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Will London remain the first choice for global disputes?

Will London remain the first choice for global disputes?


The UK courts' innovative approach and reputation for judicial independence continue to attract international litigants, say Robert Campbell and James Wagner

London’s pre-eminence as a centre for cross-border commercial disputes is often taken as a given. It offers a high-quality and experienced judiciary, a developed legal system, transparency, and the gold standard – English law. Further, London’s unique position, the cradle of common law on the doorstep of civil law Europe, has made it extremely attractive for international litigants.

But now that the UK has decided to leave the EU, what does this mean for London? With the developing sophistication of Hong Kong and Singapore as disputes hubs, can London keep its crown?

One of the unexpected consequences of Brexit is that it has thrown off any sense of complacency in the legal community. There can be no sense of entitlement to be first choice. Across the profession, steps have been taken to ensure that what attracts disputing parties to our door is enhanced and promoted.

Innovative approach

Over the past 18 months, quieter times by all accounts, the courts have introduced a raft of technological and procedural innovations to future-proof their capabilities and ensure that they on a par with their competitors.

One of the biggest advances in technology has been the introduction of the electronic filing system – CE-File – in the Rolls Building. While the initial uptake has been slow, as the City of London moves to a paperless environment, this technology will gain traction and stand the courts in good stead for the future.

Procedurally, there have been numerous innovations that cater for consumers’ needs. The shorter and flexible trial schemes offer parties an opportunity to deal with their disputes in an efficient and flexible manner. Meanwhile, the introduction of the Financial List is a clear example of the courts developing procedures to deal with high-value financial claims.

Meanwhile, over the same timeframe, it has been noted that the courts have been struggling to recruit and retain senior judges. Recent events have been a shot in the arm. It has been reported in the Times that the government is proposing a pay rise of 12 to 15 per cent for High Court judges. This measure is designed to protect London’s reputation for a high-quality and experienced judiciary.

These advances are indicative of a sophisticated and developed legal system that is focused on staying at the top of the pecking order.

Judicial impartiality

While the judiciary gained unwarranted negative column inches for the judgment in R (Miller) v Secretary of State for Exiting the European Union [2016] EWHC 2768 (Admin), the decision showed the world that the UK courts are undeniably independent. This is something many of us take for granted.

The World Economic Forum, which measures the competitiveness of 138 economies in its annual Global Competitiveness Report 2016-2017, found that not one of the BRIC nations – which refer a considerable number of commercial disputes to the courts of England and Wales – ranked in the top 50 for judicial independence (Brazil was ranked 79th; Russia, 95th; India, 54th; and China, 56th). Meanwhile, the UK is the only traditional global disputes hub in the top ten for judicial independence.

Large and developing economies will continue to look to the UK as a sophisticated legal system, with an unparalleled reputation for judicial independence and excellence, to adjudicate their disputes.

International arbitration

There has been an undeniable increase in parties using the Hong Kong International Arbitration Centre (HKIAC) and the Singapore International Arbitration Centre (SIAC) as their preferred arbitration institutions. Both HKIAC and SIAC reported that they administered 271 new arbitrations in 2015 (up from 252 and 222 in 2014 respectively). These centres have proved particularly popular with Asia Pacific-related disputes.

What is remarkable, however, is that while parties have selected HKIAC and SIAC as the institutions to administer their arbitration, there is still a desire to use England and Wales as the seat of arbitration, and English law as the governing law. For example, HKIAC records that ‘Hong Kong law was the top choice for governing substantive contracts, followed by English law’. This shows that, despite the emergence of Hong Kong and Singapore, parties still consider London the premier dispute resolution hub.

As we lurch from one major international political and economic event to the next, business will seek continuity where it can. The desire of commercial parties to use English law, combined with the courts’ innovative approach to technology and procedure, means that London will continue to maintain its competitive advantage as the pre-eminent global disputes hub.

Robert Campbell, pictured, is a partner and James Wagner an associate at Faegre Baker Daniels