Is E-justice Reform of Norwegian Civil Procedure Finally Happening?

2.1 Technology neutral elements

Even though Norway has yet to develop a full-scale e-justice scheme, several e-justice elements are to be found in the Dispute Act. As mentioned above, the Expert Committee that drafted the Act proposed to adapt civil proceedings to modern information and communication technology through a ‘technology neutral’ wording of the Act. As this move only outlined future possibilities, and did not in itself require any funding, the Ministry of Justice endorsed it. One example of such technology neutral formulation is the Act’s provisions on court records, which allow for both old-fashioned pen and paper methods and modern technology.⁶ Another example, which also serves to illustrate that technology neutral provisions are not always sufficient in themselves, is the provision on the filing of pleadings and exhibits. As mentioned in the introduction, the Ministry of Justice did not follow up on the Expert Committee’s suggestion for obligatory electronic filing for parties represented by an advocate, but the provision on filing of pleadings and exhibits was still written in a technology neutral way.⁷ However, pleadings have to be signed,⁸ a requirement which, in the absence of a reliable e-signature solution, has hindered electronic filing. If urgent, pleadings can be scanned and sent by e-mail, but the original documents have to follow by post.⁹

2.2 Electronic recordings of proceedings

The Dispute Act also includes provisions that explicitly allow for, and to some extent demand, the use of new technology. Section 13-7 establishes electronic recording of the testimony of parties and witnesses as the main rule in all civil cases. Parties and witnesses are examined immediately before the court and the examination is recorded on video or tape. The purpose is two-fold. Firstly, recordings limit the need for examination of parties and witnesses before the courts of appeal, thereby saving both time and money. As the Expert Committee explicitly noted, appeal proceedings should not include full repetition of the hearing before the court of first instance, but rather be limited to a concentrated review of the disputed parts of the judgment under appeal.¹⁰ Secondly, in cases where parties or witnesses are still to be examined anew before the court of appeal, the recordings from the court of first instance can counter any inconsistencies or ‘adjustments’ in their testimonies (or at least allow the other party and/or the judges to point this out and ask follow-up questions).

In general, the Ministry of Justice was positive about the electronic recording of party and witness testimony but feared that mandatory rules could delay the entire reform. An exception for courts that do not have the necessary recording equipment was therefore added to the draft.¹¹ As the Ministry knew very well, this was the situation in many of the courts of first instance. Unfortunately, the situation has not really improved much since.¹² As a result, most testimonies are still today either not documented at all or only their main points are entered into the court record. This is particularly unfortunate because ordinary appeal procedures in Norway are essentially de novo, allowing for a full repetition of the proceedings that occur before the court of first instance.

2.3 Distance meetings

At present, the lack of necessary technical equipment also limits Norwegian courts in their use of ‘distance meetings’, as an alternative to ordinary court hearings. A distance meeting is a meeting at which not all participants are present in person, but participate using remote communication technology.¹³ Court hearings may be held, in whole or in part, as distance meetings when specifically provided for in the Dispute Act or with the consent of the parties involved.¹⁴ Such authorisation is given for all meetings at the preparatory stage.¹⁵ Following a rather strict division between preparations and the main hearing, the court cannot make decisions on the merits of the case at the preparatory stage. Rather, it will only check whether the preconditions for a main hearing are met and decide on matters of case management. Authorisation for distance meetings is given for small claims proceedings as well. In the small claims procedure, the court may decide that the oral hearing is to be held in the form of a distance meeting.¹⁶

Finally, in cases that are heard by more than one judge, deliberations may be held in the form of a distance meeting as long as no lay judges are involved.¹⁷

2.4 Distance examination

Under the Dispute Act, parties, witnesses and experts are, as a rule, heard directly before the adjudicating court.¹⁸ Still, the adjudicating court may, under certain conditions, examine parties, witnesses and experts by way of distance examination. The underlying rationale is the proportionality principle, which is one of the guiding principles of the entire Act: the procedure and the costs involved must be reasonably proportionate to the importance of the case.¹⁹ Section 21-10 fleshes this out in a rather general rule on distance examination:

‘Parties, witnesses and experts may be examined before the adjudicating court by way of distance examination if direct examination is not practicable or would be particularly onerous or expensive. Distance examination should not take place if the testimony may be of particular importance or if it may be imprudent for other reasons. Distance examination may always take place if the expense or disadvantages of direct testimony before the adjudicating court is considerable relative to the importance of the dispute to the parties. Experts who have made a written submission to the court may always be examined by way of distance examination unless it may be imprudent due to special circumstances.’

