Features

Export-only justice

When Britain’s top lawyers are focused on the world’s most lucrative disputes, can our courts still serve the public interest at home?

8 December 2012

9:00 AM

8 December 2012

9:00 AM

In the last few years lawyers have begun to gush about the ‘Sumption effect’. They were not thinking of Jonathan Sumption QC’s fine legal mind — which was of such a quality that the Supreme Court elevated him straight from the Bar to a seat on the highest court in the land. Nor were they praising his history of the Hundred Years’ War, a conflict of such violence and duplicity that perhaps only an English lawyer could do justice to it. Rather, his peers gazed on his wealth in wonder, and hoped that his riches would flow into their pockets too.

Sumption had collected about £7 million for representing Roman Abramovich in his fight with Boris Berezovsky. The case told commentators much about how hard-faced men moved to divide the spoils after the fall of the Soviet empire. But they barely discussed its most extraordinary aspect. The oligarchs’ dispute was none of our business. It had nothing to do with England. Yet an English judge spent a year considering it, English lawyers made fortunes from its arguments, and English politicians began to salivate at the sight of so much taxable income.

After the abrasive and necessary critiques of the bankers, MPs and journalists, it is high time that we turned our attention to lawyers. Not only are they increasingly calling the shots in public life, but they are presiding over a system in which money determines access to justice.

Berezovsky v. Abramovich was hardly an isolated case. London is becoming a global legal centre: the hub of a roaring international market that is drawing in plutocrats and corporations from every continent. Sumption has had his ‘effect’. In February, the Lawyer (a trade magazine for the profession) reported that QCs were demanding a ‘Russian premium’ of between £800 and £1,000 an hour for bog-standard barristers and £1,500 an hour for the Bar’s stars (with brief fees on top, of course).

You might say that English law has had worldwide reach since the empire. But London’s new globalised law does not confine itself to litigants from the old imperial possessions. It welcomes anyone from anywhere who can pay. In all seriousness, politicians now talk of the law of the land as a foreign exchange earner. Kenneth Clarke, then justice secretary, told City lawyers at Clifford Chance last year, ‘The UK may no longer be able to boast that it is the workshop of the world. But the UK can be lawyer to the world.’ Boris Johnson told the Confederation of British Industry last month that 47 per cent of the world’s legal services exports come from the UK. We should rejoice, he cried, and celebrate the trickle-down effects. ‘Those rouble-fuelled refreshers and retainers find their way into the pockets of chefs and waiters and doormen and janitors and nannies and tutors and actors, and put bread on the tables of some of the poorest and hardest-working -families.’

So keen are ministers to attract passing trade, they provide court services for next to nothing. Oligarchs at the High Court or Court of Appeal pay £1,090 for a trial hearing regardless of its length. The Ministry of Justice suggested last year that it might raise the price, but nothing came of the plan. Like Buckingham Palace and the National Theatre, the law is subsidised by the taxpayer because it brings in the tourists.

[Alt-Text]


It is easy to understand why litigants come. Writing in 1940, George Orwell came as close as he ever could to praising the British establishment. ‘The hanging judge,’ he said, ‘that evil old man in scarlet robe and horse-hair wig, whom nothing short of dynamite will ever teach what century he is living in, but who will at any rate interpret the law according to the books and will in no circumstances take a money bribe is one of the symbolic figures of England.’

So he remains. The average English judge has no instinctive understanding of the importance of freedom of speech, or of rights to protest and rights of association. Since he has had the power to enforce the European Convention on Human Rights, the only right he has enforced with vigour is the right of celebrities to keep their private lives out of the newspapers. Yet for all his double standards and blind spots, the notion that he might take a bribe or obey an unlawful command from a politician is as hard to credit now as in Orwell’s day — for the time being at any rate.

