Skip to Content


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.

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?

Show comments