Boris and the oligarchs
21 November 2012 | By Sam Chadderton
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London mayor Boris Johnson has extended an invitation to oligarchs to litigate in London. Is that such a bad thing?
London mayor Boris Johnson has annoyed Prime Minister David Cameron - again - with his open invitation to overseas oligarchs to issue claims in the UK.
Contrary to the Government’s policy of discouraging libel tourism, the mayor has called on defamed foreign billionaires to settle their difference in the arena of the UK courts.
At the Confederation of British Industry’s annual conference in the capital this week, Boris said London lawyers were more than happy to “apply the necessary balm to the ego” in bringing libel cases to the High Court.
Love him or loathe him, Boris has a way of cutting through stuffy bureaucratic speak. He insisted London would be “grateful for the business” brought by forum-shopping oligarchs, while a spokesman for the PM could only mutter: “We’re trying to dissuade libel tourism on a point of principle.”
The Defamation Bill going through Parliament is looking to place more emphasis on the UK being the appropriate jurisdiction to bring a claim, rather than simply the easiest one to win in.
Boris, of course, is no stranger to libel claims, having instructed Collyer Bristow partner Rhory Robertson to defeat a case brought by RMT union boss Bob Crow over the Mayor’s election propaganda (16 July 2012).
But Simon Edwards, director at Prolegal Solicitors, has backed the outspoken mayor’s rallying cry that the UK legal industry is “open for business”.
He argued that the UK should be trading on its “unequalled” justice system on the world stage, rather than trying to limit which cases can be heard in the country.
“The UK is increasingly attractive to legal tourists because they know they can find highly specialised practitioners and expert judges in specialist courts,” said Edwards. “A decision from a UK court carries a global guarantee of impartiality, integrity and enforceability, which is attractive to all parties in a dispute.”
Boris urged wealthy worldwide would-be divorcees to air their dirty linen in the UK courts for the benefit of the economy, saying: “I have no shame in saying to the injured spouses of the world’s billionaires: if you want to take him to the cleaners, take him to the cleaners in London.”
Edwards said that the equitable approach of the UK’s family courts means both parties have to disclose documents that both support and undermine their case. This gives our courts a reputation as a fair and level playing field, he said.
“The reason Boris focused upon the wives of oligarchs is that the provision on divorce for the financially weaker spouse is very generous in the English courts,” explained Edwards. “The judges in our jurisdiction have an extremely wide discretion when deciding how assets should be divided, which makes it particularly attractive to this type of client base.”
Withers partner and family head Julian Lipson said Boris’s opinions were not new, but that it was unusual for a politician to be as forthright as to urge foreign claimants to ‘roll up, roll up’ to the UK courts.
“The point Boris was trying to make is that England is well known as a generous jurisdiction and he was making an invitation to the wives of wealthy men to forum shop, get their feet under the table and get divorced in this country if they are thinking of divorcing anywhere,” said Lipson. “Boris is expressing a phenomenon which exists - that there is forum shopping and people do manufacture their personal situations to get themselves under the wire of the English divorce jurisdiction. If they manage that, they do usually receive a much greater settlement than in their home country.”
Withers is one of a number of firms that represents clients on both sides of such high-profile divorce cases. But Lipson refused to divulge any trade secrets, saying it was not for a law firm to comment on what tactics are used to try to maximise divorce payouts.
“As lawyers it’s our responsibility to explain to clients the options available,” said Lipson. “It could be negligent not to do so. What the clients do with that information is their decision. It may not necessarily be a nefarious choice - they might be weighing up their presence in England and that information may guide what they do in terms of either increasing or decreasing their presence here .
“It’s a two-way street. The other party in divorce proceedings may well be unwilling to be exposed and taking legal advice about how to manoeuvre themselves outside of the jurisdiction to avoid being caught in the English net.
“It’s absolutely fair to say that the majority of the public would be surprised by the machinations that go on in clients ’ minds when it comes to high-value divorce and how they can legitimately shimmy in or out of the English court’s jurisdiction either to increase or decrease a potential divorce award.”
Edwards argued that the growth in UK legal tourism over the past decade should not lead to complacency as other jurisdictions will establish themselves in the UK’s place if higher thresholds are put on what claims can be brought by overseas claimants.
Circus-master Boris is encouraging litigious oligarchs and their disgruntled spouses into the UK courts - and he’ll find little resistance from the City’s litigators.