REPORT OF THE SELECT COMMITTEE ON THE ESTABLISHMENT OF COURTS OF ARBITRATION.

Appendix to the Journals of the House of Representatives, 1866 Session I, F-12

F.—No. 12.

REPORT OF THE SELECT COMMITTEE ON THE ESTABLISHMENT OF COURTS OF ARBITRATION.

BROUGHT UP 21sx SEPTEMBER, AND ORDERED TO BE PRINTED.

WELLINGTON.

1866,

P.—No. 12.

The Select Committee appointed to inquire and Report as to the best means of giving practical effect to the Resolution of the House of Representatives of date August Sth, anent the establishment of Courts of Arbitration, have the honor to report as follows : — In entering upon the very important inquiry devolved upon them, it appeared to your Committee that their chief duty was to procure evidence as to the existence and practical working of Courts of Arbitration in other countries. Their attention has accordingly been directed mainly to this point, and although the information to be obtained here is somewhat limited, they have nevertheless found sufficient to warrant them in reporting that in France, in the Northern States of Europe, and in som6 of the South American States, the system of arbitration has been for many years in operation with marked success. It appears that in the French Code of Civil Procedure eleven sections are devoted to the proceedings in conciliation, and that they are not found defective in details is proved by the fact that in a single year 72G,56G cases were settled in that way. The following quotation from the journal of a resident in Norway during the years 1834,1835, and 1836, by Samuel Laing, Esq., will serve to show the working of the system in that country : —■ " The Court of first instance, the lowest in Norway, if it can be called one, is the parish Court of Mutual Agreement. This is a modern institution, which docs honor to the wisdom and liberal spirit of the Danish G-overnment. It is the first great and decided improvement upon the old modes and. forms of administering justice which has been attempted by any of the ancient Governments of Europe with success. It is a legacy from her former masters for which Norway should be grateful. In every parish the resident householders elect, every third year, from among themselves a person to be the Commissioner of Mutual Agreement. He must not practice law in any capacity, and his appointment is subject to the approval of the Amtman, or highest executive officer of the district. In towns or large and pojmlous parishes there are one or more assessors, or assistants to the Commissioner, and ho has always a clerk. He holds his Court once a month within the parish, and receives a small fee of an ort (ninepence) on entering each case. Every case or lawsuit whatsoever must pass through this preliminary Court, in which no lawyer or attorney is allowed to practice. The parties must appear personally, or by a person not professional. Each states his own case, and his statement is entered fully and to his own satisfaction in the protocol of the Commissioner, who must then endeavour to bring the parties to an agreement by proposing some middle course upon which both may agree. He acts, in short, as a private arbiter would do, and gives his opinion or judgment accordingly. If both parties agree to his finding or advice it is immediately taken to the local Court of law, or Sorenskrivcr's Court, which is also held within each parish, to be sanctioned, revised as to rights of any third parties, and registered; and it has, without expense, the validity of a final decision. For instance, if a person owes a simple debt, he must be summoned by the creditor to the Court of Mutual Agreement. The debtor may explain that he cannot pay the claim in money, but will pay it in corn or goods, or against a certain time, or has counter claims which extinguish part of it. All the statements of both parties are entered fully by the Commissioner in his protocol, and to their own satisfaction. He then proposes what he conceives may suit both parties ; such as a reasonable time to sell the corn or goods, or a reasonable deduction for the counter claims. If both agree the proposal is immediately registered. If one agrees, but the other does not, the party not agreeing appeals to the local or Sorcnskriver's Court, which sits once, at least, in each parish in every quarter of a year ; but he will have the expense of both parties to pay if the terms of agreement proposed and rejected are judged not unreasonable. In this higher Court, but which is, properly speaking, the lowest legal one, the parties appear, if they choose, by their law agents or procurators ; but in this, and all the subsequent or higher Courts through which a case may be carried, nothing is received but the protocol of the Court of Mutual Agreement —no new matter, statements, or references to evidence but what stand in the Commissioner's protocol. This is the best part of the institution. It confines the lawyer to his law, and brings the facts of the case, as understood by the parties themselves, before the Court without trick or disguise. Much legal talent is expended in our Courts in cross-examining witnesses, brow-beating the dull and honest, involving in contradiction the equally honest of quicker temperament, and working on the personal temper of witnesses in order to bring out such an appearance of a case as may deceive the judgment of an ordinary jury. This is all a very fine display of talent, but altogether inconsistent with the substantial ends of justice. It may happen that the practised Judge himself cannot always disentangle the truth from the contradictory statements which the ingenuity of the lawyer has contrived to twist round it. All the chicanery, which is the glory, and ought to be the shame, of the British bar, is cut off by the simple Norwegian arrangement, by which the only facts admitted to proof, or to legal argument, are those stated, together with the evidence on which they rest, in this protocol." —(Laing's Residence in Norway, eh. v., pp. 144-145.) At a later period, in a work published in 1857, Mr. Loring Brace, —when travelling through Norway, Sweden and Denmark —speaking of these Courts, says, " One of the most characteristic institutions of Norway is the Court of Compromise. It is of Danish origin. The arbiter or judge, who may be of any profession but the law, is elected in every parish by the resident property owners, once in three years. In the larger parishes he is allowed assistants. Ho serves for a merely nominal salary ; every case whatsoever must be brought before him, but always by the parties personally ; no lawyer's aid is allowed. The statements of each of the litigants is entered on the minutes of the Court, and the arbiter decide* between them. If they accept his opinion as final it is brought to the Justice Court, and, if approved, entered, and becomes a legal decision. If one or the other objecta to-

REPORT OP THE SELECT COMMITTEE ON COURTS OF ARBITRATION.

