For decades, London has been the place to go for big commercial disputes in Europe. Even when companies based outside Britain sue one another, the cases are argued in London, such as one brought by UBS AG against Leipzig’s water utility and another by Franco-Belgian bank Dexia SA against the Italian city of Prato. With Britain preparing for Brexit, European judicial systems are trying to lure those cases to their own courts—by copying some U.K. legal practices and even offering proceedings in English. “At least one European country has to be able to process international commercial litigation,” says Guy Canivet, a former chief justice of the French Supreme Court who wrote a report on Paris’s jurisdiction post-Brexit. “It’s a matter of sovereignty.”
Paris, Amsterdam, Frankfurt, and Brussels are stepping up efforts to get a greater share of court levies and lawyers’ fees from corporate squabbles, setting up special panels that will work in the lingua franca of global business. When signing deals, companies typically agree on the jurisdiction that will hear potential disputes, and London became a leading destination because of its role as the capital of global finance and because its rulings are valid across the European Union—an advantage that could evaporate once Britain leaves the bloc. “London is stepping into the shadows,” says Roman Poseck, president of the appeals court in Frankfurt, where officials plan to have an English-language panel in place by January. “Frankfurt wants a piece of the pie.”
The Europeans say theirs are faster and cheaper than British courts, in part because they allow many proceedings to be conducted via written briefs. In London, virtually all arguments must be made orally, which takes time and adds to billable hours. And after Britain leaves the bloc, the Europeans say they’ll offer speedier decisions in cases that require fast action—say, the seizing of assets that might be spirited out of the country. While London rulings could still stand across the EU, they’ll likely need to be certified by a national court of an EU member, which will inevitably slow things down. Companies once chose London “as a matter of reflex,” says Peter Bert, a lawyer at Taylor Wessing in Frankfurt who’s also admitted as a solicitor in England. “We don’t see that anymore. There’s much more reflection before making a choice.”
Frankfurt says it’s considering features inspired by U.K. tribunals, such as more extensive court transcripts and a stronger role for attorneys in the pacing of proceedings. Amsterdam was already working on a special chamber for international disputes before Britain said it would quit the union; the Brexit vote gave the idea a big boost. And Brussels and Paris are touting courtrooms staffed by business-savvy former bankers and engineers. “In England, it’s the best lawyers who become judges,” says Jean Messinesi, president of the Paris Commercial Court. In France, “it’s top entrepreneurs and senior managers at companies.”
The Continent’s fight isn’t only with London, since many cases heard in the U.K. involve non-European companies. Those might well stay in London or move to other global litigation hubs, such as New York, Singapore, or Dubai. Dublin, which of course already offers proceedings in English, is another potential rival, with officials there emphasizing that once Britain quits the EU, Ireland will be the largest English-speaking country remaining.
The Law Society, which represents solicitors in England and Wales, is urging the British government to negotiate a Brexit deal that would protect the status of U.K. courts. And in September the group launched a campaign extolling London’s advantages for litigants that includes video testimonials to the quality of British courts. “The international language of business will remain English,” says Simon Davis, deputy vice president of the Law Society and an attorney with Clifford Chance in London. “And English law will remain the law of choice, particularly in relation to financial institutions.”
In a bid to maintain London’s leading role, U.K. Prime Minister Theresa May in August backed off a vow that EU courts would not be given any say in U.K. matters. The goal now is to maintain strong ties to the EU legal system, perhaps similar to those of non-EU members Switzerland and Norway, whose court rulings are enforceable across the bloc. Even that could be unacceptable to Eva Kühne-Hörmann, justice minister of the German state of Hesse, home to Frankfurt, who’s argued against being too accommodating to the British. “We can’t allow the U.K. to cherry-pick in Brexit negotiations,” she says. “We need rules that favor our own courts.”
… and it’s about time, too.
In fact, Paris and Frankfurt aren’t the only jurisdictions making this sort of move, either, see Creation of an English-speaking international Commercial Court in Brussels – lexgo.be