Lecture

• Author: The Rt Hon Sir Jack BEATSON FBA Lord Justice of Appeal, England and Wales (2013–2018); Rouse Ball Professor of English Law, University of Cambridge (1994–2003); Law Commissioner for England and Wales (1989–1994).
• Publication year: 2019
• Citation: (2019) 31 SAcLJ 51
• Published date: 01 December 2019
• Date: 01 December 2019

I. Introduction

1 I am honoured and delighted that the Singapore Academy of Law invited me to speak on this topic. It is almost 24 years since I left the Law Commission of England and Wales1 (hereafter “the Law Commission”) after five years as a law commissioner. Although some of what I will say about the challenges to systematic and relevant law reform that arise from changing external priorities and shorter timescales is based on my own experience, I do not believe that it is only of historical interest.

2 Part of what I say today is based on my chapter in Fifty Years of the Law Commissions: The Dynamics of Law Reform, edited by Matthew Dyson, James Lee, and Shona Wilson Stark and published by Hart in 2016.2 But I will first say something about the respective roles of law commissions and appellate courts, in particular those at the top of the hierarchical pyramid in reforming and developing private law. When is it appropriate for courts to develop and reform an area and what areas should they leave to be reformed by statute? Has the answer to this question been affected by the challenges that have faced the reform of private law by legislation following a law commission study and report?

3 I will consider this by reference to two areas in which in 2016 and 2018 there has been important court-led doctrinal development by the UK Supreme Court, and a third area in which there have been ebbs and flows in the approach of courts, but no call for legislation. The two areas are the private law consequences of illegal transactions and the effect of contractual “no oral variation” clauses. The third area concerns the nature of the task of the courts in interpreting and construing contracts, taking the latter term “construction” to include to some degree and at a high level of abstraction the process of implying terms to fill gaps.

4 The important recent court-led doctrinal developments were the 2016 decision in Patel v Mirza3 adopting a new “flexible structured approach” to illegality, and that in MWB Business Exchange Centres Ltd v Rock Advertising Ltd4 (“Rock”) in 2018, deciding that “no oral variation” clauses in a contract are binding in English law. On interpretation and construction, and on illegality, the approach of the UK Supreme Court and that of the Singapore Court of Appeal has differed. The difference, both as to approach and as to whether it is appropriate for courts to develop and reform an area, is now starker in the case of illegality because, in January 2018, in Ochroid Trading Ltd v Chua Siok Lui5 (“Ochroid Trading”), the Singapore Court of Appeal chose a different path to that chosen by the majority in Patel v Mirza.

5 I will first say something general about the different “needs” for law reform by independent agencies for law reform such as law commissions, royal commissions, and inquiries by panels and individuals. To set the scene for a consideration of when it is appropriate for courts to develop and reform an area when reform should be left to legislation following a report by such a body, I will briefly consider two House of Lords decisions on restitution which were decided at a time the Law Commission was considering the supposed common law rule generally precluding the recovery of money paid under a mistake of law and the decisions on illegality, interpretation of contracts, and the effect of “no oral variation” clauses. I will then summarise the advantages and disadvantages of court-led reform and legislation, consider whether the fundamentals of the law commission method remain sound and the difficulties that arise from changing priorities and shorter timescales, and draw the threads together.

II. Reasons for law reform

6 Notwithstanding the famous statement “Reform, reform; aren't things bad enough?”,6 it is surely not controversial to want to keep the law up to date to serve the needs of society. The issue is how to do it. There are different “needs”. One, now typically undertaken in many common law countries by a law commission, is for a body which is capable of taking a long-term and informed view when reviewing law and making proposals to modernise it. Such a body should be responsive to public needs but should not be buffeted by fashion and political pressure. It should be concerned with ensuring that the law is principled and coherent, but also practical. It must be able to examine whether technical areas which may seem as dry as dust to the political and administrative classes are in fact “fit for purpose” in the modern world or whether they harbour a latent legal crisis. It should also be able to prepare recommendations for legislative steps towards codification of an area. In principle it should be capable of taking on large and ambitious projects with social implications.

