SJ Interview: James Palmer CBE

What motivated you to speak out on the challenges of UK legislation and its impact on the rule of law?

I’ve been very fortunate in my career. I’m in my early sixties now, and after more than three decades in corporate and commercial law, I remain deeply grateful for the opportunities the legal profession has given me. That gratitude translates into a sense of responsibility. Like many lawyers, even those in big firms, we care about justice and the social impact of the law, not just about serving clients or building careers. It’s perhaps less visible because business lawyers don’t often speak publicly about it, but the sentiment runs deep.

My own engagement with law reform began in 1994, when I was invited onto the City of London Law Society’s Company Law Committee. At the time, I was barely in my thirties, and that experience gave me an early window into how laws were being developed, and how much better they could be if practitioners’ perspectives were heard. I went on to chair that committee within a decade and have spent much of my professional life since then involved in legal policy work. Over time, I became increasingly concerned by the sheer volume of new legislation and regulation being introduced. When I started practice in the mid-1980s, you could not know every law, of course, but you knew broadly where to find what you needed. The law was mostly principles-based, intuitive in parts, and accessible. That accessibility has been eroded.

Let me share a story. In my first undergraduate lecture in 1982, the professor held up the bound statutes of 1881, about an inch and a half thick, and compared it with the three fat volumes for 1981. In just a century, the statute book had expanded six-fold. Since then, the growth has been exponential. We are drowning in law and regulation. Most bad behaviour was already criminalised or subject to liability decades ago; yet we keep adding more rules, often re-writing the same prohibitions in slightly different ways. The result is massive societal cost. Compliance with financial crime rules alone, according to a recent LexisNexis/Oxford Economics study, costs the UK £38 billion a year, likely an underestimate. That is more than we spend on the police, courts and prisons combined. Ultimately, these costs fall not on some abstract notion of “business,” but on people ie savers, consumers, pensioners. And the correlation between this explosion of law and regulation and our flatlining productivity should not be ignored.

How do you think the growing volume of legislation/regulation is affecting access to justice for smaller businesses and individuals?

The effect is profound. Complexity is always hardest for  smaller organisations to navigate. When I started out, a small business might seek advice from an individual accountant or local solicitor, and in many cases that was sufficient. Today, the layers of regulation are so dense that even routine matters often require specialist advice, sometimes multiple specialists liaising with each other. That is disproportionate for small firms, both in cost and in time.

The same is true for individuals. Civil justice, in particular, has become almost inaccessible for ordinary people. Yes, there is the small claims court, but beyond that, the costs are prohibitive. Complexity drives cost, and cost excludes access. It isn’t simply about legal aid funding, though that matters. It’s about the cumulative effect of making laws more detailed, technical and fragmented, rather than simpler and principles-based. When law is accessible, people can understand it. The old Sale of Goods Act standard—“goods shall be reasonably fit for purpose”—was clear. Today, one finds endless sub-rules, qualifications and cross-references. That erodes both understanding and trust.

And as the LexisNexis report shows, compliance burdens fall disproportionately on smaller  organisations. A global bank can afford a compliance department of hundreds. A start-up cannot. Regulation risks entrenching incumbents and stifling innovation. The issue is not simply fairness; it’s competitiveness. New entrants are the lifeblood of innovation, and yet our regulatory approach risks suffocating them before they have a chance to succeed.

You’ve called for a holistic review of the justice system; what would be your top priorities?

The first priority is to recognise that the law exists for people, not for its own sake. Businesses are vehicles for providing goods, services, returns on pensions and savings, all of which affect real lives. Every legal reform should be judged by its human impact. That sounds obvious, but too often the debate is framed in abstract, technical terms.

Second, proportionality. The Companies Act 2006, which I worked on while chairing the City Law Society’s committee, began with the principle of “Think Small First.” The aim was to reduce burdens on small businesses, and it was a very positive development. That mindset has been lost. We should recover it.

Third, accessibility. Simpler, clearer, principles-based rules enable individuals to understand their rights and obligations without so many layers of specialist interpretation. That is essential if civil justice is to be restored as a genuine avenue for ordinary people.

Finally, we need cultural change among policymakers. Too often, a crisis or scandal leads to a knee-jerk legislative response. Bad outcomes are assumed to require new laws, when in fact existing law may already fairly address the issue. The result is regulatory inflation without evidence of improved outcomes. A serious review would ask: are we regulating outcomes, or simply regulating process?

In your experience, where have UK law-making processes gone wrong, and how might they be improved?

The problem lies in incentives. When I began my career, many areas were regulated by private or market-based bodies. The London Stock Exchange, for example, regulated capital markets effectively for decades. Today, almost all regulation is statutory. That means regulators are accountable to Parliament and ministers, and they are hauled before select committees when something goes wrong. Their natural bias, therefore, is towards constantly expanding regulation in order to show vigilance. But no system can eliminate all bad outcomes. Striving for perfection through more and more rules imposes enormous costs.

We also see inadequate evidence-based policy-making. The new corporate offence of “failure to prevent fraud” is one example. Its social benefit was asserted but not evidenced, yet the cost to business will be hundreds of millions of pounds annually. That cost ultimately hits savers, consumers and pensioners. We need a culture of asking: is this measure evidence-based, proportionate, and genuinely likely to improve outcomes?