Distance examination may take place both in proceedings before the courts of first instance and in appeal proceedings. Under certain circumstances, it can also take place at the preparatory stage.²⁰ Distance examination may be decided by the court on its own motion. Obviously, the parties have the right to be heard,²¹ but the court can opt for distance examination even if both parties object. A party can appeal such a decision, but the grounds of appeal are very limited: as far as the discretionary assessment is concerned, an interlocutory procedural order can only be appealed on the grounds that it is unsound or clearly unreasonable.²² Normally, distance examination will be conducted by way of video examination, but audio examination suffices if equipment for video examination is unavailable.²³

The courts’ powers to opt for distance examination are even wider in small claims proceedings. Once again, the justification is to be found in the principle of proportionality. The court can always opt for distance examination in small claim proceedings unless the court itself finds it necessary to receive testimony directly at the court hearing.²⁴

The Norwegian reform of civil procedure has thus provided the courts with wide-ranging powers to decide whether and how a distance examination is to be held. Indeed, such examinations are in line with the proportionality principle that informs the entire Act. But, despite these inducements, distance examinations seem to be rarely used in practice.

5.1 The need for an explanation

Foreign observers may be excused for wondering why e-justice has not been higher on the agenda in Norway. In other parts of society, Norwegian authorities have been eager to facilitate the use of modern information technology. Despite the country’s size and population distribution, 78% of households across Norway had access to high-speed broadband services in 2014, well above the European Union (EU) average of 68%.⁴⁸ The difference is even bigger when it comes to fiber optic cables coverage, which reached 40% of households in 2014 (compared to an 18.7% EU average). In rural areas, access to fiber optic cables exceeded 22% in 2014, almost four times the EU average, and the government’s goal is for all Norwegian citizens to have access to 100 Mbps connections by 2018. The government itself has embraced the possibilities offered by modern information technology and launched an ambitious E-government programme – web-based services are to be the general rule for the public sector’s communication with citizens and businesses.⁴⁹

If one adds that Norway finds itself in a very privileged financial situation due to the revenues from oil and gas extraction (so that funding of the necessary recording equipment should not really be a problem), and considers the fact that the country’s size and population distribution makes it particularly well-suited for e-justice, the lack of real progress over the last 15 years begs for an explanation.

5.2 The overall performance of the civil justice system in Norway

One possible explanation for the lack of e-justice reform in Norway is that the existing civil justice system works quite well as it is. The global World Justice Project’s Rule of Law Index ranks Norway second only to Denmark in the overall assessment, and second only to the Netherlands when it comes to civil justice in particular.⁵⁰ In a comparative perspective, the Norwegian civil justice system is regarded as accessible and affordable, free of discrimination, corruption, and improper influence by public officials, with court proceedings conducted without unreasonable delays and with effective enforcement of decisions.⁵¹ Unsurprisingly, both the Lawyers’ Association and the Norwegian Courts Administration are of the opinion that more resources are needed, but there is general agreement that the Norwegian civil justice system works quite well. Cases are dealt with in an efficient manner; the average length of civil proceedings in the courts of first instance is only about 5-6 months and the courts of appeal will, on average, deal with an appeal in a civil case within another 6-7 months.⁵² Furthermore, public trust in the civil justice system is high. A judgeship is regarded as prestigious and judges are well paid, thus enabling the recruitment of highly competent personnel.