You cannot say the same of judges in Moscow, New Delhi or Beijing, and businesses all over the world know it. One of the most revealing cases of recent years was an action brought by the Russian bank VTB Capital. An English High Court judge said VTB had to pursue its case in Russia. The bank went to the Court of Appeal. It too said VTB had to go to Russia. The distraught bankers appealed again to the Supreme Court, a step that would have occasioned less comment had not VTB been a state-owned Russian bank. Even the Russian state does not trust the Russian courts, and prefers to resolve its disputes here.

One can sympathise with the Russians’ desire to avoid the Putin kleptocracy, but that does not mean that England should welcome allcomers in the pursuit of wealth at any cost.

The Department of Justice’s failure to make oligarchs meet the cost of their cases is suggestive of a wider failure to understand that the law is a business that depends on public support. While they are luring oligarchs to Britain, ministers are cutting judges’ pensions. In a wicked world full of suffering, the hardships of High Court judges on salaries of £173,000 are unlikely to send hot, salty tears streaming down your cheeks. You only have to look at the sums paid to the oligarchs’ lawyers, however, to realise how small the judges’ remuneration packages seem in the well-appointed world of legal London. In the past, a barrister gave up the chance of stupendous fees in return for the generous pension a seat on the bench brought. The state has now broken the old bargain. Judges are talking of returning to private practice, and warning that the next generation of Jonathan Sumptions may not be as ready to abandon private practice for public service. The British state’s determination to chase foreign earnings while lowering public spending threatens the judicial standards that bring in international ‘business’ in the first place.

But, then, the legal trade’s talk of law as a ‘business’ ought to set your teeth on edge. The law is the first public service of a nation. Without it, the public realm and private contracts cannot be policed. Now that the legal profession is seeking to internationalise English law, we risk watching the birth of a special interest that is no longer tied to the nation state. How long will it be before lawyers warn that legal reform threatens a vital export industry?

I heard a hint of what may be coming during the campaign to liberalise the libel laws. It took me a while to realise that this was the first movement for law reform I know of that worked without significant support from lawyers. Individual solicitors did stout service, but the Law Society and Bar Council stayed silent, while Lord Hoffmann and other members of the legal establishment did everything they could to fight us. One of the primary aims of the free-speech movement was to stop Russian oligarchs, Saudi petro-billionaires and Icelandic bankers coming to London and using England’s libel laws to punish critics from all over the world. Libel tourism does not raise much revenue, but the chance for a plutocrat to sponge his reputation clean in the High Court was a part of the package London law firms could supply to the super-rich. If it went, their ‘offer’ would be less enticing.

If you want an example of how dangerous the globalisation of national institutions can be, you need only look at the City. Even after the great crash of 2007/8, and the injection of billions of pounds of taxpayers’ money, the City still argues that reform will threaten its position in the global finance industry. Ministers have listened, and allowed financiers to stop the separation of retail and casino banking.

There is certainly nervousness in legal circles about criticisms of the oligarchs. Mishcon de Reya — once lawyers to Princess Diana, no less — commissioned the original version of this article. Its solicitors had read a column I had written in the Observer on the subject and wanted a ‘challenging piece’ for a magazine they send their clients. When they read it, they found it too challenging by half. They were terrified that a foreign client might take offence. So terrified, in fact, that they killed it.

Here is the paradox of today’s law. Lawyers are everywhere. If a government is embarrassed it calls in a judge to investigate. When a special interest group wants to thwart a government decision, it calls in a judge to review it. Legalistic codes and lawyerly procedures regulate the public and private sectors. It is no exaggeration to say that the law is now stopping us thinking about moral questions. We no longer ask if prisoners should have the right to vote, or citizens should be able to speak as they please. We ask what the law thinks. ‘Is it legal?’ is replacing ‘Is it right?’

Yet at the same time as legal standards flourish, the legal profession of England and Wales is distancing itself from the English and the Welsh. Its best lawyers no longer want to work for them, because they cannot afford the fees. Its judges cannot hear their disputes for months because they are tied up hearing the disputes of oligarchs. Government cuts to legal aid mean that ministers are pushing the poorest in England and Wales outside the rule of law. Those needy and hard-working families whom Boris Johnson wants to cheer on the lawyers cannot receive justice themselves. As for the rest of us, with businesses, investment portfolios and annuities, ministers are already urging us to settle our personal and commercial disputes by arbitration, which is a reasonable way for reasonable people to reach an agreement; but if one of the parties is unreasonable, the middle classes still need good judges and lawyers to intervene.

