31 July 2017Print This Post

Litigators evenly split on impact of Brexit

Commercial lawyers don’t want fixed costs

Litigation lawyers in London are fairly evenly split on whether Brexit will lead to a “significant flight of work” to other jurisdictions, a survey has found.

The survey also underlined the strength of opposition from commercial lawyers to fixed costs. Lord Justice Jackson is to publish his report on the issue this morning.

While 38% of litigators thought work would be lost because of Brexit, 35% disagreed and over a quarter were unsure, according to the poll of 286 lawyers, based mainly at the big City firms.

Of those that predicted a flight, a quarter thought Germany would profit most and a further quarter Singapore and South-East Asia. Other suggestions were New York, Paris, the Netherlands and “wherever the banks relocate to”.

One lawyer thought the “flight” was already happening, with clients heading for the “cheaper alternatives” of the Middle and Far East.

Another said that “if people are concerned about the enforcement of judgments, they won’t come to the UK”, and if the UK left the Unified Patent Court, the work would go to Germany or the Netherlands.

The survey, by the London Solicitors Litigation Association (LSLA) and New Law Journal, follows bullish comments earlier this year by the Lord Chief Justice, Lord Thomas, that Brexit would have a “beneficial effect” on arbitration.

The majority of lawyers (54%) thought the dispute resolution market in London would remain stable over the next year. A roughly equal number thought it would grow (20%), as opposed to decline (18%).

One litigator commented that “a combination of high cost and Brexit is likely to prevent any significant growth” while another thought Brexit was “likely to increase it”, though this “may take longer than one year”.

A further view was that “work has rallied since the initial drop following Brexit”. One lawyer said simply: “My experience is that litigation is usually stable.”

The unpopularity of a fixed-costs regime for commercial cases was underlined by the two-thirds of lawyers who were against one for claims worth under £250,000.

However, most litigators (59%) admitted that they expected the costs of litigation to increase over the next five years, compared to the 9% who thought it would decrease.

A large majority (72%) blamed the disclosure regime, which they did not believe was effective in controlling the burden and costs of disclosure.

One lawyer called for “greater judicial intervention and direction”, another for the appointment of “judicial assistants” to advise judges on the “most economic form” of disclosure.

Another wanted the courts to “abolish standard disclosure and move to request-based disclosure”, while one thought there should be a “concerted effort to focus only on what is necessary”.

Ed Crosse, president of the LSLA and partner at Simmons & Simmons, commented: “There is much cause for optimism for the London litigation market in the short term, though if it is to keep its crown in the future, neither the courts nor the profession should be complacent.

“The survey highlights that there is a demand for procedural reforms, notably in relation to disclosure.”

By Nick Hilborne

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