Litigation in London’s commercial courts dipped before the UK lockdown at the end of March, new figures have revealed.
There was a slight decline in litigants from the rest of Europe, but an increase in those from the UK, Russia, Kazakhstan and Singapore.
The annual commercial courts survey from Portland found that the number of cases heard in 2019-2020 fell by 9% from the previous year to 198, after five years of continuous growth. The survey included only one hearing that took place after 23 March 2020.
Researchers said that, while there was a 3% decrease in the number of litigants to 808, there was an increase in UK litigants by four percentage points to 45%.
“For the fifth year in a row, Kazakhstan and Russia have continued their prominence, particularly in major civil fraud and investigations cases.
“Singapore also joined Russia and Kazakhstan in defying the overall decrease with nearly three times as many litigants in the London courts than 2018/19.
“This sharp increase was buoyed by a boom in business contract disputes, with 13 of the 22 Singaporean litigants appearing in court in the past year falling into this category.
“The impact of Covid-19 and related force majeure claims may drive this Singaporean business contract dispute figure even higher in 2020/21.”
Researchers said that, for the first time since Portland began tracking commercial courts cases, Libya and France became top 10 litigants by nationality.
Ukraine “slipped out” of the top 10, following a record number of litigants last year, though its high profile in the London courts was likely to continue.
Europe, the Americas and Africa all recorded declines in litigation, though the report was optimistic about the US.
“It is notable that US litigants continue to flock to London, partly due to uncertainty around the use of jury trials and the risk of punitive damages often applied in US courts.”
The survey found the number of nationalities of litigants using the courts remained at above 70 for the second year in a row, “demonstrating London’s reputation as an international hub for dispute resolution”.
Researchers were upbeat about the future of litigation in London post-pandemic, with the question being “not if but when we will see a return to normal levels”, noting that Google searches for force majeure over the past year had “increased almost six-fold” since the pandemic began.
“The increase in litigation is also likely to be supported by increased litigation funding. Compared to the last economic downturn in 2008, there is now significantly more money in the game.
“It is possible, therefore, that we may witness a swifter return to business as usual. In the long-term, many of the logistical changes made necessary by the coronavirus will likely endure – something litigators will have to take into account.”
However, the report also warned that the “international commercial courts marketplace” was becoming “increasingly crowded and competitive”, with three of the most serious challenges to London’s pre-eminent status coming from China, Singapore and post-Brexit Europe.
Meanwhile, a separate survey of British consumers by Portland found that they ranked courts and the justice system as second place in the priority list for relaxing the lockdown, beaten only by the food and drink industry.
Justice was ranked above construction and housing (which have already reopened to a large degree), banks, retailers (which will all be able to reopen later this month), hospitality, airlines and tourism.