Like the rest of Britain, barristers at the commercial Bar are impatiently waiting for some clarity over Brexit: it is a paramount concern because they want London to retain its position as the premier location for international business disputes. But more than three years on from the referendum result, the much-debated uncertainty has not yet had a significant impact on the volume or value of their work.
‘The commercial Bar is thriving at the moment and I expect it to continue to thrive,’ says Sonia Tolaney QC, chair of The Commercial Bar Association. ‘Dealing with the still-unknown consequences of Brexit presents a challenge. But although there has been a period of real uncertainty, the truth is that the health of the commercial Bar is very strong.’
This upbeat message is echoed by a majority of senior clerks at the large commercial sets. ‘Work levels are very good – they were particularly good in 2018 and have remained healthy through into this year,’ says Tony Burgess, joint senior clerk at Brick Court Chambers. ‘We continue to be very busy,’ concurs Alex Taylor, senior clerk at Fountain Court Chambers.
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Meanwhile, Darren Burrows, senior clerk at One Essex Court, concludes: ‘We have managed, over the last 12 months in particular, to enjoy full levels of activity for as many members of chambers as possible. Notwithstanding the socio-political winds of Brexit, I can’t recall us being busier.’
However, there are some who perceive a dip in activity. ‘In speaking to a number of firms of solicitors about what’s going on in the market, they are telling me that they are a bit quieter than they have been recently, which is roughly what the commercial Bar is experiencing,’ says Bernie Hyatt, joint senior clerk at 7 King’s Bench Walk. ‘All of us would say that commercial activities are a bit quieter than we would like. But nevertheless, it’s been strong.’
At 3 Verulam Buildings (3VB), senior practice manager Steve Penson adds: ‘The litigation market is pretty healthy. It’s been a good, but slightly unusual year for us in terms of trying to quantify trends because we have been so active in the recruitment of members, so that has naturally skewed numbers and work trends. Over the course of 2018, we recruited seven members from 39 Essex Chambers.’ More recently, another barrister joined 3VB from Outer Temple Chambers, and in June, two more followed from Littleton Chambers.
Competition between sets both for premium work and the best talent remains as strong as ever. ‘At the Bar, and particularly at the commercial Bar, the brands of each set are very mature and instantly recognisable,’ notes Burgess. ‘The jewel in our crown, and one that most members of Brick Court hold very dear, is domestic commercial litigation.’
As the type of work undertaken by the commercial Bar continues to evolve and diversify, the traditional commercial Bar/chancery Bar divide has become ever-more blurred. A number of sets have a foot in both camps, with commercial sets increasingly recruiting commercial chancery barristers. It’s a two-way street: in a move described as ‘underlining the set’s equal strengths in both chancery and commercial disciplines’, Zoe O’Sullivan QC joined Serle Court from One Essex Court in March.
‘Our business clients are increasingly disregarding the distinction between commercial and chancery: the divide is becoming increasingly irrelevant and anachronistic,’ says John Petrie, chief executive of Serle Court. ‘They see problems, for which they require solutions. It is unsurprising that the commercial sets are now seeking to recruit commercial chancery practitioners.’ At Maitland Chambers, senior clerk John Wiggs adds: ‘We’re probably the most commercial out of all the chancery sets now, but we are very conscious to keep our chancery core, which sets us apart from the purely commercial sets. These things evolve in a way that you don’t necessarily plan.’
‘In whatever form’
So what is keeping them all busy? The first word on the lips of many senior clerks is fraud. Hyatt says: ‘The majority of our work is commercial litigation, particularly insurance and shipping – that’s how people see us. But we are far beyond that. For example, we’re doing a great deal of significant civil fraud and auditors negligence work.’
Paul Dennison, joint senior clerk at Brick Court adds: ‘The predominant feature in the market has been fraud in whatever form, either in litigation or arbitration: fraudulent misrepresentation, banking fraud, energy fraud, unlawful means conspiracy. The genesis of most of this work emanates from Russia, Ukraine and the CIS. It is very fruitful. Fraud is now such a broad church and we are seeing that being the dominant feature of all the big-ticket stuff we are doing.’
‘At the Bar, and particularly at the commercial Bar, the brands of each set are very mature and instantly recognisable.’
Tony Burgess, Brick Court Chambers
His analysis is echoed by Taylor, who is also seeing a lot of civil fraud. ‘There are still a number of high-profile cases – Russian, Ukrainian, CIS – out in the market, and a bit from the Middle East,’ he says. ‘But we are seeing new cases being brought all the time, often with a very significant fraud component.’ Citing the recent collapse of Carillion as an example, he notes that work arising from regulatory investigations – particularly The Financial Reporting Council (FRC) and the Financial Conduct Authority (FCA) – is also ‘very active.’
Joe Ferrigno, Essex Court Chambers’ senior clerk, agrees: ‘We see a lot more civil fraud across many practice areas, in shipping cases: asset tracing, enforcement, injunctive relief, and big complex banking trials. There is a plethora of work. Several years ago, we launched a sophisticated business development campaign coupled with an unprecedented targeted lateral hiring of juniors in the commercial chancery space – the civil fraud chancery practice area which crosses over with banking work. It’s been such a success for us which we have yet again demonstrated with the recent acquisition of Tim Akkouh from Erskine Chambers.’
Burrows notes that the top commercial sets have ‘recruited wisely and massively upped their game in terms of marketing and business development with both their domestic and international client base. If you do not continually strengthen the resources that you have available to provide clients with a dynamic service in areas where they are busy, then you are not going to be able to react to market fluctuations, or at least spikes in activity’.
