Why does it cost so much to go to court? In a judgment in April last year, Lord Justice Longmore said: “It is a well-known and rather disturbing fact that it costs far more to resolve intellectual property disputes in England than in other parts of the EEA [European Economic Area].”

Recently, the European Patent Office gathered information on the relative costs of litigation across Europe. It disclosed that to litigate a small to medium-sized patent case in England costs between three and ten times as much as the same case in Germany or the Netherlands.

The Gowers Review, published last December, stated that a company wishing to challenge a patent through the courts could expect to incur costs of £750,000 and nearly double that if it had to bear the other side’s costs as well. And this was for a simple case. Early this year I took part in a lecture tour of India. The message from Indian business people (including large multi-nationals) was consistent and depressing. They admired the quality of British justice and judgments but would not litigate in England if they could avoid it. English proceedings were too expensive. I heard the same message at a conference in Finland. One speaker exhorted others to litigate only patent disputes in Germany. There, you could obtain competent justice at reasonable cost.

Not everyone in the English legal system is concerned. Recently, a senior person in the patent field said that things were not really that bad – the diary of the Patents Court in London (part of the High Court) was very busy for the next 15 months. However, a dispassionate examination of the figures shows how bad the position is. Last year there were 500 patent trials in Germany. In England there were only 12 that reached judgment at first instance. No judge in that court heard more than four patent cases that went all the way to judgment.

There would have been patent trials conducted in that period in the Patents County Court, but the total number will have been less than 20.

Lord Justice Longmore was right to comment on our high costs. However, if he was singling out IP litigation for condemnation, he was wrong to do so. The Patents Court has been at the forefront of refining High Court litigation. Starting with Mr Justice Jacob (as he then was) for the past 15 years there has been an aggressive attempt to streamline procedure. Most things have been tried, including limiting (though not abolishing) documentary discovery. Some of its innovation were adopted later in the Woolf reforms. The result has been that, in most cases, a trial in the Patents Court now is far shorter than 20 years ago.

But costs are stubbornly high. The problem with IP litigation, and particularly patent litigation, is not that it is peculiarly expensive by English standards but that, unlike other types of litigation, it is so easy to compare like for like with equivalent litigation on the Continent. The issues raised in an English patent action are virtually identical to those in a German or Dutch action. Furthermore, litigants can often choose where to litigate and, when they do, most opt for the Continent.

What, then, is the cause of this unhappy state of affairs? Some have suggested that judges are to blame. But by the time the case reaches a judge, costs have largely been incurred. The problem is that the English system is labour-intensive. Lawyers expect to be paid for their work, whether they practice in England, Germany or Holland. If they need to do more work in English litigation than in equivalent proceedings on the Continent, the final bill will be higher as a consequence. As most practitioners agree, the Woolf reforms have done little to improve things and in some cases made the costs burden worse.

Any civil lawyer will identify why our proceedings cost so much; lengthy cross-examination and oral argument and, above all else, disclosure of documents. The latter, which supports and amplifies cross-examination and the length of submissions, is both expensive and, in the vast majority of cases, yields meagre returns. The English system hangs on to these procedures with touching loyalty. It may well be that for the very large commercial disputes (e.g. patent actions between large pharmaceutical companies or corporate fraud cases) the expense of all of this is proportionate to what is at stake. In such cases there may be good reason to continue the current system. But, unfortunately, that system is all that is available to most litigants who have more modest legal disputes. As a result they are either deprived of access to the court or, if they are lucky and their dispute crosses the Channel, they may be able to litigate there.

A legal system that is outside the financial reach of most of the population undermines the rule of law. On several occasions the Government has expressed concern. Indeed the Department for Constitutional Affairs’ own website refers to a 1994 article identifying costs as having created “a state of crisis” in civil litigation. The Government has addressed the problem of legal bills by reducing the availability of legal aid and what is paid to legal aid lawyers to the point where it is often no longer commercially worthwhile to do that work.

It has also reduced the burden on the Treasury by raising the cost to litigants of issuing proceedings to the extent that it has just announced a £45.5 million profit on the civil courts. But it is shameful for the Government to look after its own budget and even make a profit from the legal system, yet leave most people, including many small or medium-sized enterprises, with a system they cannot afford. Until a radical new approach is adopted, litigation will continue to be beyond the reach of most litigants including foreign companies who would otherwise be attracted by the quality of our lawyers and judges. Perhaps it is time to do the unthinkable and start making our system much more like that used by our continental colleagues.

The author is a former High Court judge, Professor of Intellectual Property Law at University College London and a consultant at Rouse & Co

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