Justice And The Peace

Litigants and businesses worldwide can be confident that disputes heard in the English Courts will be decided on intrinsic merits, the clarity and certainty of which is unparalleled by other legal systems. London is the most active centre for commercial litigation and international arbitration, outperforming other global destinations and accounting for some 40% of global corporate arbitrations. Not only is the UK recognised and respected the world over because of the stability and quality of our Courts, our Laws and our legal professionals, but the overall cost of UK international dispute resolution compares favourably with costs elsewhere. For example, in the UK, the general rule is that the loser pays the winner’s costs, whereas in other jurisdictions, such as the US, the costs burdens are startling, where each party is generally expected to bear its own costs.

In the arena of international business and finance – where competition is fierce and markets are dynamic – the UK remains the top investment destination in Europe, with the English legal system playing a key role in the attraction of the UK market. Indeed, English law remains a popular choice of governing law for many types of international transactions and governs around £250 billion of global mergers and acquisitions annually.

Demonstrably, English law has enviable brand recognition and international credibility. The exportation of English law as a best in class system (and its role in shaping the law of overseas jurisdictions) has enormous economic and soft power benefits for the UK. Less obvious is the competitive advantage that UK law offers to UK businesses (such as in the financial services, maritime and insurance sectors) through its dominant position in global, internationally mobile, transactions.

However, there are a number of threats to English law’s pre-eminence. There are competitor jurisdictions that have heavily invested in their legal sectors, such as in Asia and the Middle East, and it follows that such jurisdictions will seek to apply their own law to govern contracts and resolve disputes. A trend towards protectionism and the diminished influence of the UK as the gateway to the European market may also dilute English law’s global influence over time. The pre-eminence of UK capital markets is under threat, with the FTSE100 considered by some to be a dinosaur index on the verge of extinction given its concentration in traditional industries (such as oil and gas, mining, utilities, and banking) rather than more exciting growth areas – the potential impact on the service industry which supports the public capital markets (including legal services) being adversely affected. The war in Ukraine and the consequent sanctions on Russia has meant that UK law firms are often unwilling, or no longer able, to provide advice to Russian clients – it being noted that Russia was highly dependent on Western countries for legal services, with 85% of all legal services being imported from G7 countries and the UK accounting for 59% of these imports. Finally, much as the dominance of UK law in the financial services, maritime and insurance sectors can be traced to the UK’s historical dominance of international trade, competitor legal hubs are looking to take the lead in the new industrial and legal spaces created by technological advances, such as AI and crypto currencies.

Given the potential threats, the UK needs to act decisively to protect this underappreciated national asset that underpins so many forms of economic activity for the Country. Investment is essential to maintain and grow our legal system given the global competitive pressure. There needs to be ongoing investment in maintaining a pipeline of world leading judges through education and recognition. The UK justice system needs to be modernised, with technological improvements and the reduction in unnecessary and outdated bureaucracy. There needs to be greater coordination and support in promoting the use of English law in the international economy and the necessary investment should be seen in the context of the wider economic benefits for the country.

The English legal system contributes significantly to what makes the UK an attractive place to do business– we should be signing about it at the top of our voices - investing in its infrastructure and its international promotion to ensure it is still dominating for the next one thousand years.