In the fiery political debate on Brexit, relatively little attention has concentrated on the threat to the UK as a world-renowned centre for litigation. Some say that an abyss beckons and that there will be an exodus of litigants fleeing our jurisdiction. Are these fears justified?
For starters, our legal system remains highly respected for its integrity and expertise. Our European neighbours are promoting their credentials as never before, but in truth, many smaller European countries are far from being able to compete in terms of sophistication and true independence. Moreover, English remains the language of international commerce, and this factor alone will continue to have a bearing albeit that the Netherlands and Germany are now developing English-speaking courts.
Stewarts’ Marc Jones discusses the implications of crypto-assets for the litigation sphere
The chances are that in January 2009, when the first bitcoin was mined, nobody reading this article had heard of bitcoin, crypto-currencies, blockchain or smart contracts. Less than a decade later in late 2018, the World Bank raised $110m by selling a ‘blockchain-operated debt instrument’. This instrument runs on a private version of the Ethereum blockchain, which creates, allocates, transfers and manages the bond to maturity using distributed ledger technology.
Stewarts’ Mo Bhaskaran and Pia Mithani discuss the huge growth in international fraud
Fraud thrives in systems that permit secrecy and anonymity. Technological innovation and the continued growth of international trade are allowing fraudsters to use increasingly opaque and complex techniques. The globalisation of finance has allowed such activities to grow to jaw-dropping levels.
Stewarts Law has partly recovered from a 20% drop in turnover last year in what managing partner John Cahill described as a ‘very satisfactory’ year, although partner profits have continued to fall.
The UK’s largest litigation-only firm increased revenue by nearly 11% to £69m in the 2018/19 financial year, following a 20% drop in turnover from £77.9m to £62.4m last year. Profit per equity partner (PEP) decreased a further 16% to £1.2m from last year’s £1.4m: a figure that had dropped 28% the previous year.
On a five-year basis, however, revenue has increased by 49%, with PEP up 7% on average in that time. The firm is aiming for revenue of £100 million by 2022.
Cahill (pictured) commented: ‘We are pleased to post another very satisfactory set of financial results. During the year we have made significant investment in new practice areas including financial crime and media disputes.’
The firm appointed in June last year Richard Kovalevsky QC as a partner to head up the new financial crime department, joining after 13 years at 2 Bedford Row. David Savage also joined the team from SG Kleinwort Hambros Bank recently.
Cahill added: ‘I indicated last year that our revenue patterns would be ‘non-linear’ and that remains the case, although both revenue and PEP have increased over the last five years.’
Stewarts is acting for 58 institutional investors including the BAE Systems pension scheme, the Church Commissioners, Bank of America, the government pension fund of Thailand and the American Red Cross in an on-going case against Tesco. The firm is also representing 280 individuals in a case against Ingenious Media regarding investments in film and video game production partnerships.
The lateral hires market has seen significant moves recently with Dechert hiring more partners from Sidley Austin, Crowell & Moring making another hire from Squire Patton Boggs and Hill Dickinson expanding the firm’s commodities team with two partners.
Dechert added to its global finance and litigation practices with the recruitment of Aparna Sehgal and Simon Fawell from Sidley, following structured finance partner John McGrath, who recently joined from the same firm. Furthermore, Dorothy Cory-Wright was appointed last year as head of disputes and is also from Sidley.
Sehgal is the fourth finance partner Dechert has hired in the last nine months and works with clients from financial institutions, alternative capital providers and corporates on issues concerning multi-jurisdictional transactions, intercreditor issues, acquisition and financing of performing and non-performing loan portfolios, insolvency and enforcement strategies.
Co-leader of the global finance practice group Richard Jones commented: ‘Aparna is a strong addition to our global finance team. Her extensive experience in real estate finance complements our existing capability and strengthens our offering to our financial services clients.’
Gus Black, global co-chair of Dechert’s financial services group, added: ‘Her appointment, which closely follows the additions of John McGrath and Simon Fawell, supports Dechert’s strategic growth plans in London to meet growing client demand.’
