English Law: the Platform for International Business.
While the UK embraces new global trade agreements we should not forget the business platform that facilitates these and which we in the UK have shared with the world for centuries – the English law itself.
A recent report commissioned by LegalUK – a group drawn from major stakeholders across the UK legal sector – and produced by the economic consultancy Oxera (https://legaluk.org/wp-content/uploads/2021/09/The-value-of-English-law-to-the-UK-economy.pdf) demonstrates the economic value of English law, both to the UK and as a fundamental platform for international business. English law provides a global infrastructure for the trade, financial and commercial contracts on which international business relies, and its common use lowers transaction costs and provides network effect benefits for internationally mobile transactions. It governs contracts supporting USD trillions of OTC derivatives, global metals trades, M&A transactions and insurance contracts each year. It makes available commercial practices and concepts, such as netting and trusts, to business users from countries without these in their local laws. It facilitates the use of novel and innovative structures such as smart contracts. Businesses do not need to be located in the UK to enjoy these benefits – English law contracts with their clarity, certainty, predictability and flexibility are available to all. And when legal disputes about English law contracts occur, and English law needs to be interpreted and adjudicated on, this can be done from access points all over the world.
English law is the source of domestic law in over 80 jurisdictions around the world. Many English precedents and principles are globally familiar. Some legal systems have English judges sitting in their highest courts – including in Hong Kong, Singapore, Dubai and Abu Dhabi. Lawyers in countries around the world have studied English, as well as their domestic, law. A 2021 study of 26 common law jurisdictions published by Mishcon de Reya and vLex Justis showed that from 1717 to 2020 English law was cited 313, 111 times by foreign courts (with the nearest competitor being cited 12,156 times). But in addition to using English influenced local law, businesses anywhere in the world can easily access English law itself in a variety of ways.
It is straightforward for international business to have their English law cases decided in the Commercial Court in London. With the move to remote hearings it is now easier than ever for overseas businesses to access the Commercial Court from their home locations.
A traditional alternative is international arbitration. A large proportion of international arbitrations are decided under English law. Businesses can use UK arbitration institutions such as the LCIA and the LMAA, or those with branches in the UK such as ICC, and again can now easily do so online and remotely from their home locations. In fact arbitrations can be legally based and hearings can take place anywhere that works for the parties and English law arbitrations can be administered from abroad. English law is the second most chosen law of arbitrations administered – on the other side of the world from the UK – by both the Singapore and Hong Kong International Arbitration Centres.
A newer alternative is to use one of the international commercial courts established abroad with English law as their legal basis (the Dubai International Financial Centre Courts) or which adopt English law wholesale (the Abu Dhabi Global Markets Court), or which will hear cases governed by a range of foreign laws (the Singapore International Commercial Court).
English law has achieved this ubiquity and ease of access without any strategic plan – markets and international businesses and jurisdictions have adopted it because it works for them and continues to evolve to meet the challenges of a digitising world. International businesses should be alert to the benefits of English law being provided seamlessly around the world, in or from the UK but also nearer to home as other countries recognise the benefits of providing internationally located venues for resolution of English law disputes. As we see from the readiness of other countries to take on the administration of English law governed cases, from the Far East to the Gulf, international businesses can enjoy the significant benefits of English law from the comfort of their own locations, wherever those are.