Justice system woes undermine London as commercial legal hub, Bar Council warns

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England’s position as a global hub for corporate litigation and legal services risks being undermined by “atrocious” problems elsewhere in the justice system, the chair of the Bar Council has warned.

Sam Townend KC said multinational companies and investors that flock to the country — and London in particular — for legal redress would increasingly look to other jurisdictions if the cash-strapped criminal and family courts system deteriorated further.

The chronic delays, court closures and maintenance problems that bedevil publicly funded legal work have largely not troubled high-end commercial cases. However, Townend told the Financial Times that the whole sector was “underpinned” by a properly functioning justice system.

“You can’t put one part of it in a gilded cage and let everything else fail and still expect to maintain” an international reputation, Townend said.

The chair of the Bar Council, which represents 18,000 barristers, warned that a pipeline of legal talent depended on lower courts functioning properly and that poor facilities ultimately contributed to a shortage of judges.

“If the conditions that you’re working in are atrocious, that will undermine your morale and you’ll be less inclined to stick with that job.”

Townend said Southwark Crown Court, a centre for white-collar crime cases, was marred by “stains on the carpet, conference facilities not available”.

“What impression does that give to users? Do we take their dispute — their problem — seriously?”

Venues that hear the highest-profile civil cases — including the grandiose Royal Courts of Justice in central London — are mostly in better shape, although Townend noted that the newer Rolls Building nearby was hit by a power cut last month.

He said the commercial sector remained in rude health: the UK’s legal services industry is the largest in Europe and second only to the US globally, according to research by financial services group TheCityUK. The sector produced £43.7bn in revenues in 2022.

Lawyers say international business is attracted by predictable legal frameworks, adjudicated by proficient judges, and a centuries-old respect for the rule of law.

About three in five litigants involved in proceedings at London’s commercial courts in the year to March 2023 were not from the UK, according to a study by Portland, a communications company.

But lawyers warn that much of the rest of the justice system is facing a crisis.

The Ministry of Justice has been among the worst-hit departments from government austerity, its budget having declined about 14.5 per cent in real terms since 2009, according to the Institute for Fiscal Studies think-tank.

About 66,500 cases are waiting to be heard in the crown court, which deals with the most serious criminal cases, and the Institute for Public Policy Research estimates the backlog will “remain substantially longer than pre-pandemic levels for up to a decade”.

The physical state of the court estate is contributing to the delays, Townend said. More than half of all courts closed between 2010 and 2019, according to the Law Society, which represents solicitors.

HM Courts and Tribunals Service is encouraging more hearings to be heard online as part of a modernisation drive.

But in many areas “there’s neither the local facility any more nor is it the case that there are readily accessible digital services from the front to end of a dispute”, Townend said.

Lawyers also complain that in the courts that remain they regularly encounter leaks, mould and broken bathroom facilities.

Townend said Sheffield crown court was shut last month after a burst pipe caused a significant flood while Blackpool magistrates’ court was closed following the discovery of reinforced autoclaved aerated concrete, or Raac.

Other national jurisdictions were establishing themselves as dispute resolution centres, Townend warned, including Saudi Arabia, Abu Dhabi and India.

“They are competing with us with excellent new facilities. International parties involved in international transactions have a choice as to how they have their disputes resolved. They may decide no longer to choose England and Wales.”

Investments that the government is making include a new 18-courtroom complex under construction off Fleet Street in London that will focus on fraud and cyber crime.

Townend said such plans were welcome, but warned “it’s just not enough. It doesn’t meet the scale of the problem.

“There needs to be a wholesale change in political appetite to address the massive and present needs of the justice system.”

The Ministry of Justice said: “The UK continues to be a global hub for litigation and legal services. In 2022 the sector contributed £34bn to our economy and the commercial courts saw a record number of international litigants.”