5.3 The popularity of the complaints boards

In the Norwegian civil justice system, some of the most pressing reasons for e-justice reforms apparent in other European countries, are taken care of by out-of-court mechanisms. Most importantly, many civil cases are dealt with by different complaints boards.⁵³ Some of these boards have a statutory basis, while others are based on a contract between consumer protection organisations and one or more professional bodies (sometimes with governmental approval of the set-up⁵⁴). None of these complaints boards are defined as courts under Norwegian law, but from a functional perspective quite a few of the statutory-based ones are essentially specialised courts of first instance. From an EU law perspective, they would qualify as ‘courts’ (or at least ‘tribunals’) entitled to refer preliminary questions to the Court of Justice of the EU (CJEU) in accordance with Article 267 of the Treaty on the Functioning of the European Union.⁵⁵

Two particularly important examples in the field of consumer protection are Forbrukertvistutvalget [the Consumer Disputes Commission] and Husleietvistutvalget [the Rent Disputes Tribunal].⁵⁶ Both decide about 1,500 disputes each year, of which only very few continue on to the ordinary courts.⁵⁷ Other examples of statutory-based complaints boards in consumer cases include Transportklagenemnda [the Air Passenger Complaints Handling Body], Pakkereisenemnda [the Complaints Board for Package Holidays], Brukerklagenemnda for elektronisk kommunikasjon [the Complaints Board for Electronic Communication], and Elklagenemnda [the Electricity Appeal Board].⁵⁸ These are only a few examples, however; the list could easily be much longer. As to contract-based complaints boards, one of the most important is Finansklagenemnda [the Norwegian Financial Services Complaints Board], which handles about 600 cases every year. Its decisions are not formally binding, but they are usually accepted by the parties involved. Similar contract-based complaints boards exist for many other services (such as real estate agencies, undertakers, car-dealers, car-rental, parking, artisan services etc.).

Outside the field of consumer protection law, important civil law examples include Likestillings- og diskrimineringsnemnda [the Equality and Anti-discrimination Tribunal], Tvisteløsningsnemnda [the Dispute Resolution Board under the Working Environment Act] and Pasientskadenemnda [the Patients’ Injury Compensation Board]. As the Norwegian judicial system admits no distinction between civil and administrative cases,⁵⁹ it is important to add the many complaints boards dealing with administrative law cases. Trygderetten [the Social Security Tribunal], KOFA [the Complaint Board for Public Procurement], Skatteklagenemnda [the Complaint Board for Tax Matters], Statens helsepersonellnemnd [the Appeal Board for Health Personnel] and Klagenemnda for behandling i utlandet [the Appeal Board regarding Medical Treatment Abroad] are just a few examples.

The main purpose behind all of the complaints boards is to offer affordable, efficient and professionally competent means of dispute resolution. With a few exceptions, proceedings are in writing only and the time spent on each case is, on average, much shorter than for ordinary court proceedings. Use of complaints boards is either free or subject to a fairly modest fee (typically about €50-100). The statutory-based complaints boards are all financed by the state, but the costs are probably outweighed by the fact that the boards function as an alternative to proceedings in the ordinary courts. Even though the parties are free to bring their dispute before the ordinary courts, experience shows this very rarely happens.⁶⁰ In practice, therefore, the complaints boards operate as a very popular alternative to the ordinary courts. The often rather low value of the dispute and the costs involved with further proceedings before the courts may, of course, help to explain this, but it is also significant that the complaints boards are staffed with jurists with special expertise in the relevant field of the law. This is very different in the ordinary courts, where Norway strongly adheres to the generalist tradition by which any judge is supposed to be qualified to hear any kind of case. Free from any such tradition-based constraints, some of the complaints boards have opted for quite extensive specialisation. Finansklagenemnda [the Norwegian Financial Services Complaints Board], for example, now consists of no less than five specialised complaints boards, each one dealing with a different kind of financial service.

Our reason for highlighting the complaints boards in an article on e-justice in Norway is two-fold. Firstly, the popularity of the complaints boards limits the push for e-justice reform in the ordinary courts by taking care of exactly those cases where the costs and length of court proceedings would be a problem. Without all of the complaints boards (and their popularity in practice), consumer protection organisations, in particular, could be expected to push harder for reforms of civil proceedings, and e-justice would surely be a part of any such push.

