Chilton v Saga Holidays Plc [1984] EWCA Civ 1

Mr and Mrs Chilton sued Saga Holidays over a disappointing holiday. In the small claims arbitration, the registrar refused to allow Saga's solicitor to cross-examine the unrepresented claimants. The Court of Appeal held this violated natural justice, as cross-examination is a fundamental right in adversarial proceedings.

Facts

Mr and Mrs Chilton took a holiday organised by Saga Holidays Plc and were extremely dissatisfied with various aspects of it. Rather than pursuing their claim through the ABTA arbitration procedure, they exercised their right to commence legal proceedings in the County Court. As their claim was for less than £500, it was referred to small claims arbitration before the registrar pursuant to the County Court Rules 1981.

At the arbitration hearing, Mr Chilton appeared in person while Saga Holidays was represented by a solicitor, Mr Radcliffe. The registrar ruled that in cases where one side is unrepresented, he did not allow cross-examination, stating that all questions to the other side would be put through him. Saga Holidays applied to set aside the award on the grounds that the refusal to allow cross-examination was contrary to natural justice and unauthorised by the County Court Rules.

Issues

Main Legal Issue

Whether a registrar conducting a small claims arbitration acted correctly in refusing to allow a represented party to cross-examine an unrepresented party.

Subsidiary Issues

The scope of the registrar’s discretion under Order 19 rule 5 of the County Court Rules 1981 and the requirements of natural justice in informal arbitration proceedings.

Judgment

The Court of Appeal unanimously allowed the appeal and set aside the registrar’s award, ordering a retrial before a different registrar.

The Master of the Rolls (Sir John Donaldson) held that both courts and arbitrators in England operate on an adversarial system, and it is fundamental that each party shall be entitled to tender their own evidence and that the other party shall be entitled to cross-examine.

“It is a system which can be modified by rules of court; it is a system which can be modified by contract between the parties; but, in the absence of one or the other, it is basically an adversarial system, and it is fundamental to that that each party shall be entitled to tender their own evidence and that the other party shall be entitled to ask questions designed to probe the accuracy or otherwise, or the completeness of otherwise, of the evidence which has been given.”

Citing Allen v Allen [1894] P 248, the Master of the Rolls quoted Lord Justice Lopes:

“It appears to us contrary to all rules of evidence, and opposed to natural justice, that the evidence of one party should be received as evidence against another party, without the latter having an opportunity of testing its truthfulness by cross-examination.”

The court rejected Mr Chilton’s argument that where expertise is unequal, the party with greater expertise must be disadvantaged to achieve equality. The Master of the Rolls stated:

“That seems to me to be a perversion of what the rule requires, which is ‘a fair and equal opportunity to each party to present his case’.”

The proper approach where one party is unrepresented is for the judge to assist the unrepresented party without entering the arena to a point where they can no longer act judicially.

Concurring Judgments

Lord Justice Slade agreed that while the registrar’s concern about unfair advantage was understandable, denying the right to cross-examination was an error in principle. Lord Justice Lloyd concurred with both judgments.

Implications

This case establishes important principles regarding procedural fairness in small claims arbitrations:

• The right to cross-examine witnesses is a fundamental aspect of natural justice in adversarial proceedings
• Informality in small claims procedures does not extend to removing core procedural rights
• The solution to inequality between represented and unrepresented parties is for the tribunal to assist the unrepresented party, not to deprive the represented party of legitimate procedural rights
• Judges have a duty to make good deficiencies in the advantages available to unrepresented parties without becoming so partial as to be unable to act judicially

The case also criticised excessive formality in small claims proceedings, with the Master of the Rolls disapproving of Saga Holidays’ application for further and better particulars as inappropriate for such proceedings.

Verdict: Appeal allowed. The registrar’s award was set aside and a retrial was ordered before a different registrar at Westminster County Court. No order as to costs.

Source: Chilton v Saga Holidays Plc [1984] EWCA Civ 1