TRIALS BY JURY IN CIVIL CASES: THE RULES AND CASES CONSIDERED

In Taylor v Savik & Anor [2024] EW Misc 15 (CC) HHJ Paul Matthews considered the question of whether a jury trial should be ordered in a civil trial.  The judgment contains a detailed consideration of the legislation and case law relating to civil jury trials.  The judge concluded that the matter could not be conveniently tried by a jury, further if he had a general discretion it would not be exercised in favour of jury trial.

“The third reason given by the second respondent, following on from this, is that a “jury of my peers is more likely to lend weight to the horror of what has happened overall”. If what he means is that he considers that a jury is more likely than a judge to ignore the law, or the legal duties laid upon a fact-finder, then in my judgment that is an irrelevant, indeed illegitimate, consideration. If what he means is that a non-lawyer, or non-judge, is more likely to pay attention to purely human considerations, then I disagree. We professional judges are human too.”

THE CASE

The second respondent’s Trustee in Bankruptcy sought a declaration that the first respondent was the beneficial owner of property held by the second respondent.  The Trustee’s Particulars of Claim set out the nature of the property transaction and also set out various allegations of default and fraud by the second respondent bankrupt.

THE APPLICATION FOR A JURY TRIAL

The second respondent made an application for a trial by jury.

THE LAW

The judgment contains a detailed consideration of both the statutory basis for a civil trial by jury and the case law.

1. 1. At the hearing, neither side mentioned section 66 of the County Courts Act 1984, so I raised it with the parties. This section relevantly reads as follows:

“(1) In the following proceedings in [the county court] the trial shall be without a jury—

(a) Admiralty proceedings;

(b) proceedings arising—

(i) under Part I, II or III of the Rent (Agriculture) Act 1976, or

(ii) under any provision of the Rent Act 1977 other than a provision contained in Part V, sections 103 to 106 or Part IX, or

(iii) under Part I of the Protection from Eviction Act 1977; [or

(iv) under Part I of the Housing Act 1988]

(c) any appeal to the county court under [the Housing Act 1985].

(2) In all other proceedings in [the county court] the trial shall be without a jury unless the court otherwise orders on an application made in that behalf by any party to the proceedings in such manner and within such time before the trial as may be prescribed.

(3) Where, on any such application, the court is satisfied that there is in issue—

(a) a charge of fraud against the party making the application; or

(b) a claim in respect of […] malicious prosecution or false imprisonment; or

(c) any question or issue of a kind prescribed for the purposes of this paragraph,

the action shall be tried with a jury, unless the court is of opinion that the trial requires any prolonged examination of documents or accounts or any scientific or local investigation which cannot conveniently be made with a jury.”

1. 1. Similar provision is made in the Senior Courts Act 1981, section 69, for actions in the High Court, but only in relation to those for trial in the (then) Queen’s Bench Division of that court. For this reason, a claim of the present kind, brought by a trustee in bankruptcy in the Chancery Division of the High Court, could never attract a jury trial: see Stafford Winfield Cook & Partners v Winfield [1981] 1 WLR 458, 465. But this claim has been brought in the County Court, and so the 1984 Act applies. Section 66(2) of the 1984 Act corresponds to section 69(3) of the 1981 Act, and section 66(3) of the 1984 Act corresponds to section 69(1) of the 1981 Act. There is no equivalent in the 1981 Act to section 66(1) of the 1984 Act.

1. It will be seen that section 66(1) of the 1984 Act rules out jury trial in the cases there mentioned. Section 66(3) of the Act creates a default rule in favour of jury trial in the cases mentioned in that subsection, subject to an exception for trials that satisfy the test of not being able to be “conveniently” made before a jury because of the need for examination of documents or other scientific or local investigation. In all other cases, section 66(2) creates a presumption against jury trial, but with the court retaining a discretion as to whether to order one.

WHAT IS MEANT BY A “CHARGE OF FRAUD”

The judge reviewed the authorities and concluded.

1. These authorities are all binding on me, sitting here at first instance in the County Court. I conclude therefore that a “charge of fraud” within section 66(3) of the 1984 Act is not merely one of the making of a false statement, but instead one of the complete tort of deceit, including the allegation of loss suffered by the victim as a result. But section 66(3)(a) applies only where the “charge of fraud” is made against the person applying for the jury trial (ie the second respondent in this case).

THE COURT’S DISCRETION

1. 1. Finally, I turn to the question of discretion, pure and simple. This arises under section 66(2) of the 1984 Act. Under that provision, the court has the power to order a trial by jury. The applicant’s counsel referred in this connection to the decision of the Court of Appeal in H v Ministry of Defence [1991] 2 QB 103, where Lord Donaldson MR referred at (112) to

“how exceptional the circumstances would have to be before it was appropriate to order such a trial … “

However, by “such a trial” in that phrase, Lord Donaldson was referring to a trial of a claim for damages for personal injuries, and not to jury trials generally. This, of course, is not a claim for damages for personal injuries. So, I respectfully consider that that observation does not assist me in the present case, which is not one for compensation for personal injury.

