Duelling dragons – the Asia disputes outlook


Hong Kong remains Asia’s disputes capital but Singapore continues to close the gap with sustained investment attracting more litigation and arbitration work

For so long the epicentre of dispute resolution in Asia, events have conspired in recent history to undermine Hong Kong’s status. Two years ago, hundreds of members of the judiciary led a silent march in response to a diktat from Beijing challenging the judicial independence of Hong Kong from the mainland. It was the start of what became known as the ‘umbrella movement’ protests.

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Everything must go – the London arbitration price war


There is a price war raging in the London arbitration market that has led law firm leaders to question their commitment to the practice. Is the bubble bursting?

Arbitration was a practice area until recently seen by many managing partners as reliably high margin and partner-driven but for how much longer? According to a growing number of industry veterans, a softening arbitration market has resulted in a spate of lowballing, particularly in London. While the average legal cost of arbitration at the International Centre for Settlement of Investment Disputes (ICSID) stands at $4.5m, according to a 2014 report by Allen & Overy, some advisers are winning work by promising to run the entire case for less than a tenth of that sum. While such claims are anecdotal, the Lebanese government recently released pitch information that showed 11 international law firms had pitched between $350,000 and $1m to defend it against an ICSID claim. The lowest bidder, Paris-based Bredin Prat, won the instruction.

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Perspectives: Toby Landau QC


I have been incredibly fortunate in my career. I feel that very strongly.

I come from a long line of doctors. It wasn’t my calling. Around 14, I got interested in law. I’ve always been argumentative and difficult. I grew up in North West London. There’s German on both sides of my family. All refugees. Striving and ambitious.

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Perspectives: Robert Khuzami


My parents were professional ballroom dancers. My father managed the Arthur Murray studios on 5th Avenue. They met in the office and had a secret relationship. One day they got on the subway down to City Hall and got married on their lunch hour. Have you heard the saying: ‘The cobbler’s son goes shoeless?’ Well, the dancing instructor’s son went without dancing ability!

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Judging the judges – identifying the stand-outs among the judiciary


The good, the bad and the ugly – we asked litigators to identify the judges that – for better or worse – stand out among the judiciary

The 2016 Legal Business judicial survey was not just focused on the overall strengths and weaknesses of the judiciary, it also asked respondents for their views on individual judges they have appeared before. There were some obvious favourites, and one outright villain (no prizes for guessing), and somewhere in between were several judges who impressed and disappointed in equal measure.

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Herbert Smith Freehills: Are UK disputes heading for the Brexit?


Alan Watts

Partner, Herbert Smith Freehills


Well, we are where we are. ‘Brexit means Brexit’. The legal profession, in the very near term, stands to benefit. Clients, whether internal or external, will need comprehensive advice on how Brexit may affect their operations. From due diligence reviews aimed at uncovering Brexit sensitivities, to help formulating arguments for lobbying purposes and devising alternative structures, business for advisory and compliance practitioners will be increasingly brisk. Clients conducting Brexit due diligence may also require assistance in reviewing existing contracts for any terms that may be affected by Brexit, and seeking to agree amendments before a dispute arises. Courts may start to see an influx of litigation as parties seek to clarify the impact of Brexit on their contractual obligations, though it may be some time before Brexit-related litigation really gets going. Lawyers will be among the most influential advisers to government over the withdrawal from the EU and the policy agenda going forward. Our profession will have a real opportunity to influence and shape the legal landscape and future reciprocal arrangements not only in post-Brexit Britain but in other member states of the EU and further afield.

But what will Brexit mean for lawyers, and disputes practitioners specifically, over the longer term?

Pessimists are well catered for. A report commissioned by the Law Society, published prior to the referendum, predicted gloom for the legal sector in the event of Brexit. It found that even in the best-case scenario the sector would suffer losses to output and employment, and in the worst case could see a £1.7bn fall in annual output. It also found that the most negative effects on the legal services sector would be due to the sector’s reliance on intermediate demand from sectors that are likely to be adversely affected by Brexit, particularly the financial services sector and other professional services, and from the subsequent lower levels of business investment.

While that environment may adversely affect some UK-facing transactional activity in the short term, countervailing factors such as currency fluctuations may, however, have a rebalancing effect to some degree. And although, of course, in time there is the possibility of some clients seeing the need to relocate parts of their operations outside of the UK altogether, the overwhelming attitude remains one of wait and see, at least for the time being.

Firms operating within the UK seem less able to adjust to the effects of Brexit than those with an international network.

