Public happy to see law firms staying out of Russia

Russia: Law firms exited en masse after the Ukraine invasion

The public continues to support law firms not operating in Russia, according to research that also shows how the Commercial Court has weathered a big drop-off in Russians litigating here.

International parties constituted 64% of all litigants in the last year, an eight percentage point increase on 2023 and the largest proportion in 12 years of the research. They came from a record 84 nationalities.

Communications company Portland’s annual review of the Commercial Court, based on judgments handed down, said 27 Russian litigants appeared in the Commercial Courts across a total of 10 cases. Russians have been among the most common foreign nationalities to use the Commercial Court for some time, with 58 in 2023.

Sanctions do not prevent Russians from litigating but, notably, only 30% of the Russian litigants had legal representation, compared to just over 70% the year before.

Portland also polled 2,000 members of the public and found that 62% remained supportive of law firms that have closed their offices in Russia since the beginning of the war in Ukraine; only 9% had “an outright unfavourable view of this”.

However, “public sentiment seems to be softening” on Russian use of the English courts – 41% believed it was negative that the English courts were being used by Russian litigants, down from 51% a year ago.

A similar number (45%) would have a less favourable view of a law firm that provided legal services to Russian individuals or companies, also down from 51%.

“A demographic breakdown of the responses can reveal a generational disparity in sentiment towards these issues: older age groups are considerably more likely to hold a negative view towards the English courts being used by, and law firms representing, Russian litigants,” Portland said.

Propelled by a surge in litigants involved in aircraft insurance cases, Ireland has for the first time become the largest foreign nationality before the court (137 litigants), with the US in third with 75, a 56% increase.

There were record-high numbers of appearances by litigants from Switzerland (45), the UAE (43), Cyprus (33) and the British Virgin Islands (29).

In her foreword to the report, the Lady Chief Justice, Baroness Carr, said it was “particularly noteworthy” that the court’s work continued to grow, “notwithstanding the curtailment of what has traditionally been a significant source of work for the court. This is a testimony to the court’s resilience”.

Nation-state litigants appeared 31 times in the Commercial Court (discounting government agencies or other public organisations), another record number. A majority of the judgments (58%) related to arbitration, while four in 10 concerned sovereign debt claims.

“With the International Monetary Fund recently reporting that almost 70 countries are now at risk of post-Covid debt distress, a future wave of litigation is already on radars,” the report said.

Overall, there was a 2% increase in the total number of Commercial Court judgments handed down, to 262, a continued recovery from the post-Covid dip in activity, featuring 1,220 parties, a 9% rise.

While Portland’s opinion poll also found that 56% of respondents believed the recent rise in lawsuits over contributions to climate change was a positive development, this was 21 points lower than a year before.

A larger majority (75%) viewed positively the recent increase in lawsuits related to greenwashing and six in 10 would view a company more negatively if they were subject to lawsuit around greenwashing.

The public were also strongly in favour (62%) of shareholders being able to sue companies over their environmental, social and governance policies.

Nearly half (46%) thought law firms should provide services to companies whose activities harmed the environment, compared to 33% who said they should not.

The survey covered the use of artificial intelligence (AI) as well, with 52% of respondents saying would have a less favourable view towards a judge if they used AI to help them write a ruling, as would 44% if the judge had used AI to provide written summaries for an area of law they were unfamiliar with.

A third of people would be negative about lawyers using AI to conduct research for a case and 44% if they had the technology write legal arguments for it.

The poll revealed as well that 40% of the public think a company is guilty if they settle a lawsuit out of court, more than twice the number who think they are not guilty.

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