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Unlocking Disputes: London’s role in international dispute resolution

Unlocking Disputes: London's role in international dispute resolutionLondon enjoys numerous benefits as a global dispute resolution centre, but English justice is about more than court room victory. With a politician’s mastery of obsequiousness, Chris Grayling the British Lord Chancellor, declared in March 2013 that the government is “determined to help British law firms and barristers compete in the global race and develop a presence that is equal to their world class reputation.”

Thus the government hailed the launch of an initiative called “Unlocking Disputes”, with the stated intent of further capitalising on London’s reputation as an international dispute resolution hub. As the heat of political hyperbole cools, it seems appropriate now to review the initiative, and in particular to question how international ADR sits in London’s legal landscape and what the initiative says about the government’s view of civil justice.

London’s claim to be a jurisdiction of choice for disputants rests in part on accidents of history and accidents of geography. English law, like the English language, proliferates. London’s location midway between time zones of the Far East and the United States is as convenient for the law as the financial markets. Where London merits its status in the legal world is as a result of its specialist, independent judiciary and an unrivalled body of mercantile law, which litigants like to hope offers greater predictability of outcome.  Whatever the political climate, the English judiciary remains (in the words of Lord Sumption) an institution, which however imperfect, “has been one of the more successful areas of English public life.”

To what degree these accidents and a sound judiciary make London an international dispute resolution hub is unclear. An oft-repeated factoid is that 90% of cases handled by London firms involve at least one foreign party. The origins of this statistic are obscure, but court filings appear to confirm that UK litigants are very substantially outnumbered by those from abroad. Thus, at the heart of the Unlocking Disputes initiative is the disquieting fact that the government is encouraging foreign parties to invest in a service that UK disputants appear no longer to want, need or wish to fund. When those most familiar with English civil justice are seeking alternatives in ever greater numbers, it seems right to question how those alternatives are being promoted.

Again, the answers are unclear. The name of the initiative is a nod to alternative dispute resolution. (The “unlocking” image has a long association associated with settlement and mediation in particular; CEDR’s logo, for example, features a key.) Nevertheless, the government’s invitation to foreign parties is to come to London and spend, rather than save. The outgoing UK Trade & Investment Minister, Lord Green praised the UK’s justice system in relation to the initiative, saying it: “brings more international litigants to the UK every year”, and calling it “an extremely valuable export in its own right”, including in “emerging economies where there is an increasing need for high quality legal service providers”. The need is undoubted, but when developed economies are baulking at the cost, the promotion of alternatives with equal vigour would seem the right thing to do.

The focal point and symbol of the government’s commitment to investing in dispute resolution is the £300m Rolls Building, London’s new commercial court. Architecturally, the building is adequate. The court rooms have been criticised for being too small, having poor acoustics, no windows, public galleries at the back rather than the sides, and an expensive and useless e-filing system. But it is deficient in other more fundamental respects. Those familiar with Frank Sander’s “Multi-Door Courthouse” – an increasingly popular and effective paradigm in which inbound court cases are routed to the most appropriate methods of dispute resolution – will note that the Rolls Building does not allow for dispute resolution other than by litigation. Smaller court rooms were purpose-designed so the court could handle a greater volume of litigation. And here the architecture reflects the relative prominence of ADR to litigation.

What is missing from the Unlocking Disputes rhetoric is any meaningful consideration of clients’ interests. The principal driver behind the initiative is plainly economic gain. Paying clients would be well advised to question whose economic gain. The purpose of litigation is not to prop up the UK’s flagging economy; rather it exists to vindicate the rights of individuals and companies. Achieving that end, with an informed view of process, risk and cost can be achieved in a multitude of ways, as UK companies appear to demonstrate. Litigation is one route, albeit one with well-documented shortcomings.

Successive reforms to English civil procedure have emphasised the often exorbitant cost of litigation, and sought to encourage parties to take strides towards settlement and away from the court. The government itself is a signatory to an ADR pledge and is obliged to seek informal means of dispute resolution wherever possible. Consistency might suggest that Unlocking Disputes should be exporting a similar mentality. In future perhaps it might. In the meantime, the government seems content to export a narrower view of English justice than is enjoyed by most domestically.

Politicians used to read Anthony Trollope, among them Prime Minsters Harold Macmillan and Sir John Major. (Lord Denning was also a noted Trollope fan.) The current generation of Tory reformers, seeking foreign investment, might reflect on the more prosaic, perhaps more realistic, nature of English justice as practised by Sir Abraham Haphazard QC in The Warden:

“It was very clear to Sir Abraham that the justice of the old men’s claim or the justice of Mr Harding’s defence were ideas that had never presented themselves. A legal victory over an opposing party was the service for which Sir Abraham was, as he imagined, to be paid; and that he, according to his lights had diligently laboured to achieve, and with probable hope of success. Of the intense desire which Mr Harding felt to be assured on fit authority that he was wronging no man, that he was entitled in true equity to his income, that he might sleep at night without pangs of conscience, that he was no robber, no spoiler of the poor; that he and all the world might be openly convinced that he was not the man which The Jupiter had described him to be; of such longings on the part of Mr Harding, Sir Abraham was entirely ignorant; nor indeed could it be looked on as part of his business to satisfy such desires. Such was not the system on which his battles were fought, and victories gained. Success was his object, and he was generally successful. He conquered enemies by their weaknesses rather than his own strength, and it had been found almost impossible to make up a case in which Sir Abraham, as an antagonist, would not find a flaw.”

by Matthew Rushton from JAMS International Blog

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