1. 1. On the other hand, I refer again to the decision of the Court of Appeal in Parsons v Provincial Insurance plc, unreported, 20 February 1998, which I mentioned above. Henry LJ, with whom Aldous LJ agreed, said (at page 6 of the transcript):

“I turn to the question of discretion. Should the judge have ordered the jury in the exercise of his discretion? The judge viewed this as a relatively ordinary case where an insurer is saying that the claim under the policy was ‘fraudulently made’. He could, less provocatively but with equal accuracy, have said ‘dishonestly made’. Such claims were at the time of Barclays Bank [1967] 2 QB 738, [1966] 3 All ER 948 and are today, routinely tried by a judge alone. Mr Rees, for the plaintiff, criticised the judge for relying on what routinely happened on the facts in this individual case. The significance of ‘routinely’ is that it is a fundamental principle of justice that like justice should be obtained in like cases. He was therefore right to take into account the fact that these actions are routinely tried by judge alone and would, in my judgment, have been wrong not to take it into account.”

1. 1. He went on (at page 7):

” … the judge took the reality of the seriousness of the allegation into account. He also took into account, as he was entitled to do, that the trial would be shorter and cheaper and more manageable if tried by a judge alone. He is an experienced judge. It was his discretion. I can see nothing in his judgment to fault his approach to the exercise of that discretion. The plaintiff, despite Mr Rees’ eloquence, does not come close to showing that the judge’s refusal to order a jury fell outside the broad discretionary ambit entrusted to him. That is the test. But I would go further and say that he was plainly right.”

1. 1. The third judge, Sir Christopher Staughton, said (at page 8):

“As to discretion, I see no sufficient reason to interfere with the decision of May J, although I am not convinced that where trial by jury is otherwise appropriate it should be refused solely on the ground that it may take longer or cost more money. One does not need to turn to family law for the proposition that this court is slow to interfere with the decision of a judge on a matter that must have been in his discretion.”

1. 1. More recently, in McGrath v Independent Print Ltd [2013] EWHC 2202 (QB), Nichola Davies J said:

“25. The disposition of the courts today is against trial by jury. Trial by judge alone provides real case management advantages.”

Application of the law to the facts

“A charge of fraud”

1. 1. If paragraphs 5-6 and 17e, dealing with the VAT fraud, had been omitted from the points of claim, then, with one possible exception to which I shall return, there would be nothing in this claim by the trustee that could be said to amount to a charge of fraud within section 66(3)(a) of the 1984 Act. The second respondent’s application would (again, subject to that possible exception) rest entirely on the discretion given to the court under section 66(2). Of course, the trustee could have decided to abandon the VAT fraud paragraphs, and then the jury point would (subject to the possible exception) be unarguable by the second respondent. However, as I have said, they seem to me to add nothing to the substance of the claim in relation to The Grange, except purely prejudicial allegations. But the trustee has not abandoned them, those paragraphs remain there, and accordingly they must be considered.

1. 1. The authorities to which I have referred establish that a charge of fraud requires the allegation of the complete tort of deceit. Paragraph 6 of the points of claim alleges that the second respondent, as sole director of RSAL, caused RSAL to fail to submit VAT returns to HMRC as it should have done, although RSAL had charged VAT on its sales to UKPL (another company alleged to be controlled by the second respondent). Thus, it is impliedly alleged that RSAL failed to pay HMRC the VAT it had collected from UKPL. It is then alleged that UKPL reclaimed the VAT element it had paid to RSAL (by offsetting it against the VAT it would otherwise pay over to HMRC), and then sold the stamps at a loss to third parties, generating VAT repayments from HMRC.

1. 1. So, the substantive allegation is that, by RSAL’s failing to submit VAT returns when it should have done, UKPL was able to claim and obtain VAT repayments to which it would otherwise not have been entitled. This is, at least impliedly, an allegation of the tort of deceit. So, it is “a charge of fraud” for the purposes of section 66. Is it “a charge of fraud” against the second respondent (as opposed to either of the two companies alleged to have been involved)? The second respondent is alleged to have acted as director of the companies involved, and to have caused the companies to act as alleged. That is an allegation of actionable deceit by him: see Standard Chartered Bank v Pakistan National Shipping Corporation (No 2) [2003] 1 AC 959, HL.

1. 1. There is a further point I should mention here. In his written submission in answer of 28 March 2024, the second respondent says that the allegations which he makes prove fraud, and not just dishonesty. I think he has misunderstood section 66(3)(a), and in particular the significance of the word “against”. As I pointed out above (at [38]), for the provision to apply, the charge of fraud must be made against the person seeking the jury trial, and not against some third party.

