An edited transcript of their conversation appears below.
Michael Redman: Helen, as we celebrate International Disputes Week here in London, what are some of the key themes that you expect to emerge from the sessions?
Helen Dodds: Following last year’s theme, which was “global, sustainable, ethical”, this year’s theme is “adapting to a changing world”. There will still be a focus on ESG and there will still be sessions on finance, construction and energy. But there will also be sessions on some new topics including art, aviation and space.
There’s also a very international accent for this year’s sessions, with a focus on international participation. The week has already garnered quite a lot of international supporters, including arbitration institutions in Germany, Chile, Vietnam, Hong Kong, Singapore and sub-Saharan Africa, and there will be an international arbitration day on the Monday.
But as always, it’s going to be an opportunity to showcase the great dispute resolution talent that is based here in London.
MR: Despite Brexit, Covid-19 and the war in Ukraine, London still remains a leading center for litigation and dispute resolution. Why?
HD: To give some context, in 2021, UK legal services generated revenues for the UK economy of £32 billion, with exports of £7 billion and a trade surplus of £5.5 billion, so legal services are very important to the UK economy.
Since Brexit, there have been some attempts to tempt dispute resolution work away from the UK. There are some English language courts being set up in France, Germany and the Netherlands. But these are variable and don’t actually provide an equivalent. In fact, there have been before Brexit a number of international projects to develop dispute resolution centers around the world in places like the Dubai International Financial Centre and Singapore and even Kazakhstan.
I think another aspect of context is Covid-19, when courts on the world had to go online. This included, of course, our own commercial courts, which went digital and started holding remote hearings. Then of course, there is the Ukraine-Russia conflict and its effect on the business world.
So why would you come to London to do your dispute resolution? I think the reasons are mainly business and commercial. A lot of global business is negotiated in the English language. An awful lot of global business contracts are written under English law. This includes contracts for bespoke M&A, down to market standards like ISDA and LMA terms. Given the certainty and predictability of English law, it’s very popular for doing business contracts. It therefore follows that if you’re going to have a dispute relating to those contracts, it’s quite sensible to come to England and litigate in the English jurisdiction. And it should be noted that LegalUK, a think tank of which I am a director, commissioned a report in 2021 from economics consultancy Oxera, and set out to value the economic value of English law to the UK economy. And that of course goes into trillions.
There’s certainly also value add in coming to the English jurisdiction to have cases litigated. It’s well known that the English courts are not subject to corruption or political influence, and you only have to look at the Brexit decisions to understand that the quality of the judiciary is absolutely world leading. First of all, these are extremely able and clever people, but more than that, they’re very commercial. In England, being a judge is a second career and judges will have spent time as barristers or solicitors working in the commercial world with their clients on commercial cases and understanding their goals and drivers. And so, this makes them uniquely attuned to hear commercial cases.
In addition, Covid-19 of course created a need for courts around the world to go online and enhance their digital offering and the commercial courts in England did this very well. They were leaders in this, and they have now retained a lot of those facilities for the benefit of users, including clients.
The reality is it’s now easier than ever for overseas parties to use the English litigation system through digital means, and they can basically use the English court system and access the great English judges from the comfort of their own armchair.
And finally, but not least, there is another point which relates to the legal ecosystem in London. The Oxera report mentioned something called the agglomeration effect, which is basically the breadth and depth of legal support services that are available in London to serve those who are litigating. By this, I mean expert witnesses and the organizations that work with them, forensic experts, lawtech and legal technology and of course, there is a deep bench of litigation funders in London, including Burford Capital, of course.
MR: London remains a leading center for international arbitration. Why do foreign parties choose London as an arbitral seat, and how has Brexit impacted London’s leading role as an international arbitration center?
HD: There are a number of reasons why parties chose London. Some of these are the same as the reasons why they choose London for litigation: English language, English law and the agglomeration effect with all the support services. But there are some other factors.
Again, many leading English law arbitrators are based in London, as are a number of leading international arbitration institutions such as the LCIA, LCAM and the ICC UK branch. London is also a very arbitration friendly jurisdiction in the way that the courts support arbitration when called upon to do so.