That there will be challenges for our industry to overcome is inevitable. It does seem likely that the effect on clients will be among the chief driving factors of the health of the legal sector and should clients relocate their businesses to Ireland or the continent, they will take with them some demand for legal services from the UK. Companies taking a wait-and-see approach may avoid big-ticket transactions or taking risks in the UK. In-house legal budgets and resources may be diverted away from litigation and toward tackling the business-wide implications of Brexit. Firms operating largely within the UK seem likely to be less able to adjust to the effects of Brexit than those with an international network. Any removal of freedom of movement will hinder the ability to move lawyers freely around a firm to meet business demands.

Further, there will be those who seek to suggest that a choice of English jurisdiction is no longer wise because of the risks that the recast Brussels Regulation will no longer apply between the UK and EU countries. None of this will be lost on London’s competitors in elite international dispute resolution, and we can expect the likes of Dubai, Singapore and New York to try to take advantage of any uncertainty around such issues and Brexit more generally and position themselves as a safer choice for sophisticated disputes.

Nevertheless, there is cause for optimism. The core principles of English contract law, such as interpretation of contracts and remedies for breach, remain unaffected by Brexit. The respect of English law for parties’ freedom of contract will make it a perennial favourite for commercial entities, and perhaps more so in light of the flexibility parties may choose to build into their agreements due to Brexit. The integrity and specialised expertise of the judiciary is unchanged, and parties will continue to enjoy access to high-quality legal advisers, litigation support services and first-class facilities. There is much to recommend London as a centre for dispute resolution and there are alternatives to the Brussels Regulation as discussed below. Statistics repeatedly show that London is an entrenched choice of parties for both arbitration and litigation. We in the profession have an important role in ensuring it remains so.

As disputes lawyers we can educate our clients and colleagues about the potential impact of Brexit upon dispute resolution in London. Parties should also be mindful of the dispute resolution clauses they wish to include in contracts should they be seeking enforcement in an EU member state. Although it is not clear at this stage what arrangements will replace the current regime, it seems inevitable that some arrangements will be put in place to safeguard mutual enforcement for the benefit of the UK and the remaining EU member states, particularly as enforcement is a two-way street. Nonetheless, where it may be necessary to enforce in an EU member state and there is any uncertainty as to that member state’s approach in the absence of specific arrangements, parties may wish to consider alternative arrangements, such as arbitration in London. Enforcement of an arbitral award will be governed by the familiar and well-established New York convention, upon which Brexit will have no impact. Disputes lawyers can also ensure clients are aware of the benefits of litigating in London, and keep the risks regarding the enforceability of judgments in perspective. Ultimately it is a question of balancing what are likely to be modest risks against the benefits of English law and London as a premier centre of excellence for dispute resolution.

We in the profession also have an important role to play as advocates of the English legal system. Industry regulators and professional bodies should work together to ensure that in the negotiations around Brexit the position and importance of the legal sector is not forgotten, not only because of the contribution the sector makes to the economy in its own right but because of the supporting role it plays to businesses and commercial parties across all sectors (and in particular financial services).

Of immediate concern should be a sensible solution to the issue of enforcement so as to preserve England’s attractiveness as a jurisdiction and competitive advantage as a dispute resolution centre. The UK could, for example, negotiate to join the Lugano Convention 2007. This applies currently to Norway, Switzerland and Iceland, and includes broadly the same terms as the Brussels I Regulation. While this would mean that parties would be unable to benefit from certain improvements introduced by the recast Brussels Regulation, it would nevertheless provide commercial certainty for parties and lawyers under a familiar regime. Failing this, the UK could seek to join the Hague Convention on Choice of Court Agreements, a multilateral treaty which currently applies only to the EU, Mexico, and soon, Singapore. This applies only to those disputes subject to an exclusive jurisdiction clause, so is necessarily restrictive.

While Brexit may offer opportunities for disputes lawyers in the short term, its longer-term effects are more unpredictable. While issues over enforcement, etc, will no doubt be dealt with in negotiations, the uncertainty that Brexit brings with it and the extended period over which that uncertainty will last could present real challenges. Businesses may not only be less willing to invest in litigation but also less willing to invest and do deals in the UK while that uncertainty remains. The fewer domestic transactions that are done today means the fewer UK-focused disputes there are likely to be in the future. It is therefore important that we and our transactional colleagues continue to advocate the advantages of English law and the English courts in international transactions.

Alan Watts is experienced in all forms of dispute resolution, including High Court litigation, arbitration and mediation proceedings. He was appointed in December 2015 as the firm’s new head of commercial litigation in London.


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Rack and ruin – the 2016 judicial survey


Funding cuts are putting the judiciary’s status as a world leader under pressure. Canvassing the profession, we find deep concern over prospects for the English courts

Who wants to be a High Court judge? Fewer than ever it seems. This, unsurprisingly, is a major concern for the UK’s top litigators.