P.-No. 12,

his arbitration the party objecting appeals to the Justice Court, but he will be obliged to pay the whole expenses of both litigants if the proposal of arbitration is found just and reasonable. In this Court, and henceforth in all the courts to which the case may go, the parties can employ counsel, but through them all the only evidence or statements of facts received are the minutes of the first Compromise Court." The following is what is said of these Courts and their working in Denmark: —" These admirable Courts of Compromise, whoso constitution I have already described, were established first by the Danish Government in 1755 in the West Indies, and afterwards in 1795 in Denmark itself. They have proved thoroughly successful there. In 1843 the number of cases brought before these Courts was thirty-one thousand three hundred and thirty-eight, of which twenty-one thousand five hundred and twelve were settled, two hundred and ninety-nine postponed, and nine thousand five hundred and twenty-seven referred to Courts of law, where only two thousand eight hundred and seventeen were prosecuted. The fact that they have been established, and so often employed, reflects honor on both the nation and the Government." A copy of the Despatch newspaper, published in January, 18GG, contains the following remarks on this subject:— " The representatives of the Chambers of Commerce who have sat in London this week have, amongst many other suggestions, put forward one of a character which commends itself to the attention of Parliament. "VVe know the costliness and dilatory operation of the law on matters of commerce, and it seems hard that British merchants are not permitted to do for themselves what Frenchmen already accomplish with so much advantage to the trade of Prance. "In France, Mr. Samuelson says that " out of eighteen thousand one hundred and fifty-nine cases seven thousand and thirty-five only went so far as trial or judgment, for no less than five thousand seven hundred and sixty-three were " conciliated" by the Judges without any form of judgment being pronounced, and as many as four thousand six hundred and sixty-one were withdrawn, mainly through the influence of the Judges of these tribunals. " The Court consisted, of a president, fourteen judges and sixteen assistant judges, three of whom formed a quorum, although there were generally four or five present. All these judges were either traders or retired traders, but the only paid officer was the Eegistrar, and his duty consisted in receiving the debts and paying over the money, but his remuneration was paid by fees. The jurisdiction of the tribunal extends to all transactions, wholesale and retail. There is no appeal under £60, and the appeal is limited to points of law. Out of the eighteen thousand one hundred and fifty-nine cases there had only been six hundred appeals. "It may bo urged that mercantile disputes may be arbitrated, and so they can; but then the consent of both parties is required to such a course, and so the minority of commercial men, opposed to tribunals, is sufficient to destroy the usefulness of this plan of legal arbitration. " The Chambers of Commerce decided last year to adopt County Court Judges, and Bankruptcy Commissioners as presidents of the new tribunals, but the proposal was resisted by the Government for no good reason, as we could then see, except that the public mind was not prepared for so vast a change as was then contemplated." The eminent Dr. Lieber, in his work on " Civil Liberty and Self-government," page 234, says:— " Courts of Conciliation have existed in many countries, and long before the present justices of the peace were established in France by the first constituent assembly; but as we see them now there they must be called a French institution. " It has proved itself in France, as well as in other countries, of the highest value in preventing litigation, with all the evils which necessarily attach themselves to it. " Courts of Conciliation have attracted increased attention in England, since Lord Brougham's proposition of an Act for the further cheapening of Justice, in May, 1851. " Au instructive article on this important subject, and the excellent effects these Courts have produced in many countries, shown by official statistics, can be found in the German Saats—Lexicon ad verbuin ' Friedensgericht.' Courts of Conciliation exist also all over the Brazilian Empire, and no cause can be brought into any of the regular Courts of Law without a certificate that the parties to the suit have already appeared in one of the Conciliation Courts, and endeavoured to accommodate their differences. The system diminishes immensely the amount of unnecessary litigation. In the Constitution of the United States of America provision is made for the establishment of tribunals of conciliation. Your Committee, however, have been unable to discover to what extent the various States have availed themselves of such provision; with the exception of the State of New York, in the several counties of which they find that tribunals are established known as Courts of Conciliation. From the foregoing it will be seen that in the different countries enumerated the system of adjudication in civil cases as alluded to in the order of reference exists in the various shapes of Courts of Arbitration, Courts of Conciliation, and Courts of Mutual Agreement. With regard to the best mode of giving eft'ect to the principle of Arbitration in this Colony, and of putting it into practical shape, so as to be dealt with by the Legislature, this is a matter which cannot bo done in a hurry, and the details of which will require very mature consideration. The Committee therefore suggest that the earnest attention of the Government should be directed to the question during the recess, with a view to some definite action being taken next Session, in order that the system may be brought into operation not in the first instance generally, but by way of experiment in one or two localities. The Committee would only observe further that, while the question is one which requires to he carefully considered in order to be embodied in a Statute, yet that with the practical experience of other countries as a guide, there need not be any very great difficulty iv the way of framing a simple Legislative enactment which would give effect to the object in view. , James Macandeew, Chairman.

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REPORT OP COMMITTEE ON COURTS OP ARBITRATION.