Blurring the line
5 March 2012 | By Joanne Harris
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The division between commercial and Chancery work is becoming less distinct, as the bar pitches itself internationally and targets direct access work in a bid to ride the evolutionary wave
Last year was a landmark one for the commercial and Chancery courts in England, with the first-ever case managed jointly by both and the opening of the Rolls Building.
The year also brought a large amount of litigation for both solicitors’ firms and civil sets of chambers. But the commercial and Chancery bar is not resting on its laurels in the changing environment. It is keen to diversify and grow the range of services it offers, as well as the way it offers them.
Closely watched initiatives will include the recently announced Riverview Chambers, part of new alternative business structure (ABS) LawVest, which, while not a strictly commercial law venture at present, could well spark the development of similar projects.
The historical distinction between commercial and Chancery is beginning to disappear. The joint hearing by Mr Justice Mann and Mrs Justice Gloster in litigation brought by Russian oligarch Roman Abramovich could be just the start.
“Having participated in the first-ever joint trial in the Chancery Division and Commercial Court, I’m increasingly aware of the overlap in the work,” says Serle Court barrister Jonathan Adkin, one of the counsel for the widow of Georgian oligarch Arkadi ‘Badri’ Patarkatsishvili in the Abramovich case. “This will only grow following their move together into the Rolls Building. Chancery and commercial barristers need to be able to provide expertise in both fields, with cases increasingly straddling the divide.
“The distinction between the Chancery and commercial bars won’t disappear entirely, but it will get ever more blurred.”
The opening of the Rolls Building has been hailed by barristers and clerks as an important moment for both the commercial and Chancery divisions, with the potential to attract an ongoing flow of litigation to London. However, the time it took for the project to be completed, and the problems with facilities that are now being experienced, are negatives.
“The Rolls Building and the ‘Unlocking Disputes’ campaign are helpful in underscoring London’s reputation as the international litigation capital of the world,” says fellow Serle Court member Geraldine Clark, referring to the campaign supported by a host of firms and chambers to promote London as a litigation capital. “However, the capital expenditure on those projects is being undermined by a lack of revenue funding. The court’s not always able to provide an adequate level of service. The outstanding example is the period of a year to 18 months that commercial clients and other litigants are having to wait for their cases to come to trial in the Chancery Division.”
More government funding, say barristers, would be welcome for the promotional efforts in addition to investment in the court. Chancery Bar Association chair Malcolm Davis-White QC suggests that increased investment in IT, for example, would make the campaign more effective.
Hardwicke Building’s practice director Amanda Illing believes the campaign must not be carried out in isolation.
“More litigation in the UK will be desirable, but is dependent on a much wider political campaign of attracting trade, finance and industry to the country,” Illing points out. “The UK’s made a positive start by visiting emerging marketplaces across the world. We need to sustain this campaign, because any relationship, whether domestic or international, takes time to develop.
“We need to ensure we sustain our enthusiasm, keep up momentum and constantly send delegations to other marketplaces to raise the UK profile.”
The work of the Bar Council in this regard is praised by those in commercial and Chancery sets. 39 Essex Street chief executive David Barnes says the organisation’s “energetic” international committee has done much to raise the UK’s profile.
“The major arbitral institutions are based in London, so international clients really see London as the place for the resolution of international commercial and Chancery disputes,” Barnes says. “It would take a major shift to see this work moving away from London.”
Wise to the world
All sets report an increasing number of instructions from overseas. The rush of Russian litigation has buoyed a number of sets recently (as featured in The Lawyer last week, 27 February), but work is not only emanating from that part of the world.
Clerks report that international instructions are helping to compensate for any loss of revenue as a result of the recession, and many sets are embracing initiatives designed to boost their profiles overseas.
Illing, for example, points to Hardwicke’s ‘Hardwicke International’ branding, which was launched in 2010. The idea was to promote the set’s ability to work overseas and the international experience of its multilingual members.
Meanwhile, Barnes notes that it is important for sets with sizeable overseas practices to balance international and domestic work, rather than get carried away with foreign business.
But the commercial and Chancery bar is not only about London and international litigation.
The regional bar has, arguably, been forced to react more strongly to the recession and the pressures it has generated.
In January last year, for example, northern sets St John’s Buildings, Paradise Chambers and India Buildings merged to combat a reduction in publicly funded work. The combined set has a wide, diversified range of practice areas, including commercial and Chancery.
Tom Handley, director of Liverpool and Manchester set Exchange Chambers, predicts more consolidation of the regional bar.
“Business-focused chambers outside London, realising that in the current climate size does matter, are beginning to spread their wings,” he explains. “We’re seeing sets expand both by mergers and organic growth to achieve a wider geographical spread and realise the economies of scale.
“The advantages and disadvantages of merger versus organic growth are well-documented. A merger creates immediate critical mass and market share, while organic growth allows a set to expand without affecting its culture or compromising the quality of its offering. Our preference is for organic growth – we believe this is the best strategy.”
Sets have in the past few years become a lot more open to the concept of lateral hiring. The movement of barristers and even silks is now, if not commonplace, at least not unusual.
However, the long-term survival of the regional bar will depend not only on what sets outside London do, but also what the regional courts do. Barristers think that ensuring the regional courts have judges of equal quality to those in London is a key factor in this.