Secondly, and perhaps even more importantly, many of the complaints boards themselves have developed proceedings which deserve to be regarded as e-justice schemes. Complaints usually have to be submitted electronically through the home page of the relevant complaints board, as does the rejoinder and all other documents of the case. Some complaints boards, such as the abovementioned Brukerklagenemnda for elektronisk kommunikasjon [the Complaints Board for Electronic Communication], have introduced a ‘my case solution’ where the parties can submit all documents and follow the development of their case.⁶¹ Thus, if one acknowledges that, from a functional perspective, quite a few of the complaints boards are ‘courts’, there is indeed ongoing e-justice reform in Norway.

5.4 The conciliation boards

In addition to the complaints boards, the existence and functioning of the conciliation boards are important in understanding why the push for e-justice reform in the ordinary courts has not been stronger. Previously, the conciliation boards were themselves recognised as ‘courts’, but through the enactment of the new Dispute Act, their status was reduced to that of ‘mediation institutions with limited jurisdiction’.⁶² Staffed with laypeople and located in almost every municipality of Norway, the task of the conciliation boards is to help parties to achieve a simple, swift and cheap resolution of their case through conciliation or judgment.⁶³ In cases of a pecuniary character where the amount in dispute is less than NOK 125,000 (about €14,000), the conciliation board is an obligatory step on the way to the court of first instance, unless out-of-court mediation has been attempted or the case has been heard by an approved complaint board.⁶⁴ The conciliation board may only pass judgment (i) with the consent of both parties; (ii) at the request of one of the parties if the amount in dispute is less than NOK 125,000; (iii) if the conditions for passing judgment in default are fulfilled or (iv) if the only defence raised by the defendant is inability to pay or another defence deemed obviously irrelevant.⁶⁵ However, the latter two alternatives, in particular, are of considerable practical importance in cases of uncontested claims, so that such claims never have to be brought before the ordinary courts. This is part of the reason why there is no practical need in Norway for a simplified order for payment procedure to enable the ordinary courts to deal with uncontested claims (such as the Austrian and German Mahnverfahren).⁶⁶ In any event, it is not the limited jurisdiction to pass judgment in certain types of cases that is the main merit of the conciliation boards – it is their ability to settle a large number of ‘everyday’ disputes through mediation.

5.5 Less flattering causes: High legal costs and a lot of arbitration

However, the efficiency of Norwegian civil proceedings may also have some less flattering explanations: high legal costs and a lot of arbitration.

The legal costs involved with civil court proceedings in Norway are high, especially the fees charged by the lawyers. This has long been acknowledged as a problem in Norway. The Expert Committee that drafted the new Dispute Act stated that the legal costs involved with civil proceedings had reached levels where ‘many people have to refrain from enforcing their rights in the courts’.⁶⁷ The same concern was echoed by both government (the Ministry of Justice) and parliament.⁶⁸

In cases of a pecuniary character where the amount in dispute is less than NOK 125,000 (about €14,000), the new Act brought about real improvement by way of a separate small claims procedure in cases where the compensation for costs for legal assistance was limited to 20% of the amount in dispute, and never more than NOK 25,000 (about €2,800).⁶⁹ For other cases, however, the legislation limited itself to emphasise that the courts were obliged to review the necessity of the costs incurred by the successful party,⁷⁰ hoping that stricter scrutiny of the statement of costs could reduce their level by around 30%.⁷¹ The Ministry of Justice’s 2013 evaluation of the Act suggests that this has actually been achieved as far as proceedings before the courts of first instance are concerned.⁷²

Despite this achievement, however, the legal costs involved with civil proceedings in Norway are still too high. By way of illustration, a rather ordinary contract law dispute related to acquisition of a terrace house (quite common in Norway) can easily see the lawyers on both sides charging in the range of €20,000-30,000 each if a full day in court is required (also quite common in Norway, see the next subsection for an explanation). As the main rule under the Dispute Act is that the successful party is entitled to full compensation for his legal costs from the opposite party,⁷³ an ordinary citizen with an ordinary financial situation will certainly think twice before going to court with a case where the outcome appears uncertain.⁷⁴ Whilst obviously problematic from an access to justice perspective, the deterrent effect of the legal costs is part of the reason why Norwegian courts appear able to handle the inflow of civil cases, which again has probably weakened the push for reforms.