1. I referred above to a possible further exception. This relates to the opening lines of paragraph 17 of the points of claim, which allege that The Grange was put into the first respondent’s name so that the second respondent could hide his ownership from his creditors. If that is properly an allegation of a false representation, however, it is not an allegation of the tort of deceit, because there is no allegation that anyone has relied on the representation and suffered loss as a result. So that is not a charge of fraud for this purpose. I can therefore put that on one side.

THE STATUTORY EXCEPTION

1. 1. The jury rule being thus engaged, I turn therefore to the statutory exception. This is whether, in the opinion of the court, the matter could not be conveniently tried before a jury. The Trustee makes three points. First, she says that this is not “local business” within the Insolvency Practice Direction, para 3.8, and therefore must be dealt with by the specialist Business & Property Courts judge. But that is not what the Practice Direction says, and in any event its text cannot prevail against the words of an Act of Parliament which provides (whether by mandatory wording or the exercise of a power thereby conferred) that there shall be a trial by jury.

1. 1. Her second point is that there will be very many pages of documentary evidence to consider. She says the exhibits to the applicant’s own witness statements exceed 600 pages in length. And, thirdly, she refers to the need to examine bank statements and analyses of payments. However, the test in section 69(3) does not depend on the amount of evidence that has been put forward, but on what will actually be needed to be considered. The necessary consideration of even a half-dozen detailed and complex documents may make it not convenient to try the matter before a jury, though they may be the only evidence. The necessary examination of just a half-dozen short letters among thousands of pages of otherwise marginally relevant evidence admitted may lead to the opposite conclusion.

1. 1. The second respondent on the other hand says that the jury would require “little time to understand the counterfeiting and frauds”, and would require “no particular accounting skills”. Here the words “the counterfeiting and frauds” refer, not to the allegations which the applicant makes against the second respondent, but to those which he makes against third parties. So far as I can see, these are not relevant to the question concerning the beneficial ownership of The Grange, nor to the further issue of how the VAT fraud was carried out by the second respondent.

1. 1. In my opinion, even if this case is restricted merely to the evidence dealing with the acquisition of The Grange, and the question whether the second respondent has or has not a beneficial interest in it, it will be one “which cannot conveniently be made with a jury”. This is because it will certainly involve the consideration of bank statements and detailed financial documents, in which the numbers are more important than the pieces of paper.

1. 1. I do not ignore the fact that, in criminal cases where a jury is required, such cases must by law be tried with a jury. But that requirement does not apply to civil cases, and in any event it does not mean that they are being tried “conveniently” by the jury (which is the test for civil cases). If the court has to consider in addition the allegations of VAT fraud, requiring the examination of further accounts and financial documents, it will be even less “conveniently” made with a jury. Accordingly, the non-jury default position applies, and this application must be refused.

Discretion

1. 1. In these circumstances, I consider that I have no further discretion to exercise. But, in case I am wrong about this, I add the following. Like Sir Christopher Staughton in Parsons, I too am not convinced that it would not be right to refuse a jury trial simply on the basis that it would take longer or cost more. But it is legitimate nevertheless at least to weigh time and cost in the balance. And I bear in mind (as in Parsons) that claims of this kind by trustees in bankruptcy are routinely tried by judge alone, and, as Nicola Davies J said in McGrath, “Trial by judge alone provides real case management advantages.”

1. 1. The second respondent makes two points in particular in relation to trial by jury. First, he says that “my status as a convicted criminal me leaves me wondering if I can be dealt with even-handedly by a single judge”. I do not see this as an argument in favour of having a jury over a judge alone. There is no a priori reason to suppose that a professional judge would be less sympathetic to a convicted criminal than a popular jury, and the second respondent adduces no evidence or other material in support of such a view. Indeed, some might say that any possible prejudice was the other way round. Moreover, a professional judge must give reasons for the decision, which can if appropriate be examined at appellate level. A jury gives none, and an appeal is thus rendered more difficult.

1. 1. The second reason given by the second respondent is that “a judge has little discretion to take a holistic view of a major fraud that now spans 10 years”. But the fact-finding function is exactly the same, whether the tribunal is a popular jury or a judge sitting alone. Neither form of tribunal has any more or less “discretion” in the finding of facts than the other. There is therefore nothing in this point.

1. 1. The third reason given by the second respondent, following on from this, is that a “jury of my peers is more likely to lend weight to the horror of what has happened overall”. If what he means is that he considers that a jury is more likely than a judge to ignore the law, or the legal duties laid upon a fact-finder, then in my judgment that is an irrelevant, indeed illegitimate, consideration. If what he means is that a non-lawyer, or non-judge, is more likely to pay attention to purely human considerations, then I disagree. We professional judges are human too.

1. For all these reasons, I consider that if I had a discretion, I would exercise it against conducting the forthcoming trial with a jury.