Law-making also suffers from fragmentation. Each department legislates within its silo, with insufficient coordination. That leads to duplication, inconsistency, and contradictions. A more integrated approach, with stronger central oversight of legislative impact, would improve coherence.

What would it take for private civil justice to become more accessible and trusted across society?

 Others will have more expert insights, but cost and simplicity are important. The small claims process is a  positive approach, but many people still find it intimidating. Beyond that, civil litigation is too expensive for the average person. We need to look not just at funding, but at whether the system itself has become overburdened with complexity. Simpler laws, simpler procedures, and genuinely low-cost avenues for court redress are essential. Otherwise, people lose faith that the system works for them.

And when people lose faith, the consequences are broader than individual grievances. It undermines trust in the rule of law itself. If justice is perceived as only for the wealthy, it ceases to be a unifying social framework. Rebuilding that trust must be a priority.

How has your role at TheCityUK and interaction with policymakers shaped your views on legal reform?

My engagement with policy did not start at TheCityUK. It goes back to 1994 and the City of London Law Society. But TheCityUK has provided me with an opportunity to work on systemic issues at the interface of law, business and government. I chair its Legal Services Group and sit on its Leadership Council, which brings together leaders of major financial and professional services firms. Alongside colleagues like Sir Edward Braham (at the time at Freshfields), I worked extensively on Brexit, again not in a party-political way, but simply trying to make the system function better.

Through these roles, I have seen both the strengths and the weaknesses of our law-making culture. The strength is our deep reservoir of talent and commitment, in government and in the professions to rule of law. The weakness is the lack of holistic thinking. Government doesn’t fully understand business, and business doesn’t fully understand the pressures on government. Bridging that gap requires trust. My approach has been to speak openly, to focus on what works for society as a whole, not just on narrow client or sectoral interests. Credibility is everything. Without trust, policymakers will not listen.

That is also why I have devoted time outside my professional practice to policy-focused organisations. I chair the board of a non-partisan think tank (recently renamed Re:state) which works on improving public services and government effectiveness. That experience reinforces my belief that systemic reform requires cross-sector dialogue, not just legal technicalities.

As someone with deep experience in corporate law, how can legal frameworks better support both business and social justice?

Good business law supports economic growth, which funds pensions, jobs, and public services. But business law must also align with broader social goals, or it loses legitimacy. That alignment comes from proportionality, accessibility, and clarity. We must not take for granted the strengths of the UK system, its independence, its reputation, we should not assume they are indestructible. If we erode accessibility, we erode legitimacy.

Corporate law should also be seen as part of the wider justice system. Companies are social as well as economic actors. Ensuring that company law is proportionate, comprehensible and fair is essential to sustaining trust not only in business, but in the rule of law more broadly.

How do you balance the need for comprehensive laws with the risk of over-regulation?

The key is resisting the temptation to legislate in response to every bad event or headline. Some risks cannot be eliminated; attempting to do so through endless rules is counterproductive. It’s far better to have clear, principles-based laws, well enforced, than a jungle of technical provisions that few understand. Technology can help navigate complexity, but if we continue to pile on more rules, technology alone will not save us.

Equally, we must accept that law cannot create a risk-free society. There will always be failures, frauds, disputes. The role of law is to provide a framework for addressing them fairly and as effectively as possible, not to promise their total elimination. Recognising that distinction is crucial to avoiding the trap of over-regulation.

How do you see technology or innovation reshaping access to justice or legislative clarity?

Well, the honest answer is that I don’t know enough to say how much technology will help with legislative clarity itself. I doubt it will fundamentally simplify the law on its own.  It  will help us to navigate some of the complexity, but it cannot remove the complexity that has been created in the first place. If we adopt new tools and declare, “wonderful, this helps us cope with an overgrown system,” but meanwhile continue to generate ten million more complicated laws, we will simply make the situation worse. That’s my concern—that technology becomes a crutch for legislative excess rather than a cure for it.

That said, I do believe technology can have a very significant positive impact. The work that Sir Geoffrey Vos, the Master of the Rolls, has put into modernising our courts and promoting technology in the justice system is inspiring, and I strongly support it. Richard Susskind has also been a tireless advocate for using innovation to simplify processes and widen access. These are very valuable contributions. Technology can reduce cost, speed up procedure, and help people understand their rights more readily.

But it is not the whole answer. Artificial intelligence, for example, is essentially the aggregation of data drawn from existing material. It can identify patterns, synthesise information and produce outputs that will undoubtedly save cost and time. Those are real positives. Yet I worry about over-reliance. People tend to assume that once something works well, it will always work well. In my forty years in practice, I’ve never seen that to be true. AI outcomes will always depend on the inputs, and inputs are inevitably imperfect. They reflect human biases, human choices, human gaps in understanding. So human oversight will remain absolutely essential.

I do see AI and related technologies as part of the solution, but only part. If we rely on them alone, we will not achieve what we need. We must continue to ensure that human judgment, credibility and ethical standards guide the use of these tools.

And let’s remember, technology always brings both benefits and challenges. When I began my career, we had no computers on our desks, no email, no internet, no mobile phones. Each new advance has transformed how we work, but each has brought new problems too. AI will be the same. The key is to work through those problems, not ignore them, and to find the right balance between efficiency, accessibility and accountability. That’s why I welcome the serious debates now taking place around issues such as online safety. It’s encouraging that we are not simply assuming technology is either a panacea or a disaster, but are willing to confront its complexities.