- The London courts have long been held up as the gold standard, but could market disruption, Brexit uncertainty and high costs threaten their supremacy?
- Practitioners must engage with opportunities for reform if London’s courts are to remain at the forefront of the market.
Disruption is now present in every sphere of our lives. However, disruption does not stem solely from technology or business innovations—it is also influenced by demographic shifts, globalisation, macro-economic trends and more. Such terminology may not have existed at the time at which London’s courts forged their international reputation. However, whatever the terminology, the underlying factors which shaped the export of English law and London courts internationally could no doubt now be easily characterised by reference to those labels.
Accordingly, although English courts and procedures have long been the envy of the world, we need to be mindful of the risk of disruption, given the current socio-political environment. As former US ambassador Michael McFaul is attributed as having observed: ‘In retrospect, all revolutions seem inevitable. Beforehand, all revolutions seem impossible.’ There is a long list of governments, civilisations, businesses and social structures, which have been accepted as the gold standard for decades, if not longer, but which have ultimately fallen victim to the vagaries of disruption.
Sounding the death knell
Counterintuitive though it may be, failure to change in the face of a confluence of disruptive factors can sound the death knell for the established norm. Stakeholders in London’s legal industry, and in particular those involved with its courts—whether judges, lawyers or end users—would do well to keep this in mind. The perceived wisdom of the failure of dominant incumbent service providers is that they dismiss the initial disruption of their sphere of dominance because it appears inconsequential relative to the quality of the established service offering. However, if a small core of users embraces the disruptive offering, so that it gains a market toehold, it is not then a huge step for the disruptive offering to improve to the point where the offering becomes more attractive than that of the incumbent and is adopted en masse.
Fleeing the capital
Thankfully, although London’s litigation community may to some degree be suffering from Brexit fatigue, the mood does not appear to be one of complacency. Uncertainty about the implications of Brexit and in particular its effect on the recognition and enforcement of English judgments is a major factor driving the view of the majority in the recent NLJ /London Solicitors Litigation Association (LSLA) survey that there will be a significant flight of work away from this jurisdiction in the coming years. 81% of practitioners agreed that some level of urgent action is required by the government to protect London’s position as the pre-eminent litigation forum. A commonly held view in London’s legal community is that there is a myriad of reasons why London will remain as popular for the resolution of international disputes after Brexit as it does today. However, that could be characterised as the wishful thinking of a dominant incumbent. No doubt, the English-speaking courts in Dubai, Abu Dhabi, Qatar, Singapore and across Europe would vehemently disagree and are aggressively lobbying to that effect.
Our adversarial system combined with the strength of our judiciary delivers a high-quality litigation product. However, that product often comes at a considerable cost. Over 60% of respondents to the NLJ /LSLA survey foresee the costs of litigation increasing over the next five years, but many also acknowledge that our system must remain competitively priced if it is to preserve its position. Irrespective of Brexit, corporate end users have made abundantly clear their demand for a system that delivers greater efficiency, irrespective of the cost shifting rules. Our system is perceived by many to be too slow and too expensive for our commercial clients.
The legal service industry may not yet face disruption from digital innovation, harnessing artificial intelligence, robotics, virtual reality et al, but it is clear that old-style disruption is a real and immediate threat. It is encouraging, therefore, that judge-led reform involving solicitors and end users alike now appears to be very much the norm. The much-discussed disclosure pilot commences on 1 January 2019. Among the feedback to the reforms, a common refrain is that they will only serve to increase rather than decrease costs. Now is, however, the time to be brave and for practitioners to give the reforms a chance. In the world of disruption, sticking with the old is no longer an option. Engaging with the pilot, for good or bad, and providing constructive feedback on it is, in my opinion, a responsibility for all practitioners. At a time when we cannot necessarily compete with the deep pockets of other jurisdictions who have been investing in physical and digital infrastructure, and the recruitment of our retired judges, we can at least strive to make our procedure, with all its current advantages, even better. That is playing to our competitive advantage.
Similarly, the Commercial Court has now, through a working group lead by Mr Justice Popplewell, launched a survey seeking views on the current rules and practice for factual witness evidence from all users of the Business and Property Courts. Witness statements are another topic that will no doubt prompt fierce and lengthy debate. Completion of the working group survey, however, is the first step and I would again encourage all practitioners to engage with the survey and the issues that it raises. The opportunity is now to shape how we want our procedure for factual witness evidence to look going forward. It would be a great failing not to at least engage in the debate.
London’s courts are preeminent. We continue to lead from the front as the chair of the Standing Forum of International Commercial Courts, a body that was established at the suggestion of our judiciary to share best practices internationally. The Forum recently met in New York and heard from several general counsel (the likes of IBM, GE, JPMorgan, Uber and others) as to what users of commercial courts want. Now is the time to listen to those users and to act accordingly so that we remain in front as the international disputes centre of choice.
Julian Acratopulo, president of the London Solicitors Litigation Association & partner at Clifford Chance.
In the face of ongoing uncertainty, Julian Acratopulo asks: is the pre-eminence of the London courts being disrupted?