Share of EU litigants using English courts falls further

Out-Law News | 02 Dec 2016 | 2:02 pm | 2 min. read

The share of European litigants opting to settle their disputes in the English courts has fallen for the fourth successive year, down to 20% from a peak of 35% in 2012/13, according to annual research.

According to Portland Communications, two thirds of the cases heard by the commercial courts in London now involve foreign litigants. However, litigants seem to be coming from an increasingly narrow pool of countries: 57 nationalities were represented in the court in 2015/16, the lowest number on records.

The figures emerged at the same time as Lord Thomas, the Lord Chief Justice of England and Wales, warned the English courts against "complacency" in the face of strong competition from overseas dispute resolution centres. He called for a "clear strategy" from the legal profession, government and courts to ensure that London remained an "attractive" destination for overseas litigants.

Speaking during his annual press conference at the Royal Courts of Justice in London, Lord Thomas said that London's reputation as an international dispute resolution centre depended not only on the quality of the judiciary, but also on "the state of the buildings and the state of the IT".

"We must continue to strengthen the legal profession and make sure that it and the judiciary adapts to changing times," he said, in response to a question from a journalist.

"We shall have a struggle, I have got no doubt, Brexit or no Brexit. I don't think Brexit is terribly relevant to that. We just must make certain that we retain our position," he said.

Lord Thomas also addressed recent press criticism of judicial independence, following the High Court's ruling that the UK government did not have the right to 'trigger' Article 50 of the Treaty on European Union and begin the country's withdrawal without a vote in parliament. Judicial independence was "paramount" and one of the reasons for international litigants' interest in the English courts, according to the senior judge.

"We are an attractive jurisdiction because everyone knows, not only are the judges the best or amongst the best in the world but that we are totally uninfluenced by external events," he said.

However, he refused to elaborate on his position, on the grounds that additional comments would be "interpreted ... as some comment on the existing case in relation to Article 50".

Whether judgments of the UK courts will continue to be recognised by courts in other EU jurisdictions once the Brexit process is complete is one of the many issues that will have to be discussed as part of future negotiations. Currently, judgments of EU national courts in civil and commercial proceedings are enforceable in other member states under the Brussels Regulations: 'Brussels 1' applies to judgments in proceedings initiated before 10 January 2015, while the 'Recast Brussels 1' regulation applies to judgments in proceedings initiated after that date.

However, the enforceability of UK arbitration awards overseas will not be affected by the Brexit process. The New York Convention, which governs the ability to enforce international arbitration awards, has nothing to do with EU law, meaning that UK awards will continue to be enforced in any jurisdiction which is a party to the New York Convention.

Europe has historically been home to the largest share of English commercial court litigants over the eight years of Portland's analysis, sometimes even surpassing the number of UK litigants. However, the share of litigants from Europe has declined steadily over the past four years, to under 20% as of 2015/16.

Kazakhstan, Russia, Switzerland and the US have ranked in the top eight countries of origin for litigants every year since the study began in 2008, with many of those countries often choosing to have domestic disputes heard in the London courts, Portland said.

"Our eight years of research is further proof of the attraction of London to litigants around the world," said Phil Hall, head of disputes at Portland. "The decline from Europe is however notable – it will be interesting to see if it continues in the coming year."