Of course, fraud is not the only show in town. ‘3VB has always been very aligned with the regulatory space – banking and finance work, FCA and Prudential Regulation Authority regulation,’ says Penson. Despite the consensus view that banking litigation work in London has now markedly declined, he says that ‘banking and finance is a huge space for us and that will continue. The banking industry is under huge scrutiny and they are looking for assistance. We have good experience of working for the banks, which remains our bread and butter, but also for claimants. We have also benefited from trends in the legal market, where some solicitors have moved from large firms to boutiques’.
Burrows identifies another key sector: ‘We have a lot of instructions in energy, oil and gas – much of it in arbitration. Many companies that we work for directly are engaged internationally. Our energy work has evolved along with the market, so members now find themselves in arbitrations in Stockholm, Lagos, or Singapore. That type of work was always out there, but as large energy companies have stretched their tentacles across the globe, the international commercial disputes work has followed. The skills of a commercial barrister are very portable and that has meant them appearing in a wide range of overseas seats to assist in those disputes.’
While many of the top commercial sets are engaged in international arbitrations outside the UK or in local foreign courts, most notably in Caribbean jurisdictions, estimates for the volume of litigation in London where one or more of the parties is not UK-based range between 65% and 75%. No-one anticipates that will change any time soon.
‘A lot of the international arbitration work we do involves foreign entities, but they still like London as the port of call to settle their disputes,’ says Hyatt. ‘Most of our work involves international clients,’ agrees Ferrigno. ‘Whether an insolvent Russian bank, conspiracy claims originating from the Middle East, a fraud claim involving a Chinese yard or commodities buyer. The shared connection between our global clients is that they want their disputes resolved in London.’
Another key factor driving the London litigation market is ‘the rise in follow-on damages litigation in competition law,’ according to Burgess. ‘It’s been one of the major boosts in recent years.’ A raft of damage claims has followed the European Commission’s recent truck cartel decision. ‘There is an impetus of American-style litigation: people gathering groups together to challenge large institutions,’ says Penson.
The rise of this type of litigation is fuelled by third-party funders, suggests Taylor at Fountain Court, which has been acting for DAF in the Competition Appeal Tribunal. He says: ‘It is a perfect storm because without the funders, these claims would not easily or necessarily be getting off the ground. They appear to have been interested in backing a number of these cases.’
The emergence of funders is ‘important to the market,’ agrees Hyatt. ‘They are making a huge impact. We see it in many areas of our commercial work: funding is huge.’
Wiggs adds: ‘We work closely with certain funders. We’ve definitely seen an upturn in litigation where cases have been funded. Otherwise, they would have died a death because either it didn’t make financial sense to run them or no-one could afford them in the first place. Whereas if funders are taking the risk away, even if your win becomes diluted because they take a slice of the pie, it can still make financial sense. That has been a really positive thing for the litigation market.’
There is no doubt that some regional QCs offer better value and comparable expertise across a range of commercial disputes. But the highly-specialist work of the top London sets operates at a truly international level. ‘The commercial Bar has a significant international presence with strong relationships all over the world,’ says Tolaney, who has ‘no doubt that those international relationships will continue to flourish regardless of Brexit’. With resilience at home and abroad, there is much to suggest – for now at least – that any foreseeable turbulence coming the way of the UK Bar is likely to be a storm in a teacup. LB
Standing firm – the regional Bar view
‘Manchester is the most important legal centre outside London: no case is too big for the regions.’
Lesley Anderson QC, Kings Chambers
The Bar continues to thrive outside London, particularly in the two main hubs for commercial litigation, Manchester and Birmingham. Exchange Chambers in Manchester is a multidisciplinary set of 160 barristers with a strong commercial litigation practice. Exchange’s head, Bill Braithwaite QC, says: ‘I believe we are one of the most commercially-managed sets in the country. To survive at the Bar, you have to be commercial. We turn over nearly £35m; we’re a proper business.’ Double-digit revenue growth has characterised Exchange’s performance in recent years. ‘Growth is driven by commercial awareness: to compete in the market and to survive, you have to run efficiently,’ he says.
Although much of their commercial work is regional – from Exchange’s three offices in Manchester, Liverpool and Leeds – some is international. Exchange has been instructed on the trucks litigation and on the emissions litigation involving VW, for example. Braithwaite is looking to open in London, possibly by merging with another set. ‘It has to be good quality with a bit of a brand,’ he says. ‘We are multidisciplinary so it would have to want to be multidisciplinary – that’s the plan.’
Also in Manchester, with over 100 barristers, Kings Chambers has ‘a very strong reputation and tradition in commercial work, especially sports,’ says Lesley Anderson QC, head of its business and property group. ‘A lot of it is in arbitration: disputes between footballers/agents/clubs, or other contractual disputes. We are seeing more instructions relating to disciplinary and regulatory proceedings in a wide variety of sports, both in the UK and Switzerland.’
Kings is also busy in other areas of dispute. ‘Nearly all of our cases are against London counsel,’ she notes. ‘Manchester is the most important legal centre outside London: no case is too big for the regions. Probably even Birmingham would accept that!’
At No5 Chambers in Birmingham, the largest chambers in the UK with more than 250 barristers, chief executive and director of clerking Tony McDaid points to its latest figures as evidence of success: 7% annual growth and a turnover of £50m. ‘The commercial group has seen a 13% increase on the previous year. We are attracting a lot of work in London, (where they have been for 15 years), doing some big cases there, but also in Birmingham. A number of Midlands-based disputes that would ordinarily have gone to London have remained in Birmingham – a big advantage for us. The London office has 70 barristers, which is as large as many sets.’ No5 also receives international instructions. ‘We’ve attracted people like Mohammed Zaman QC, who was the shining star at St Philips Chambers. He has completed about 15 international arbitrations in Dubai and he is regularly back and forth to Pakistan, Dubai, and Cayman.’