Foreword
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Economic value of English law | Oxera

3.3: The economic value created for the UK as a whole

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

3.3: The economic value created for the UK as a whole

The previous subsection considered the value that English law brings to the legal services ecosystem (itself part of the UK economy). However, the export of English law generates significant value for the UK beyond the bounds of the legal services ecosystem. We identify three mechanisms through which the export of English law creates value for the UK and provides the foundations for the development of globally significant UK-based markets such as financial markets and instrument trading.

  • English law is often one of the first to provide solutions to complex market issues, driving greater volumes of transactions under English law as a global market standard. This in turn provides certainty and predictability in the law and allows the law to evolve continuously to reflect the issues that businesses face.
  • Knowledge sharing through agglomeration effects increases the productivity, innovation and competitiveness of the UK economy.
  • The widespread use of English law globally reduces transaction costs for UK businesses trading internationally.