As to arbitration, this appears to be the preferred means of dispute resolution for professional parties in complex commercial cases.⁷⁵ The lack of specialised commercial courts (found in many other European countries) may be part of the explanation here, as it is difficult to see why, for example, the desire for discretion or the need for a swift decision should be more important to professional parties in Norway than elsewhere.⁷⁶ Of course, the disputes settled through arbitration in Norway are hardly the ones most suited for a full-scale e-justice scheme anyway, but the point advanced here is that the preference for arbitration eases the workload of the ordinary courts considerably. As mentioned above, with a manageable workload, the push for reform will naturally be weaker in Norway than in countries where the courts struggle to handle the constant inflow of cases.

5.6 Causes related to the way courts proceedings are conducted in Norway

In addition to the external reasons already given, the slow introduction of e-justice in Norway may also be due to certain features of the way civil cases are dealt with by Norwegian courts.

Firstly, the oral hearing remains a cornerstone of civil proceedings in Norway, in rather stark contrast to developments on the Continent. The expert committee drafting the new Act was aware of these developments and advocated a strengthening of the competences and responsibilities of the court both during the preparatory stage of the proceedings and in the administration of the main hearing. Nevertheless, the oral hearing still occupies a far more central role in civil proceedings in Norway than in most other European countries (such as Germany, for example). Due to a strict understanding of the principle of orality, combined with the principle of immediacy, much time in the oral hearing is spent on the presentation of documentary evidence. According to section 11-1 of the Dispute Act, rulings following a main hearing ‘shall be made on the basis of the proceedings at the court hearing’.⁷⁷ Written submissions shall form part of the basis for the decision ‘only to the extent provided by statute’.⁷⁸ This does not imply that all the documents have to be read out in court, but section 26-2 of the Act does require documentary evidence to be ‘presented by a review where the important aspects are pointed out’. The following sentence of the provision makes clear that, ‘[t]he review shall not be more detailed than justified by the need for the proper presentation of evidence’, but the parties and the court cannot simply agree to dispense with the oral documentation altogether.⁷⁹ In practice, in cases with a lot of documents, quite some time in the oral hearing will be spent simply waiting for all of the actors to find the relevant section of the relevant document.

For foreign observers familiar with developments in Germany and other countries from Continental Europe over the last decades, the importance and length of the oral hearing in civil proceedings in Norway often comes as a surprise and may be regarded as either an outdated luxury or simply a waste of time and resources.⁸⁰ The Expert Committee that drafted the Dispute Act noted that, as far as the principle of orality was concerned, the difference between Norwegian and German law was immense: whereas Norwegian civil procedure has, to a very large extent, held on to orality, German law has removed itself from this common past.⁸¹ Importantly, the Expert Committee did not see this as a reason to downplay the importance of orality in Norway, but rather as a justification to overlook recent reforms of German civil procedure as a possible model (or at least source of inspiration) for the new Dispute Act.⁸²

The reasons for the strong position of the principle of orality in Norwegian civil procedure are probably much the same as the ones that explain the slow introduction of e-justice elements – the latter, to a certain extent, being the result of the former. In addition to the causes explained above, it is tempting to add the interests of the advocates; lengthy oral proceedings obviously add considerably to their fees. As far as appeal proceedings are concerned, one may perhaps also add the appellate judges’ long-established preference for ‘proper’ court proceedings that are in touch with ‘the real world’, as opposed to what they perceive as ‘detached’ appeal proceedings found in many other European countries.

The new Dispute Act is also characterised by rules that encourage the parties to settle. In-court-mediation, in particular, is regarded as a successful development, and is frequently used in practice,⁸³ The traditional style of such mediation, though, is direct face-to-face discussions between the parties under the direction of a judge. In-court mediation may also be conducted by way of distance meetings involving telephones, video-conferences or other technological equipment, but the parties’ attendance and the possibility of direct discussions is presumably regarded as an advantage by both the judge and the parties.