12 March 2007
We English are frequently adept at finding fault with our own institutions and are regularly surprised to find that the very institutions we deride are admired and emulated abroad. Our quality companies are the targets of overseas buyers. Our strong economy and the successes of the City are the envy of overseas markets. Every day sees the arrival of overseas talent at our finance houses and law firms.
The strength of London as a centre for dispute resolution gives our law firms and businesses a competitive edge. The quality of our legal system is consistently admired overseas, with its harshest critics often being domestic.
Witness recently the reaction when the BCCI case collapsed. If the claim had been heard in the US there could have been class actions, depositions and discovery processes far beyond anything England has to offer, all with no automatic costs recovery for the Bank of England when successful. Or had the bank been brought in front of a court in various civil law jurisdictions, the seriousness of the unsuccessful allegations made could have led to a combination of civil and criminal actions, involving a powerful investigating magistrate, with restricted costs recovery.
In this context, from time to time various commentators look admiringly at aspects of legal systems overseas and recommend transplanting them into our own jurisdiction. This risks ignoring possible side effects. For example, the building blocks of the system in the US comprise: substantial damages awards with a hefty subjective punitive element; opt-out class actions; contingency fees; and rare adverse costs awards, which combined with contingency fees can permit a claimant to bring no-risk litigation and pressurise a fee-paying defendant into settlement.
With the possible exception of punitive damages awards, each of these individual features has been spoken of positively in the context of litigation funding. Often the thinking is prompted by the need to plug the gap left by the decimation of legal aid. It would be a sad irony if laudable attempts to remedy funding shortcomings led to the very compensation culture that the Government deplores.
We are also capable of scoring own goals without the need for overseas inspiration. Driven by the demands of the Treasury we are no doubt going to again see proposals that court fees be increased and trials be paid for on a daily basis.
It is about time we admired what we have in London and promoted our strengths. London is deservedly seen as a centre for high quality and businesslike dispute resolution, unbiased and sensitive to complex business and cultural issues.
Despite the unfair treatment sometimes meted out by our own ministers, the quality of the judiciary is exceptional. I remember a time in court when a partner from an overseas firm was surprised to hear Mr Justice Waller start "This is a case involving…" after four days of complex legal and factual arguments on a jurisdictional challenge. "What's he doing?" was the question. "Delivering [an immaculate and immediate] judgment" was the answer.
The oral and written submissions of our advocates are first class. They can (most of the time) impressively handle on their feet probing questions on all areas of the case from the relevant tribunal. The challenging interplay between tribunal and advocate permits a case in turn to be promoted and tested thoroughly.
Many City litigators have a thorough understanding of their clients' businesses and complex financial and physical products. They advise on the legal merits of the case, but then focus their energies on bringing about a business resolution to the problem, rather than letting it go through to an unpredictable tribunal determination. UK lawyers are frequently experienced in overseas legal systems and are able to explain to their overseas clients the English legal processes in a comparative and practical manner.
The forums and methods of dispute resolution in London are varied and tailored.
If you are worried about the opponent creating delays and hiding assets in the meantime, then your case can be heard in the Commercial Court (contrary to popular assumption the number of claim forms issued increased in 2006).
The London Court of International Arbitration, which boasts some of the top arbitration lawyers in the world, is the best forum for resolving an international project dispute confidentially behind the scenes.
As far as mediation is concerned, the UK possesses a high-quality cadre that is skilled in resolving multi-party and multijurisdictional disputes.
Room for improvement
Of course, we can do things better. As far as the High Court is concerned, advances in technology have made disclosure frequently unreasonably expensive, the system too often demands a Rolls-Royce service where a Smart car may suffice, and the oral tradition of advocacy lends itself to overly lengthy hearings. The Commercial Court has set up a working party with judges, solicitors and clients to improve the service offering. The arrival of a new Commercial Court building presents a further opportunity for service enhancement, so long as it is given full government support and is equipped for the demands of the 21st century.
But the improvements required must be kept in context. Litigation is becoming more mobile and recent decisions of the European Court of Justice effectively encourage forum shopping. So let us promote vigorously at home and abroad the strengths of London as a dispute resolution centre, let us help it improve where improvements are required, but let us not get carried away with our criticisms. Let us not inadvertently dull our competitive edge.
•Simon Davis is president of the London Solicitors Litigation Association and a partner at Clifford Chance