The Independent reported on Friday 27th June that under a Labour Government ‘foreign litigants would in future have to pay a “fair price” to use the court service’.
The argument for this strategy is based on the fact that currently foreign plaintiffs pay just a fraction of the real costs of bringing a case through England’s commercial court system – on average just £1,930 a case. Whilst, according to The Independent, high-value litigation cases make ‘millions of pounds each year for City law firms… the cost of court hearings is effectively being subsidised by the taxpayer.’
Whilst increasing the cost of hearings may theoretically raise more funds for our Courts, what happens if it were actually to turn people away instead to other growing dispute resolution centres such as Singapore, Paris or the Gulf?
The UK and London in particular is regarded as the world’s leading centre for international legal services. In January this year, TheCityUK launched its Legal Services 2014 report. The report stated that the UK leads the way as the world’s most international law centre. In addition, the UK accounts for around 7% of global law firms’ fee revenue, making it by far the largest market in Europe.
Indeed, according to the report the ‘value of the legal services sector to the UK economy doubled in the last decade has increased from £15.8bn in 2002 to £20.4bn (1.5% of GDP) in 2012. Gross fees generated by law firms in the UK increased by 5% in the financial year 2012/2013 to £28.5bn.’
The vast growth in the legal sector has been helped no doubt by the high numbers of litigants from outside the UK settling their disputes over here. The Financial Times recently reported that more than three-quarters of those who use London’s commercial court to settle disputes are from outside the UK.
So why then would Labour put forward a policy that may stunt this growth? In response to concerns that raising court fees may deter litigants from using the British legal system, the article quoted an inside Labour source as saying “It is ironic that foreigners have greater access to British justice than British people.”
As a global bastion of the law and legal rights hopefully the sector will continue to grow in the future, both nationally and internationally. However, does our international reputation as the ‘go to’ dispute resolution centre come at a detriment to British citizens? Do foreign litigants really restrict UK citizen from justice? And can we really afford to implement policies that may actually hinder a growing sector of the economy?
Whether or not these proposals ever come to fruition is of course another debate entirely – but it does raise interesting questions.