“An increasing number of pension cases are being issued out of London to ensure earlier listings,” notes Outer Temple Chambers’ David Grant. “However, there’s a tendency for matters to be listed before a district judge when the parties want at least a circuit judge and the comparable application in London would be in front of a judge.”
3 Paper Buildings’ commercial and business group head Christopher Aylwin agrees that more specialist judges would help to make regional courts more attractive to litigants based in different regions.
Davis-White believes the quality is already there, but suggests availability can be an issue.
“The calibre of judges in regional specialist centres where the Chancery, Mercantile and Technology and Construction Courts sit is of a high calibre, which is key to persuading litigants to litigate there,” he insists. “Flexibility in the
availability of judges to sit outside London as the need arises is a crucial administrative factor.”
“Case management of complicated commercial and Chancery cases by a High Court judge or experienced Chancery master in London can be more effective than the management of such cases by district judges in the regions,” she says. “It may make the regions more attractive if such cases were managed by circuit judges. Litigating complicated commercial or Chancery cases in the regions would be more attractive if parties could be sure they’d be heard by a High Court judge.”
Once again, the key seems to be improved investment in the interests of access to justice – and not only in the public sector. Illing believes that combined court centres have helped matters, but calls for increased government focus on modernisation and regionalisation.
Modernisation is the keyword for sets across the UK at the moment. Although law firms have been far quicker to react to possibilities presented by the Legal Services Act, barristers have the opportunity to develop new structures and ways of working too.
Clients are also responding to changing legislation by looking at different ways of instructing counsel. Panel arrangements and direct access are more common than ever, but both developments have their critics.
“What will ensure the future of the bar is excellence: excellence in advocacy, excellence in drafting and excellence in delivering sound and pertinent advice,” stresses Serle Court’s Nicholas Lavender QC. “It’s better for all concerned if this is delivered in an efficient and businesslike way, but efficient and businesslike mediocrity is still mediocrity.”
Outer Temple’s Grant says the way panels are run is key to their success.
“It depends how panels are managed,” he says. “If clients will only instruct panel members and the client’s worth it, the risk of conflict must simply be accepted.”
Barnes notes that a successful panel arrangement rests on how it is managed by chambers.
“A combination of panel and non-panel arrangements is the way forward,” he says. “It’s important for clerks to recognise that they should be trying to panel a team of barristers as opposed to the whole of chambers. A failure to fully appreciate the ramifications of a chambers panel could result in a loss of work from other clients due to perceived conflicts of interest.”
But Lavender does not believe that conflict is an issue.
“The question for a barrister is whether the effort it takes to get onto the panel is likely to be justified by the prospect of work, as membership of a panel doesn’t always lead to work,” he points out. “Conflicts of interest ought not to be a problem with panels, as membership of a panel doesn’t give rise to any conflict of interest in itself and barristers aren’t permitted to contract out of the cab-rank rule.”
Being on a panel will not necessarily preclude barristers from picking up high-value cases, believe sets – it is vital to strike a balance.
“Barrister organisations shouldn’t rule out tendering for panels and bulk work to deliver the service the client wants and sustain work for juniors members of the bar,” says Illing. “But a self-employed specialist barrister who provides an excellent-quality service to clients will always be sought after for higher-value work – such is the nature of the market.”
Davis-White agrees, saying he believes that clients or solicitors with high-value cases will prefer to instruct on a case-by-case basis rather than restricting choice through a panel arrangement.
The question of new organisations such as Riverview Chambers is divisive in the bar. Illing asserts her belief that “new structures are exciting and will be innovative, but are mostly irrelevant for the future of the bar”.
Aylwin says chambers should be looking to carve out specialist niches and make their name there.
“Commercial structures are economic only for high-volume, low-cost work,” he asserts.
Grant, meanwhile, does not see the two as mutually exclusive.
“Commercial enterprises focus on the products or services that ensure their future,” he says. “It’s important to realise that advocacy and litigation experience are niche areas in themselves.”
Quality, believe both barristers and clerks, is the real key to ensuring that the commercial and Chancery bar has a strong future.
“The commercial and Chancery bar provides a highly specialised, high-quality legal function,” stresses Barnes. “This, coupled with a strong commercial chambers structure, will enable it to build on the outstanding work that’s been carried out for many years.
“Clearly, high-quality specialist legal advice and advocacy will be key. But equally important will be the ability of chambers to deal with poor performance and inconsistent service.”
Being more commercial in nature and in style of working is supported widely and change is already underway. The sheer number of sets that now have chief executives rather than senior clerks is an illustration of this changing environment.
Chambers are also chasing direct access instructions aggressively, aware that law firms are trying to keep as much work as possible in a world where clients are paying less and less.
“Perhaps the greatest asset the bar has is the widespread acceptance that it must continue to evolve and change,” says Handley. “The challenges we face are considerable, but they’re exciting at the same time. We need to be progressive and forward-thinking. We need to embrace new business structures. We need to get bigger and better at the same time.
“There’s a lot to do, but we’re well-placed to do it.”
The commercial and Chancery bar plays a key role in litigation in the UK, attracting international litigants to London as well as providing access to justice for those outside the capital. But the world in which barristers work is changing. How can chambers evolve to best make the most of the opportunities?