They are becoming harder to find. When I first looked at the Abramovich case, a senior judge told me that he knew English corporate lawyers who had never represented a human being. Soon we will have English corporate lawyers who have never represented an English company either. If the government and legal profession could stop scouring the planet for fat retainers, they would have the time to ponder a pressing question: whose law is it anyway?


More Spectator for less. Stay informed leading up to the EU referendum and in the aftermath. Subscribe and receive 15 issues delivered for just £15, with full web and app access. Join us.

Show comments
  • Christian Jones

    I heartily concur. The law should return to being the method by which we enforce our democratically agreed morality. Instead it has become the master of determining our morality.

  • Tomothy

    Such a very daft article. I’ll take a few choice comments. Apologies for the long post.

    “Not only are they increasingly calling the shots in public life, but they are presiding over a system in which money determines access to justice.”

    For the love of all that’s holy, Nick, this whole article is moaning about corporate lawyers. Not human rights lawyers. Not public lawyers. Not criminal lawyers. Not small-time contract lawyers. Not personal injury lawyers. Does it really matter if access to justice for large corporates relies, by and large, on paying for competent solicitors and bazzas, particularly when you will most often get the costs back from the other side?

    “The average English judge has no instinctive understanding of the importance of freedom of speech, or of rights to protest and rights of association.”

    While this is a constant bore of yours, Nick, there are hundreds of cases which go your way on these issues, darling.

    “One can sympathise with the Russians’ desire to avoid the Putin kleptocracy, but that does not mean that England should welcome allcomers in the pursuit of wealth at any cost.”

    See, the fundamental problem with this piece is that you have not told us why. Not a single time. Why does it matter a jot to you if one large company decides to sue another large company here? I understand your objection to the way libel works, but who cares if a commercial matter gets settled here? Who is actually harmed?

    “Judges are talking of returning to private practice, and warning that the next generation of Jonathan Sumptions may not be as ready to abandon private practice for public service.”

    It’s beneath you to name them, obviously.

    “Now that the legal profession is seeking to internationalise English law, we risk watching the birth of a special interest that is no longer tied to the nation state.”

    Again: so what.

    “Ministers have listened, and allowed financiers to stop the separation of retail and casino banking.”

    This happened decades ago.

    “They were terrified that a foreign client might take offence. So terrified, in fact, that they killed it.”

    Might have been because it’s shit, Nick. I mean this column was shit when you did it for the Graun a few months back, and it’s still shit in its recycled, Speccie form.

    “We ask what the law thinks. ‘Is it legal?’ is replacing ‘Is it right?’”

    More words-in-mouth toss. We do wonder whether it is right. But we want to know whether doing the right thing (whatever that might be) would be allowed without changing the law. I’m sorry that you can’t get your head around this.

    “Its judges cannot hear their disputes for months because they are tied up hearing the disputes of oligarchs.”

    It’s not as if the High Court is crawling with them, Nick. There are plenty of judges, and long delays have been an unfortunate fact in the English and Welsh legal system for some decades now. Increasing numbers of foreign litigants haven’t had a material effect on this.

    “When I first looked at the Abramovich case, a senior judge told me that he knew English corporate lawyers who had never represented a human being.”

    They are corporate lawyers. That, Nick, is the entire point.

    • Zhaomafan

      I must say I agree with the thrust of Tomothy’s comments. Nick, you know I am normally a fan, but mate, I have to say there’s a bee flying around inside your bonnet on this issue. I hope you are not considering writing an entire book on it, because — unlike your other excellent screeds — that one will be panned except by people with a poor understanding of our legal system.

      And one point which Tomothy did not mention: That paragraph about Mischon de Reya — bad taste, in my view.