7 A second “need” is for a mechanism for dealing with legal crises and defects which need to be addressed urgently. This is sometimes done by single-issue inquiries led by a judge or other public figure but can also sometimes be appropriately undertaken by a law commission. Such inquiries often involve issues of social policy as well as technical law: see the Leveson inquiry into the culture, practices and ethics of the press, and those into the Mid-Staffordshire Hospital, contaminated blood and blood products, and bailiff law.7

8 The third “need” is for a body which can try to make our statute law more accessible and accurate. In England and Wales, the text of important statutes is not up to date on the statute law database. For example, when I consulted it the autumn of 2014 in connection with a case before me, amendments made by the Finance Act 20058 to the Value Added Tax Act 19949 had not yet been made to the text displayed.10 In his Scarman lecture, Sir Geoffrey Palmer stated that

“it would be appropriate to redesign and reform the way statutes are made and promulgated to the public”.11 At a time when citizens increasingly have to try to ascertain the law on a matter affecting them without professional assistance, the need for this is urgent. The process of consolidation is also likely to highlight the parts of a topic where the problem is not simply lack of clarity and confusion because the law is spread over many statutes, but a bad rule. In that way it can assist in clearing the ground for a more focused law reform exercise which can be less difficult to implement. Moreover, the process of implementing a consolidation is faster. In the UK, one long-standing candidate for consolidation is immigration law. The lack of clarity in statutes, rules and guidance and the fact that a lot of the material is either inaccessible or difficult to access means that even the lawyers acting for the Home Secretary can be misled.12

9 If the first two “needs” are met, what is the likely impact on the role of the court in a common law jurisdiction? In the early days of the Law Commission of England and Wales, the view of the courts tended to be that its creation meant that the systematic development of the common law was for legislation, aided by the expertise and thoroughness of a commission report and draft bill. Lord Scarman, the first chairman of the commission, was a notable proponent of this view. So, in National Westminster Bank plc v Morgan13 he rejected the argument that the court should recognise that cases of duress, undue influence and unconscionable bargains are based on a general principle of inequality of bargaining power. He did so on a number of grounds, one of which was that the task of restricting freedom of contract was essentially a legislative task for Parliament and not for the courts, and one which Parliament had undertaken in contexts such as consumer sales.14

10 The effect of difficulties in achieving legislative implementation of law commission reports have, however, led some to regard one of the functions of such bodies as also to meet a different “need”. That “need” is for a body which provides material which can influence development of the common law by the courts because it is well researched, informed by wide-ranging consultation, and empirically based. Such a body would address this need as well, proposing legislative solutions for those areas or parts of areas not susceptible to judicial reform by the incremental process of developing the common law. Some judges and former law commissioners favour the development of the common law by the courts where there has been a law commission project on the area and even see this as facilitating such development. The decisions of the House of Lords in Woolwich Equitable Building Society v Inland Revenue Commissioners15 (“Woolwich”) and Kleinwort Benson v Lincoln City Council16 (“Kleinwort Benson”) in 1993 and 1998 and that of the Supreme Court in Patel v Mirza in 2016 provide notable examples.

11 The absence of a law commission study of an area has also been used to justify not developing the common law. This was the view of, for example, Lord Goff in relation to the civil consequences of illegal transactions in his dissenting speech in Tinsley v Milligan.17 The common law approach was a rule (the “reliance” rule) generally precluding a claim or a defence which can only be established by relying on an illegal transaction.18 Lord Goff recognised the problems with the common law approach19 but stated that reform by the introduction of a

discretion (such as a “public conscience” test favoured in the Court of Appeal) should occur only after a full inquiry by the Law Commission. Such an inquiry would embrace not only the advantages and disadvantages of the present system, but also the likely advantages and disadvantages of a discretionary system.

12 In Patel v Mirza Lord Toulson stated that the decision in Tinsley v Milligan led to the Law Commission conducting its review of the law of illegality which, after 15 years culminated in its proposals in 2010 for addressing what it perceived to be its unsatisfactory...