Down among the green shoots

By | 27th August 2009

Green shoots?  But will they be trampled by the elephant in the room?

In her recent article (Positive thoughts, The Lawyer, 26th August 2009) Katy Dowell quotes the claim by Patrick Sherrington, global head of litigation at Lovells, that London is a “good place to hear cases” and his view that the Government (by asking Lord Justice Jackson to review litigation costs) has misrepresented the British commercial justice system as being an expensive place to litigate.

Sherrington asks, “Why should we say it’s expensive? It’s shooting ourselves in the foot.”

Economists may disagree whether the economy is set to recover and whether the recovery will be W shaped, V shaped or any other shape, but I have noted before [The race is on, 25th August] that there appears to be an upturn in the amount of litigation work in the City…

This view is borne out by the instructions we are receiving and from discussions with a variety of lawyers, most recently a partner at a US firm with offices in London who told me he was busier now than at any time for the past few years.

Of course, there will always be some litigation about because businesses inevitably have to deal with disputes as part of their normal everyday activity. We also see more activity on the part of regulators and this will certainly increase as the regulators get to grips with the causes of the credit crunch and the decisions taken by financial entities which have led to the sharpest downturn in economic activity for a generation. Then, of course, there will be people wanting to recover their losses, etc.

Published results for Lovells show a dramatic increase in revenue for litigation, up over 27%, and revenue per partner, up a massive 73%. These are impressive figures and support Sherrington’s view that London is a good place to litigate. He is also reported as saying that his firm intends to recruit lawyers to deal with the big ticket work he feels is on the way once the losses incurred by business as a result of the economic crisis have crystallised. So there may well be more to come!

He is in good company too. Tim House of A & O and Anthony Dutton of Norton Rose have voiced similar views in the recent past, both arguing that London is not an expensive place to litigate and that clients are prepared in any event to pay the premium rates to have access to the expertise in the legal community in the capital.

They may be correct but I don’t think it is all plain sailing. London has always prided itself on the excellence of the legal services it provides not only to home grown litigants but especially to foreign entities who prefer to litigate in this country rather than elsewhere. That reputation has been hard won over the years and we would do well to remember that what has been won can also be lost, particularly if litigation in London comes to be perceived as unresponsive to business imperatives, slow, costly, old fashioned and bureaucratic.

Clients want the best advice and to some extent are prepared to pay to get it. However, if cases are not managed properly, the facilities available to litigants are seen to be from another age and lawyers continue to ignore the technology which is available, London will soon cease to be pre-eminent.

London can remain a good place to litigate if litigation lawyers address the elephant in the room. I am often amazed to hear lawyers extol the benefits of litigating in London and in the same breath complain of court delays, expense and the time taken to prepare a case for trial.

What this ignores is that most lawyers tend to operate in the same way as their predecessors, which often involves employing paralegals to plough through piles of paper, reviewing material which is or may be irrelevant and ignoring the technical aids which now exist to ensure that lawyers only review material which is relevant, and then only once, rather than reading through the same material time and time again. In turn they charge large sums of money to their clients for this doubtful privilege.

Technology is not always the answer, but it should not be ignored. The forthcoming redraft of the Practice Direction to Part 31 of the CPR will provide a welcome impetus in this direction.

In the meantime, we should suspend judgment on claims that London is a good place to hear cases and will remain so. I think the jury is out.

I agree with the following section from Lord Justice Jackson’s preliminary report (paragraph 5.8 of Chapter 40 in volume 2):

Case management generally. The view has frequently been expressed during Phase 1 of the Costs Review that proper case management will avoid the pitfalls of e-disclosure. One very experienced litigation support specialist has put the matter in this way: “The runaway train (in terms of costs) that is e-disclosure, can be controlled by case management judges, with the sensible application of existing rules and by making the relevant solicitors (and the parties they represent) accountable for both the methodology to be followed during the disclosure process and, also responsible for the education of the judge on a particular matter or point. The forthcoming e-disclosure questionnaire and the proposed new practice direction will aid the process, by clarifying the issues and flushing out potential conflicts at an early stage. Despite some of the scaremongering of certain commentators and service providers, parties to litigation in our courts will not suffer the exorbitant costs of e-disclosure that our US cousins endure, as long as our judges enforce the rules and keep an open mind as to the role technology could and should play in the process.”

This sounds like the framework which is needed to ensure the continued pre-eminence of London as a good place to hear cases. If adopted, it should go some way to ensuring that the elephant does not trample on all the green shoots!