There’s also the issue of enforcement and post-Brexit there have been some concerns that there may be some difficulty in enforcing English court judgments in Europe. Now, I personally think that these concerns are a bit exaggerated. But if you do have those concerns, arbitration in London provides the perfect solution because arbitration awards can be enforced under the New York Convention in any country which has signed that convention, and the last time I checked 172 countries had signed that convention, including those in Europe.
Finally, London should continue to do well as an arbitration center because the global arbitration pie is growing. There are a lot more arbitrations now, they’re online, they’re easy to access, just like accessing courts online. So the whole sector is growing and as a leading center, I would expect London to maintain a large portion of that pie.
MR: There have been new proposals from the Law Commission of England and Wales to update the Arbitration Act in 1996 to ensure that the UK continues to be the foremost destination for international disputes. How will these new developments enhance international arbitration in London?
HD: The Arbitration Act is 27 years old, and since it was passed arbitration has developed and moved on, and other jurisdictions have also promulgated their own laws on arbitration. So I think it was entirely appropriate to take the time to have a look at the Arbitration Act just to ensure that the law in England remains really at the cutting edge of arbitration thinking.
The Law Commission’s recommendations don’t contain many surprises and it’s very clear that they are not proposing a root and branch reform of the act. I think the biggest proposal or the most headline grabbing one is the one recommending that there’s an explicit endorsement of dismissing unmeritorious claims at an early stage. There are a collection of other smaller technical suggestions, such as whether courts can issue supportive injunctions against third parties.
There are some things that the Law Commission has not recommended to be done. They’re not recommending that confidentiality be made explicit. They’re satisfied with the current legal position. So what you have is a really good mix of stability and continuity, together with some changes that make sure that the law is current and future proof to ensure that London will be a good seat for the next foreseeable years.
MR: As a former in-house lawyer, you’ll be keenly aware of the cost implications of pursuing disputes. How can parties mitigate the rising costs of pursuing meritorious claims through arbitration or the court system?
HD: Costs are always in the crosshairs of the in-house lawyer. I think that the first thing you can do is try to avoid disputes altogether and there are structured ways of doing this. You can have dispute avoidance clauses in your contracts and then ways of dealing with disputes at the moment they arise to nip them in the bud. The construction industry is a good example of this, and actually it’s also something that’s commended by the government.
Something else you could do in your contracts is to have escalation clauses. So when problems arise, these may perhaps mandate that senior management get together and discuss the problem or possibly that mediation should be attempted. And frankly, I think that whether you have such a clause or not, it’s sensible for senior management to get together and have a chat and see if they can iron things out before anybody hits the litigation button.
Once the litigation button is hit, you can still deploy ADR and there are quite a lot of types of ADR. There’s more than just mediation. You could have an early neutral evaluation from a neutral third party to get an independent view on your likely prospects, leading to a focus on settlement. You can get an expert to determine standalone points, which is often helpful in disposing of chunks of the case which of course would lead to a saving in legal costs. And then you need to manage your case sensibly and think about how you can manage it in a cost-efficient way. Narrow the issues. Perhaps think about whether you need certain witnesses, certain experts, certain sets of documents.
One thing you should certainly do is think about using technology to bring down your costs. There are various tools that do document management, discovery management, settlement analysis and of course online hearings—all of these reduce costs.
You can think about having test cases. If you have a suite of cases, select one to run and then the others will abide by the results. The British Institute of International and Comparative Law ran a project on this topic between 2020 and 2022 called “Breathing Space”, and this looks at ways of running more efficient dispute resolution and saving costs.
But of course, at the end of all of this, parties really should think about how they’re going to be funding their cases. Obviously, if you’re an impecunious claimant with a very good case, then a litigation funder such as Burford could very well be the answer to your challenge. In the English jurisdiction it’s very helpful because funding is widely permitted across litigation and arbitration and there is a very mature and well-developed funding sector with the leading funders like Burford and others.
Another reason, of course, to think about deploying funders is even if you aren’t impecunious, you may like to think about how funding will affect your cash flow and your balance sheet, and you can use it for this. And of course, nowadays funding is spreading overseas. Certainly, overseas entities are having a look at it. It’s now used for arbitration in Hong Kong and Singapore. Some jurisdictions don’t like it. Ireland is not so keen, and the EU is seeking to regulate it. But the point is this is all good. It’s all focused on the issue and so what will happen is that parties will know wherever they’re litigating, what the funding options are. So I think this has been and will continue to be a game changer in dispute resolution.
