Steep competition

While many onshore firms are still waiting for a litigation boom to kick off, the offshore world is a step ahead and vying for position as the leading offshore litigation centres.

Withers unveiled its intention to open in the British Virgin Islands (BVI) in March (30 March) in what was seen as a precautionary step by many offshore lawyers. Managing director Margaret Robertson told The Lawyer the firm took the step because an increasing amount of litigation now involves a BVI component.

Last month, the BVI Commercial Court was launched with 3 Stone Buildings’ Edward Bannister QC appointed as its first presiding judge (25 May).

The court is expected to hear cases stemming from the 800,000 offshore companies registered in the BVI, making it a key litigation centre for offshore lawyers.

Meanwhile, the Jersey court has recently benefited from a decision handed down by Brick Court’s Jonathan Sumption QC, who sits as leader of the Jersey Court of Appeal (27 May).

Until the decision was handed down in the Leeds United v AdMatch litigation, Jersey operated a security for costs rule. This effectively meant that any non-domiciled claimant looking to bring a claim against a Jersey-based company had to provide a deposit to the court to show it was capable of paying the other side’s legal costs.

This rule was put in place so that Jersey residents would not have to pursue costs from losing parties in foreign jurisdictions. Sumption effectively reversed that rule last month.

Leeds United attempted to sue Jersey-based company AdMatch in a bid to recover debts of £190,400 it alleged were owed to the club.

In response, AdMatch’s owner Robert Weston said that the football club should provide £263,500 as security for costs. Weston, representing himself, won that argument in Jersey’s Royal Courts, but in the Court of Appeal Sumption told Weston he would need to prove that Leeds United was a  “a slippery organisation, not good for its costs”. It was in this argument that he lost.

Ruling in favour of Leeds, Sumption found that there was no logical relationship between being resident outside of Jersey and having an inability or unwillingness to pay a successful defendant’s costs.

Going a step further, the court said an automatic order to provide costs in advance was a major impediment to the claimant’s access to justice and was in direct contradiction of the Human Rights (Jersey) Law 2000.

According to the football club’s advocate Philip Sinel, principal of Jersey-based firm Sinels Advocates: “The removal of this type of protectionism is a big step forward, it goes a long way towards providing the island with a better and more accessible legal system.” 

More accessible for companies based outside Jersey looking to recover costs from those Jersey-based banks embroiled in the credit crunch?

All this is good news for lawyers, providing plenty of work to carry the offshore world forward even in bleak times when the tidal wave of corporate work has been gradually reduced to a drip.