‘An underappreciated asset’ – beefed-up body LegalUK quantifies economic value of English law for first time
Judiciary-backed group relaunches with heavyweight report funded by firms including Allen & Overy, Clifford Chance, DLA Piper and Herbert Smith Freehills
English law underpins trillions of dollars of business annually, according to new research accompanying the relaunch of beefed-up lobbying group LegalUK, which has secured the support of the judiciary, professional representative bodies and an array of top law firms.
The report by economics consultancy Oxera is the first to explore the economic value of English and Welsh law. It reveals that English law was used in more than €66trn of derivatives trading, $11.6trn of metals trading and £250bn of global M&A transactions in 2019, while also supporting £80bn of insurance contracts and £15bn of maritime contracts.
Tasked by the Lord Chief Justice, Lord Burnett, LegalUK is chaired by Dame Elizabeth Gloster, an arbitrator at One Essex Court and former appellate judge. Directors include former Allen & Overy senior partner Guy Beringer, legal futurologist Professor Richard Susskind and Mishcon de Reya marketing supremo, Elliot Moss.
The report was funded by various City law firms including A&O, Clifford Chance, DLA Piper and Herbert Smith Freehills; and barristers’ chambers including Blackstone, Twenty Essex and Wilberforce.
Gloster said the role of law in creating economic value – and as a source of soft power – had not been fully appreciated. “It is vital that government appreciates what a valuable economic asset English law is, not just to the legal services industry, but to the wider UK economy,” she said. "The report comes at a very opportune moment for the new justice secretary, Dominic Raab, because [it] demonstrates, in my mind, …the need for the government, as well as the profession, to take advantage of the innovative force that English law provides."
She added that the report was "a useful moment to reframe the debate from Brexit itself, to the opportunities that Britain, and in particular England and Wales, offer the wider world; both in the EU as well as wider afield”.
Gloster denied that rival jurisdictions, Dubai and Singapore, were close competitors to the UK, noting: "There are obviously reforms going on in Dubai, but in the DIFC, in Abu Dhabi's Global Markets Court, and Singapore, all three use the common law, that is, English law, as the basis of their offering. English law is fundamental to the operation of many of the contracts that these rival courts and hearing centres deal with. They have used their legislation to engraft their legal principles on it, but the fundamental platform in common law jurisdictions is that of English law, which is an asset that shouldn't be left hidden."
Beringer said: "It is extraordinary to see laid out in economic terms the extent to which English law is an underappreciated asset. [It is] a platform that provides huge economic value to the UK and the global economy. The fact that English law continuously evolves to reflect the issues businesses face is key to its success."
David Jevons of Oxera said that targeted investment would be needed to target the economic 'free-rider' problem, to "support and promote English law to the extent that would maximise the overall benefits to the UK from [its] use."
Susskind added there was also "a clear opportunity" to develop legal technology that could overcome that issue, and that it was "critical in the UK's future competitive positioning".
A failure to invest, Gloster warned, would also give rise to significant risk of increasing levels of competition from other jurisdictions, adding "we mustn't be complacent" in ensuring "the asset we have isn't devalued, as it does need sustaining."
LegalUK is supported by the Law Society and the Bar Council, which previously endorsed campaigns promoting post-Brexit England and Wales as a jurisdiction of choice when LegalUK was founded in 2017.
The report marks the first time City lawyers, judges and commercial sets have promoted English law as a governing law of choice and a national asset, at a time when the UK government is keen to promote post-Brexit trading opportunities.
Other LegalUK directors include respected CMS partner Richard Bamforth, chair of London International Disputes Week, former Standard Chartered GC Helen Dodds and ex-RPC arbitrator Jonathan Wood.