Lammy: Government, legal sector and business need to collaborate
The government should invest both in the court system and new legislation, particularly relating to technology and financial services, to boost economic growth, a report for the Ministry of Justice (MoJ) has urged.
The report also called for improved visa access for foreign lawyers and raising the cap for foreign law students on professional law courses.
Legal consultancy Hook Tangaza – which last year produced a report for the MoJ on the benefits of an open and competitive legal economy [1] – has produced a longer review of the role that English law plays in supporting economic activity in the UK and the wider world, and how it might be further enhanced in future.
It said the return of English law to the economy “far exceeds any value recorded through exports or inward investment into the legal sector”.
On the court system, it said delays in resolving disputes “cost money” and the efficiency of the courts “directly affects” the cost of doing business.
“As courts become more congested, money is tied up for longer, the value of tangible assets to be recovered is likely to depreciate, and the costs of doing business go up.
“This also links with other aspects of access to justice which find their way into international rule of law indices. The UK eventually pays more in the end through the additional costs that the whole economy pays through the knock-on effects that these indices can have on rating agencies, for example.
“Investing in improvements in legal certainty gives a clear payback for the UK economy.”
In the report Harnessing English law for economic growth [2], Hook Tangaza called for more investment “in the production of the law”, especially at “this crucial phase” of technological development.
“This means undertaking a full audit of the actual and potential gaps in the fabric of legislation and regulation relating to technology in the UK, and separately, in modern financial services.”
It also meant providing “additional funding to the Law Commission to enable it to prioritise further essential law reform projects”, as well as further support for the UK Justice Taskforce, the industry-led group under LawtechUK that clarifies legal issues surrounding technology.
“This is a vital investment for the future, without which the asset value of English law is likely to diminish.”
Researchers warned that the UK was “losing competitiveness against other dispute resolution hubs that can offer more certainty to practitioners about their ability to obtain a timely work visa” and “greater clarity” in the area would help the UK to regain competitiveness.
“The future international success of English law depends on maintaining the attractiveness of England and Wales as a destination for study and qualification.
“This depends on wider policy around higher education, but where there are measures that can be taken to support the legal talent pipeline, these should be taken.
“Actions that recognise the future importance of international law students to the UK economy include higher foreign student caps for professional law courses, and schemes to allow law graduates from overseas to remain on graduate visas in the UK for longer, to facilitate qualification.”
The report said the “depth and extent of the wider ecosystem that supports English law” had “never been fully described or promoted”.
A central portal which linked “all of the resources that English law has at its disposal would help to communicate the sheer depth and sophistication that it offers”.
Looking to the future, researchers commented: “At present, it seems likely that English law will remain highly significant but less dominant in future than it has been over recent decades.
“We are moving towards a more fragmented world where multiple legal systems compete and cooperate, with parties choosing based on specific transaction needs, geopolitical considerations, and regional contexts.
“The key for English law lies not in trying to resist this multipolar reality but rather by adapting to remain the preferred choice for the types of complexes, high-value, truly international transactions where its strengths matter most.”
Launching the report, Lord Chancellor David Lammy said: “Other jurisdictions are actively investing in, modernising and promoting their legal systems.
“If we are to maintain our position, we must be just as purposeful, focused and strategic.”
The report was clear about the need to position English law “as a modern, practical framework for global business”, he said, “harnessing the opportunity to lead in the next wave of growth, from innovative finance and new technology to infrastructure and the green economy”.
Mr Lammy added that the government, legal sector and business needed to collaborate “to develop clear messaging on what English law offers” so that it remained the framework of choice “for generations to come”.