to sue to enforce the innocent party's obligation under the contract
3. The breach may entitle the innocent party to terminate further performance of the contract

Every breach of a valid and enforceable contract gives to the innocent party a right to recover damages in respect of the loss suffered as a result of the breach. An action for damages lies whether the term which is broken is a condition, a warranty or an innonimate term.

Therefor the first step is in determining whether it was a term. The courts have adopted an an objective approach and several criteria have been adopted according to Heilbut, Symons & Co v Buckleton :-
verificiation, importance, special knowledge and time statement was made.

Verification

A statement is unlikely to be a term of the contract if the maker of the statement asks the other party to verify its truth : Ecay v Godfrey.

Importance

The more important the matter, the greater the likelihood that the parties intended it to be a term.

Special Knowledge

If the person making the statement has some special knowledge or skill compared to the other party, the statement may be held to be a term : Oscar Chess Ltd v Williams.

Time Statement Was Made

If a statement was made near or at a time the contract was made, it is more likely to be a term : Routledge v McKay.

The next step would be to determine whether the term was a condition, warranty or inonimate term.

A term classified as a condition would enable the injured party to either terminate the performance of the contract and claim for damages or perform the contract despite the breach and recover damages instead : Poussard v Spiers. The exercise of the right to terminate the performance of the contract discharges the primary obligations of both parties for the future and imposes on the party in breach, by way of substitution, an anticipatory secondary obligation to pay damages to the innocent party.

A breach of warranty will only give the injured party the right to claim damages, the performance of the contract cannot be terminated : Bettini v Gye. This is in actual fact the secondary obligation to pay damages a s a result of the breach created.

A breach of an inonimate term could result in one of two things depending on the consequences of a breach. If a breach of the term results in severe loss and damage, the injured party will be entitled to terminate the performance of the contract and parties will treat themselves as being discharged from the contract (prospective only). If the breach involves minor loss, the injured party’s remedies will be restricted to damages.

The aim of an award for damages is to compensate the claimant for the loss which he has suffered as a result of the defendant's breach of contract.

A claimant could claim compensation on a number of grounds which will be determined by the amount of damages which a claimant can recover by way of compensation:-

1. Expectation interest - to put the claimant in the position which he/she would have been in had the contract been performed according to the terms.
2. Reliance interest - to put the claimant in the position he/she would have been in had he/she not entered into the contract.
3. Restitution interest - restore the benefit to the claimant which he/she had conferred upon the seller however the claimaint must establish that the defendant was enriched, that the enrichment was at the claimant's expense and that it was unjust that the defendant retain the benefit without recompensing the claimant.

The courts have come up with a number of doctrines that need to be fulfilled in order for the claimant to claim by way of expectation interest :-

Mitigation

A claimant is under a duty to take all reasonable steps to mitigate his loss ad the claimant must not unreasonable incur expense subsequent to the breach of contract.

Remoteness

A claimant's expectation interest will not be fully protected where some of the loss which he has suffered is too remote a consequence of the defendant's breach of contract - losses that occur naturally or as a result of the usual course of things or were within the reasonable contemplation of both parties ad the time the contract was made.

Causation

A claimant can only recover damages in respect of the losses if there is a casual link between the loss and defendant's breach of contract.

Quantifying the Damage

It was established in Johnson v Agnew that damages are to be assessed as at the date of breach. But, where the claimant is unaware of the breach, damages will generally be assessed as at the date of on which the claimant, could with reasonable diligence, have discovered the breach.

Damages are generally assessed by reference to the market value of the promised contractual performance; that it to say, the claimant's loss is objetviely assessed. It has however also been recognised in Ruxley Electronics and Construction Ltd v Forsyth that the defendant was entitled to loss of amenity damages and the concept of 'consumer surplus' - claimant's subjective valuation of the contractual performance, which may be considered more than the market value - be considered.

Bill of Rights

The constitutional implications of a British bill of rights. - Justin Santiago

A bill of rights would be likened to a written constitution outlining the positive rights of individuals and private citizens. It details the rights people have with regards to treatment from the State and remedies/protection available. A bill of rights would be likened to a form of law superior to other laws because it originates in an authority higher than the legislature which makes ordinary law and which can only be changed by special procedures. An example of this is the Constitution of the United States which requires not only the approval of Congress but also the the co-operation of other outside bodies (three-fourths of the States need to be in agreement – i.e. 38 of the 50 States have to be in favour of the amendment).

A bill of rights would have several constitutional implications :-

In the United Kingdom, where Parliament is supreme and may create any law that it pleases (by a simple majority vote in
Parliament), the bill of rights could always be amended or repealed by legislature in exactly the same way as any other ordinary Act of Parliament. A bill of rights would go against the doctrine of parliamentary sovereignty and would bind the UK in a way that it may not want.

A bill of rights may not be as flexible as the current situation with its extensive use of conventions which can change over time for example the convention that a Prime Minister has to be chosen from the party with a majority in the House of Commons has come about with the increasing importance of electoral representation in the highest seat in government. It allows for flexibility so that laws and rights move with the times and human rights can become more protected with time. The concept of entrenchment does not exist so these laws in turn do not bind future parliaments thus allowing even more flexibility. There has been a move towards subjecting political processes and decisions to formal hard law regulation that is enforceable by the courts – judicialization – and giving some level of rigidity to positive rights.

A bill of rights would also necessitate a Supreme Court to strike down any law that is in conflict with the Constitution. This would place the doctrine of separation of powers on a firmer footing in the UK. The Executive too would not be able to impinge on the independence of the judiciary. The view propounded by Lord Woolf was that “There was a growing encroachment by the government on judicial independence, warning that judges may need a written constitution to protect themselves from further political interference. This is to ensure that the judiciary can uphold the Rule of Law, prevent government from abusing its powers and to be independent from the government.”