Dublin is joining the race to establish a new European hub for international commercial law if a “hard Brexit” undermines the status of Britain’s courts and English law in the eyes of international business.
The initiative by the Bar of Ireland, the professional body for barristers, follows moves to set up English-language courts in Germany, France, Belgium and the Netherlands as they seek to capture some of the valuable and prestigious legal work from which the UK has long profited.
Financial and professional services experts have voiced concerns that Brexit will erode the UK's reputation as a global "jurisdiction of choice" for international law. This could threaten a lucrative source of business for large legal and professional services firms in the City.
“International consumers of UK legal services are already signalling that they will move operations. In that sense, the UK’s departure from the EU creates a real opportunity for Ireland, not only for the legal services but also for the wider economy,” said Paul McGarry, Bar of Ireland chairman.
Legal centre
The UK's status as an international legal centre hinges on the reputation of its UK's judiciary and the experience of UK-based law firms in handling cross-border work. In 2016, for instance, 70 per cent of cases in the Commercial and Admiralty Courts - venues for complex business and maritime disputes - involved at least one party based outside England and Wales.
However, Brexit has raised fears that the UK will drop out of a series of European regulations that allow rulings of national courts to be enforced in other member states.
“In two years’ time it is unlikely that the UK will be integrated in the EU legal system and consequently, there is a real risk that the judgments of English courts may not be enforced in member states easily,” Mr McGarry said. “Hard Brexit means that’s a problem.”
Common law jurisdiction
One experienced City litigation and arbitration lawyer sought to highlight the enduring attractions of English law and British lawyers.
“Our clients are buying into generations of experience in resolving international disputes, while the quality of English judiciary is acknowledged as the best in the world,” he said.
But he acknowledged that, with Brexit on the horizon, “we as litigators [IN THE UK]need to be doing a better sales job”.
Like the UK, Ireland is a common law jurisdiction with an English-language legal system, as well as specialist lawyers and an established commercial court to fast-track business cases.
The Irish bar has begun talks with large solicitor firms in Dublin and the solicitors’ professional body to see how best to market the country’s legal system abroad. It is also wants the government to establish formal targets for increasing trade in international legal service and appoint specialists to oversee a strategic plan with the justice department.
Its move has been backed by Charlie Flanagan, justice minister, who wants Dublin to endorse the plan formally, and by IDA Ireland, the country's inward investment agency.
Rivals
“While the ultimate outcome of the Brexit negotiation process is not yet known, the UK’s withdrawal from the EU will give rise to a changing landscape, including in the field of legal services,” Mr Flanagan said.
But Ireland is not the only country looking to capitalise if Brexit undermines the primacy of English law in cross-border trade and investment. The new Netherlands Commercial Court is due to open this year - after some delays - and will hear cases in English.
The financial markets are beginning to show some nervousness on the issue. This week the International Swaps and Derivatives Association said it was drafting French and Irish law master agreements to underpin trades as an alternative to the English law agreement that has governed European transactions worth trillions of euros for decades.
Such agreements will also include French and Irish court jurisdiction clauses, while the ISDA is also looking at the possibility of designating the courts of an EU27 member state to rule on English law agreements.
Citing UK industry data, Mr McGarry said the net value of international legal services was worth about €4bn per year to the British legal sector. “That’s the surplus. The turnover is much higher.”
Referring to the Irish lawyers’ initiative, he added: “This is not about trying to establish in competition with London. It’s about trying to ensure that Ireland gets some of the fallout from Brexit because the French, the Germans, the Dutch and the Belgians are [ALSO] competing for some of the spill-off.”
– Copyright The Financial Times Limited 2018
