Foreword
Summary
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A1
Acknowledgements
Figures and tables
Economic value of English law | Oxera

3.1: Introduction

Published: October 5th 2021
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2.1: Introduction 2.2: Economic value is created by ‘gains from trade’—realised through transactions 2.3: The law underpins growth in the volume of transactions (and therefore the generation of economic value) 2.4: Considering the law as infrastructure on which transactions take place
4.1: Introduction 4.2: English law provides significant value to the UK economy -4.2.1: Maritime sector -4.2.2: Commodity trading -4.2.3: ISDA swaps and derivatives -4.2.4: International insurance contracts -4.2.5: The value of English law to the UK economy is significant 4.3: Risks and opportunities 4.4: Future opportunities for the use of English law represent significant potential value to the UK
5.1: Introduction 5.2: English law suffers from a type of ‘market failure’ 5.3: Solutions to the free-rider problem: coordination across private and public parties 5.4: How to manage the ‘provision’ of English law
A1.1: Maritime sector -A1.1.1: Size of the market -A1.1.2: Overview of governing laws -A1.1.3: Risks and opportunities A1.2: Commodity trading -A1.2.1: Size of the market -A1.2.2: Overview of governing laws -A1.2.3: Risks and opportunities A1.3: ISDA swaps and derivatives -A1.3.1: Size of the market -A1.3.2: Overview of governing laws -A1.3.3: Risks and opportunities A1.4: International insurance contracts -A1.4.1: Size of the market -A1.4.2: Overview of governing laws -A1.4.3: Risks and opportunities
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Chapter 3

3.1: Introduction

In thinking about value, economists usually consider the difference between scenarios (often the ‘factual’—i.e. the observed state of the world—and the ‘counterfactual’—i.e. the state of the world in which the object of interest has changed). In the current instance, the ‘object’ of interest is English law. Under most conceivable states of the world, UK businesses would be likely to use English law for domestic transactions.[1]We note that UK businesses may also use the laws of Scotland and Northern Ireland in domestic transactions—however, the focus of this report is on English law, and specifically on internationally … Continue reading Therefore, it is likely that English law generates a significant portion of its economic value for the UK through its application in internationally mobile transactions—transactions in which parties can choose the law that governs the contract. This is where many risks and opportunities lie.

The mechanisms through which the use of English law for internationally mobile transactions generates value for the UK are discussed in the following subsections.

  • Section 3.2 discusses the value created within the UK legal services ecosystem from the use of English law in internationally mobile transactions. At this stage, it is important to note that the UK legal services ecosystem is a part of the UK economy more broadly, and thus benefits to it should be seen in that light.
  • Section 3.3 concerns the value for the UK economy as a whole from the use of English law in internationally mobile transactions.
  • Section 3.4 outlines how the value for the UK can vary depending on the choice of law and jurisdiction used for these internationally mobile transactions.

References

References
↑1We note that UK businesses may also use the laws of Scotland and Northern Ireland in domestic transactions—however, the focus of this report is on English law, and specifically on internationally mobile transactions governed by English law.