Boardman: reduce disclosure to the relevant documents to cut “exorbitant” litigation costs

Disclosure: rules have become impossibly burdensome

The cost of commercial litigation remains “exorbitant”, with abolition of general disclosure the first attack that should be made on it, a leading City solicitor has argued.

Nigel Boardman, a high-profile partner at magic circle firm Slaughter and May, said the legal profession has not given “an adequate response to the change in the economy since 2008”.

Writing in the Financial Times, he said: “We are still too keen to protect our own short-term interests when we should see that our and Britain’s long-term prosperity depends on a vibrant and fair legal marketplace, in which the law assists business rather than impeding it.”

On litigation, he acknowledged that there has been “some attempt at reform” since the excesses of BCCI’s case against the Bank of England in 2005. “But the price of justice remains exorbitant.”

He pointed to Boris Berezovsky’s recent suit against Roman Abramovich, after which Mr Berezovsky has had to pay, as the loser, £35m towards Mr Abramovich’s costs after a 12-week trial. The legal action by Kazakstan’s BTA Bank against former chairman Mukhtar Ablyazov involves 50 leading solicitors, including 22 partners, and 32 barristers, including eight QCs, he recounted.

“This is a return to the dark days of Jarndyce v Jarndyce – the Dickensian family dispute that runs for generations until the entire estate is consumed by costs. It is unacceptable that it should continue.

“At minimum, a reform of civil litigation should do away with the process of document disclosure, whereby each party has to produce any document that may be relevant to the case – a rule that has become impossibly burdensome with e-mails and electronic storage. Instead, each side should produce only those documents on which it relies, which would slash the cost of litigation.”

Mr Boardman also called for an end to a reliance on oral hearings, “which date from a time when most people could not read and are now merely an expensive and otiose theatre”. Instead, the judge should assess the merits of the case on the basis of written submissions, he said.

“This system already works in Germany, where nearly all commercial disputes are resolved with less than an hour of oral hearing and no document disclosure. I would not suggest Germany owes its economic success to an effective system for resolving commercial disputes – but it must help.”

Other issues included simplifying the tax code and “sensible deregulation” of corporate law, such as around the requirement for a prospectus when issuing shares.

Mr Boardman said the government would have to lead these reforms, but “the legal profession – which has undeniably benefited from the undue complexity of corporate regulation – must now do more to shape and promote a fundamental reform of business law”.



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