      Get over it, and get back to your other important work!!

  • vieuxceps2

    Is this not another way in which the English people are losing their identity? The world has taken the language and now our tongue is “British English”,the immigrants have taken our territory and England is a splinter of the EU and a subordinate part of the “UK”( we come after the Celtic fringes).Now the world has spotted our legal system and has stolen it for themselves.I ought to feel flattered I suppose, but when you spread such things around then they cease to be English and turn into whatever the user wishes them to be.Might be better,but it won’t be English.

    • Tomothy

      No! Give the legal system back! Thief! Mine!

      For fuck’s sake.

      • vieuxceps2

        Well Tomothy,No-one can accuse you of stealing the English language.Is it Esperanto?

        • Tomothy

          It’s a form of Estuarine patois.

          • vieuxceps2

            Take care!That way Blairness lies…….

    • http://www.facebook.com/profile.php?id=1172559644 Matt Fry

      Oh, whiny whine whine. None of the above is true. And I bet some of your family were immigrants at some point.

      • Environmentalist

        I disagree, Vieuxceps makes a very valid point. You on the other hand do not. There is a HUGE difference between having a distant relative that was an immigrant, and the tidal waves of immigrants we see every year enter our country. Only a complete idiot could ignore and dismiss the negative effects of mass immigration as you have done.

      • vieuxceps2

        Matt Fry,Strange thatcomplaints from Ethnics are protests against oppression but English people only ever “whine”?
        !At some point” everyone everywhere was an immigrant,so your point is as worthless as your comment.

    • wanderer

      It is ironic that it is ironic, isn’t it. Jeremy Paxman says that the defining feature of the English is their sense of irony. After all we tried to spread the good English legal system through colonialism and now we can sit at home and the world comes looking for it. I think we should just be happy that such a high quality legal system is spreading and hope that the wonderful all-seeing coalition government writes legislation that protects us from the ‘business’ aspects at home. After all, lawyers are only human like former PMs, bankers and the European Commissars.

  • Golben Amduke

    Dreadful tendentious drivel from someone who has Wikipedia’d the legal profession, rather like Leveson Wikipedia’d the birth of The Independent. About the same level of mob moralising as the Starbucks tax debacle which is a grave issue for the investment community in this country. No reason given why barristers should be come judges, no reason given why corporate lawyers should do something called “rerpesent human beings” whatever that means any more than an advertising executive or an airline pilot should do anything but their job.
    By all means, lets have a country ruled by jelly-logic concepts such as “do the right thing”, whatever some bleeding-heart journalist thinks it is, with their manufactured “public outrage”. Son of Harman’s “court of public opinion”.
    Imagine if we applied the “Is it right” concept to the criminal law – the accused would have no representation. Imagine if we used that as a benchmark for tax policy: we would be like emerging markets countries that use tax disputes and arrests for political ends.
    Nick, have you heard the “the rule of law”? It’s fundamental number one to a functioning country.

  • Hugh

    “In the past, a barrister gave up the chance of stupendous fees in return
    for the generous pension a seat on the bench brought. The state has now
    broken the old bargain.”

    There’s no way you’d give this special pleading anything but mockery if it didn’t happen to support your argument.

    I’m fairly sure there must be better reasons to dislike the legal profession than what you’ve offered here.

  • Balthazar

    Corporate lawyers are specialists in, err, corporate law, it’s hardly surprising that there are many who have never represented a human being. (Most “corporate lawyers” aren’t litigators anyway, so they’ve never represented anything). Do you seriously think Jonathan Sumption would have been doing cheap slipping and tripping cases without that brief?

    Leaving aside income tax, don’t you suspect 20% VAT on all the legal fees billed in Abramovich v Berezovsky was more than enough to balance out the costs to the state?

    London has been a centre for international commercial litigation (principally shipping) for at least a century.

  • Richard McCarthy

    I rarely read what’s written below the line here, but when I do I get the impression evolution has gone into reverse.

