Crumbling legal system will cost England money and influence

The Social Market Foundation said that delays in settling cases in over-burdened courts and a lack of laws specifically governing new markets and technologies could dissuade companies and investors from doing business in England or using English law in their commercial activities. 

The think tank said that politicians, officials and businesses have been “complacent” about the international standing of England’s legal system, resulting in a failure to invest and prepare for the future.  

In research drawing on insights from senior lawyers, academics and officials, as well as Opinium polling of UK’s businesses, the SMF found that English law is struggling to remain relevant to disputes and contracts involving technological innovations such as blockchain, AI and biotechnology. 

The SMF also highlighted economic risks arising from poorly supported legal institutions.  

Civil court cases in England and Wales “take too long and cost too much”, it said. When it comes to enforcing a contract, England and Wales languishes 33 places behind Singapore, according to World Bank rankings.  Delays and costs push some big businesses to use private arbitration processes instead of the courts, reducing the relevance of the legal system. 

The report also noted a “persistent problem with the recruitment and retention of judges”, which contributes to the slowness and cost of litigation. 

Richard Hyde, SMF senior researcher, said: “Our laws and legal institutions have been respected around the world, generating wealth and influence for the UK. But as a country we have become complacent about it and failed to support the law and its institutions properly.

“If companies can’t settle their cases quickly in our crumbling courts, they will go elsewhere. If business can’t use English law to draw up contracts for cryptocurrencies, AI or green investment, they’ll use another system.

“We can no longer take the rule of law and its economic benefits for granted. To maintain and improve our place in the global economy of the 21st century, we must continue to invest in and update our legal code and legal institutions.”

James Libson, managing partner at Mishcon de Reya, said: “We are proud to have supported this research, which is a timely reminder of the direct and indirect importance of English law not only to our continued economic prosperity, but also to our sense of place and influence in the world.

“For too long, we have taken the economic and social benefits of our system of law for granted, ignoring growing problems and allowing other legal centres to steal a march.

“If we are to continue experiencing the considerable benefits that English law has historically brought to the UK, it is vital that government, legislators, business and the legal profession act now.”