Crowell & Moring once again hired from Squire Patton Boggs, recruiting litigation partner Laurence Winston to co-head the firm’s international disputes resolution group. His appointment comes amid a turbulent period for Squires’ London arm, which has been depleted by a number of departures since the beginning of the year, most of which have decamped to Crowell & Moring.
Financial litigation partner and former City head Robert Weekes left for Crowell & Morning in January, and was later joined by insolvency partners Cathryn Williams and Paul Muscutt. Energy partner Robin Baillie and finance partner Andrew Knight also left Squires for Crowell & Moring in February.
Elsewhere, Hill Dickinson announced the hire of Mark Aspinall and Paul Sinnott from Eversheds Sutherland into the commodities team. This follows the recent hire of litigation partner Beth Bradley, previously of Clyde & Co, and takes the number of partners in the group to nine.
Aspinal has expertise in dispute resolution, transactional matters covering trade finance as well as physical trading of steel and non-ferrous metals, shipping fraud, asset tracing and seizure actions. Sinnott, a commodities lawyer in both the physical and derivatives markets working mainly for energy and metals industry clients, focuses on transactional and regulatory matters as well as disputes resolution.
Hill Dickinson head of commodities Jeff Isaacs told Legal Business: ‘We’ve seen a marked uptick in commodities work, particularly on the soft agricultural commodities front where we have a particular specialism. We have plenty to do and we have a strong influx of work and we’re confident about the future.’
Stewarts hired David Savage to its financial crime department from SG Kleinwort Hambros Bank, where he was group senior sanctions officer. Savage follows Richard Kovalevsky QC, who established the firm’s financial crime department in July 2018, and brings experience working in the financial crime within a bank.
Savage told Legal Business: ‘Financial crime compliance is becoming more and more costly. Regulators have cottoned on to the fact that this is a big ticket business that they can extract large sums of money, by way of fines, from various companies. It’s going to be, in the near-term, a huge cost for anyone involved in international business to combat financial crime.’
Finally, DLA Piper also announced a hire in the form of Marine Lallemand, who will join the litigation and regulatory practice in Paris from Orrick Rambaud Martel.
It is fair to say that the volume and nature of commercial disputes generally reflect shifts in the prevailing winds of social, economic and political change. In the ten years since we established commercial litigation at Stewarts, the various forms of upheaval gave rise to a host of high-value, complex litigation and arbitration. This trend of upheaval and dramatic transformation looks set to continue over the next few years.
The financial crisis of a decade ago caught many unaware in terms of its fallout. It was not just another humdrum recession leading to the classic spate of insolvencies and repossessions of the kind we saw in the early 1990s. This was different. Although it gave rise to many claims against professional advisers and other deep-pocketed defendants, many of those who were seen as the cause of the disaster escaped unscathed. They were bailed out or not prosecuted or went unchallenged.
Clive Zietman considers the big trends likely to shape the commercial disputes scene
If I possessed a crystal ball, I would be writing this on a sun-drenched beach somewhere having won the lottery several times in a row. Sadly, I still have to work for a living and that lottery win remains elusive. Despite the huge difficulties in predicting the future, some trends have emerged in litigation practice over the last few years that look set to continue. This article picks up on a few of those trends and contains input from the specialist lawyers in some of my firm’s practice groups about what to look out for in the coming years.
Richard Kovalevsky QC on the difficulties facing prosecutors of financial crime
Following the Bribery Act coming into force on 1 July 2011, commentators focused on the contention that while there was a Rolls-Royce in the garage, prosecutors in the area of corruption and financial crime were using an old Mini as the vehicle of choice. In 2012 and 2013, the sleek well-engineered machine that is the Bribery Act remained unused while the everyday patchwork of existing offences seemed to be the preferred vehicle for prosecutors.
With initial post-referendum Brexit shock giving way to pre-breakaway uncertainty, the boutique and mid-market London firms in the second half of the Legal Business 100 are maintaining a brave front in the face of political and economic uncertainty.
Overall the story is encouraging for London firms in the second 50, with total revenue up 6% to £774m, with an average revenue of £40.7m across the 19 City firms in the second – the same number as last year. Average profit per equity partner (PEP) spiked by 12% to £409,000.