Chilton v Saga Holidays plc

Small-claims arbitration must remain informal, but informality does not authorise an arbitrator to deny a represented party the opportunity to cross-examine an opponent’s evidence. The adversarial system applies unless modified by a rule or agreement. A fair and equal opportunity means equal procedural opportunity, not equal legal expertise. Where one party is unrepresented, the arbitrator should assist that party by asking appropriate questions, while remaining judicial, rather than removing the represented party’s procedural rights. Natural justice requires an opportunity to test adverse evidence. Unnecessary formal demands for detailed particulars are inconsistent with the intended informality.

Saga Holidays appealed from the Chelmsford County Court, where His Honour Judge J.T. Turner upheld a registrar’s refusal to allow Saga’s solicitor to cross-examine Mr and Mrs Chilton during a small-claims arbitration. The refusal was based on the fact that the claimants were unrepresented and that cross-examination would give Saga an unfair advantage. The central issue was whether the informal arbitration procedure permitted the registrar to deny cross-examination in order to equalise the parties’ levels of legal expertise.

Disposition. The Court of Appeal unanimously allowed the appeal. The registrar’s award was set aside because refusing Saga’s solicitor the opportunity to cross-examine was an error in principle. The matter was ordered to be reheard by a different registrar at Westminster County Court, with no order as to costs.

1. Adversarial procedure and natural justice. Per the Master of the Rolls, the County Court Rules 1981 made the hearing informal and relaxed the strict rules of evidence, but did not displace natural justice. Unless a rule or agreement provided otherwise, the adversarial system entitled each party to tender its own evidence and the opposing party to ask questions testing its accuracy and completeness. This principle was supported by Allen v Allen [1894] Probate 248 and the statement from Drew v Drew reproduced in Russell on Arbitration.
2. Representation and equality. The rules did not prohibit legal representation. The requirement to afford each party a fair and equal opportunity did not permit the arbitrator to deny cross-examination merely because one party was represented and the other was not. The proper response was for the judge or registrar, without entering the arena, to make good deficiencies in the unrepresented party’s ability to present the case by asking appropriate questions.
3. Informality and rehearing. Informality remained important, and unnecessary requests for detailed particulars were to be rejected. Cross-examination was materially different because it protected the opportunity to test adverse evidence. The rehearing was to begin entirely afresh, and different or additional evidence could be called. The court noted that an application could alternatively be made for the dispute to proceed by ordinary litigation rather than arbitration.

Lord Justice Slade agreed with the Master of the Rolls’ reasons. Lord Justice Lloyd agreed with both judgments.

• Court of Appeal (Civil Division) — Appeal allowed unanimously; the award was set aside and a rehearing before a different registrar at Westminster County Court was ordered. [1984] EWCA Civ 1
• Chelmsford County Court — His Honour Judge J.T. Turner upheld the registrar’s refusal to permit cross-examination.
• Small-claims arbitration before the registrar — The registrar refused Saga’s request to cross-examine the claimants because they were unrepresented.