  • Siobhan

    That’s a really good thought provoking piece, and I wholeheartedly agree that “is it right?” Is being replaced with “is it legal” and I think that is very worrying indeed!

  • acorn

    Very thought provoking. But a huge mistake to put the loss of morality solidly at the door of the legal profession.
    Trollope (Anthony) ‘What has morality to do with the law?’.
    The gripe is with us and the government/executive. Lawyers should only answer the plain ‘is it legal’. That is their job.
    We choose the government and they make the law. If we don’t like the morality issues we change the law and/or change the government.
    Yes, if the profession is endangering that system, change the laws, increase the pay rates, whatever. Tax their oligarchical earnings 50-100%. Whatever. Charge for the courts at a percentage of the lawyers’ earnings. Be smarter/braver.
    eg. It is Cameron you should criticise for employing Leveson, not Leveson. He has looked at the issues and come up with a legislature view of the solution. Cameron is in the driving seat and has to have the guts to say ‘no’.
    Perhaps the real problem is the cosy club of politicians whose backgrounds are mostly in politics and law anyway. The legal profession and the EU are their pensions.

  • jonah

    These godforsaken Pecksniffs are a scourge on society. Their proliferation augurs ill for a free society. They’re nought but licensed thieves, barnacles on the ship of state.

  • http://twitter.com/theNewsfox Newsfox

    Boy oh boy do lawyers need taking to task. Judges pay is about right, the issue is the utterly insane pay of the barristers. When you let greed run riot in crucial sectors like medicine and law this is what happens. Like finance sector, we have no power over them. Instead we practically beg this self-selecting elite to ‘play nice’ when actually we need to totally re-imagine them.

  • markv

    I completely agree with this perceptive and well timed article. The English legal system and lawyers should not be selling themsleves out to the highest interantional bidders while leaving the rest of the UK behind in the provision of justice and the rule of law.

  • golfclubbore

    What absolute drivel.

  • http://twitter.com/rlpkamath Rahul Kamath

    Nick old bean, sounds like you have an attack of that green plague called envy. Some of our lawyers have found a way to use English law and English courts to adjudicate international disputes. The litigants are treated fairly and the courts/ legal system want to take on the business and earn a pretty penny. I fail to see the problem. Sounds like a significant compliment to our English legal traditions.

  • Salisbury

    This is a very good example of the contrast in how the market and the state respond to circumstance and opportunity. The private, market-driven, part of this equation, ie the barristers, respond by enthusiastically selling their services and upping their fees. Both they and their customers are satisfied. But the state-run part – that is the courts and the court infrastructure – doesn’t even have the wit to increase how much it charges for access, let alone do what any private company would do and increase its capacity to meet growing demand.

  • Independent_Reader

    “English corporate lawyers…had never represented a human being”. That’s because they were corporate lawyers – their job is to represent companies!! It’s like criticising a dentist for never operating on someone’s leg.

    As another commentator has noted already, it is only commercial courts that have been solving foreign disputes. This is not a new phenomenon and indeed I am willing to bet that the proportion of foreign cases in the commercial courts has stayed fairly steady since say 1900. Why’s that? Because in the days of Empire a greater proportion of worldc trade flowed through or was facilitated in London than is the case today, and until comparatively recently (the 1990s in the case of Australia, the 2000s in the case of the Caribbean) the Privy Council was still hearing Commonwealth appeals. International trade needs to be governed by law and it is best for our own economy that this trade is regulated in this country rather than by laws and judges over whom Parliament has no control. If there were no lucrative international work, the number of commercial lawyers and indeed commercial judges in this country would be much smaller, while the desire to stay competitive in terms of the service offered by the courts is an incentive to maintain staffing levels to keep delays to a minimum. Overall, globalisation is therefore a good thing. The negative aspect has more to do with skewing incentives for the brightest young graduates away from a career in say criminal or public law towards a career in commercial law. But twas ever thus. The state’s legal aid payments are never going to match commercial rates when commercial justice is in high demand.

Close
Can't find your Web ID? Click here