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Travers Smith: The rise and rise of competition litigation in England – what might the future hold in a brave new post-Brexit world?


Caroline Edwards

Partner, Travers Smith


The reputation of London as a jurisdiction of choice for private competition damages claims is well documented. Recent developments had looked like cementing London’s status even further. These include:

  • Substantial reforms of the competition private actions regime in the UK introduced by the new Consumer Rights Act with effect from 1 October 2015, which has materially expanded the jurisdiction of the Competition Appeal Tribunal to hear private action damages claims and introduced both opt-in and (for UK-domiciled claimants) opt-out class actions, as well as the possibility of collective settlements for collective damages actions.
  • The implementation of the new EU Damages Directive* which is supposed to be implemented by the end of this year. The intention of the Directive is to make it easier for claimants to bring competition damages claims and to harmonise the minimum standard for such claims which are required to be met across the EU. Those standards include certain rebuttable presumptions (for example, as to pass-on) and the requirement to introduce a disclosure regime. In theory, the introduction of a minimum standard might mean that other EU jurisdictions become more attractive destinations to bring a claim than they may previously have been. However, the fact that many aspects of the EU Damages Directive have long formed part of English law (much of the Directive was modelled on the English system) such that England already has an experienced judiciary (and experienced body of legal practitioners), well versed in matters such as disclosure, means that England could expect to retain its status as a go-to jurisdiction following implementation.
  • Recent significant judgments from the English courts, including on issues such as disclosure, limitation and the territorial limits of claims, which have served to develop further English law jurisprudence and to clarify the law in this field, providing greater certainty to litigants.

In 2016 alone, Commission fines for cartel infringements have already exceeded €3bn. On these figures, plus the well-publicised £14bn claim which it is understood will be brought by way of class action against MasterCard on the horizon, the future of cartel damages disputes in England had looked to be well settled. However, following the referendum on 23 June 2016, the question now, naturally, is what the future holds for England as a destination for these claims.

While Brexit may mean Brexit, it is still far too early to tell what the impact will be on London’s status as a premier destination to bring competition damages claims.

While Brexit may mean Brexit, it is still far too early to tell what the impact will be on London’s current status as a premier destination to bring private action competition damages claims. Everything will, of course, depend on the Brexit terms which the UK is ultimately able to negotiate (and, importantly, whether the UK remains part of the EEA or not). Key issues will include:

  • the status of Commission decisions as evidence of infringement in private damages claims;
  • jurisdiction (and the risk of parallel proceedings, inconsistent decisions and possible anti-suit injunctions issued by other courts); and
  • the enforceability of English court judgments in Europe.

However, while there will be a risk of jurisdiction challenges, multiplicity of proceedings and inevitable uncertainty, English and EU competition law are closely intertwined after 43 years of the UK’s membership of the EU and a post-Brexit deal could still preserve much of what underpins England’s status as a go-to destination for these claims (particularly if a post-Brexit deal sees the UK as a member of the EEA). Moreover, with the existing well-established competition disputes infrastructure in London, England still has much to offer as a jurisdiction in which competition disputes should be determined. This includes:

  • the specialist legal and economic expertise of the Competition Appeal Tribunal, and a number of High Court judges with significant competition law expertise;
  • favourable procedural rules (including as to disclosure and limitation), combined with well-established judicial experience in applying those rules and a reputation for efficient and effective case management;
  • ever-increasing depth in the legal and expert economist market; and
  • the well-established presence of litigation funders with substantial familiarity with English law and the bringing of competition damages claims in the English courts, as well as a continuing strong appetite to fund competition damages claims.

If the terms of the Brexit deal enable England to retain jurisdiction of claims for EU-wide losses, we should certainly expect there still to be much for English competition litigators to do. Moreover, with the latest indications being that article 50 will not be triggered until the start of 2017, at the earliest, there is potentially a long tail of claims which may still be brought in the English courts regardless of what the Brexit deal ultimately is and (depending on the transitional arrangements) even the possibility of a sharp spike in cases as claimants look to bring pre-existing claims prior to the actual exit date to ensure that they benefit from the pre-Brexit regime.

*Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the member states and of the European Union.

Caroline Edwards is a partner in the dispute resolution department at Travers Smith and a member of the firm’s regulatory investigations group.  Her practice covers a broad range of high-value complex commercial disputes, including competition disputes. She has acted in a number of high-profile cartel damages cases brought in the English courts, including acting for members of the Schott group in their successful strike-out of the claim brought against them by members of the iiyama group of companies following the European Commission’s CRT glass cartel decision.


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