English Law and jurisdiction
The role of English law
The Commercial Court remains at the forefront of developing English commercial law to ensure that it keeps pace with the changing nature and demands of commerce (see for example the section on Digital Commerce). The Judges are actively involved in academic and market discussions concerning current and future trends in the development of English law, frequently participating in seminars and events including those organised by the Court with the involvement of leading practitioners and academics (see News and Forthcoming Events) and undertaking and publishing their own research on topics of interest (see Reports and Guides).
The UK is currently the second largest market for legal services globally, accounting for more than 5% of global legal services fee revenue. Together with the transactional and litigation expertise of the UK legal market, and London’s role as a leading seat of international commercial arbitration, the Commercial Court is one of the three pillars which has established and maintain the pre-eminence of English commercial law in international business transactions.
In his Blackstone Lecture 2022 the Lord Chief Justice, Lord Burnett of Maldon noted that “English Law underpins hundreds of trillions of pounds worth of global trade. It provides a global platform for trading, financial and commercial contracts on which global business relies.”
A report prepared for LegalUK, which sought to identify the value generated by English law, estimated that English law governed at least €661.5 trillion of Over the Counter derivatives in 2018, $11.6 trillion of global metal trading in 2020, £250 billion of mergers and acquisitions transactions in 2019 (40% of global corporate acquisitions being governed by English law), £80 billion worth of insurance contracts annually, and was the law of choice for maritime contracts, a sector that contributes over £15 billion annually to the UK economy. Oxera, Economic Value of English Law prepared for LegalUK, 5 October 2021 (PDF).
The Law Society’s recent International Data Insights survey (external link) noted that in 2021, the UK’s trade surplus for legal services reached £5.3 billion, compared to £4.6 billion in 2020.
The expertise of the Commercial Court, and the commerce-friendly principles of commercial law developed through the Court, have played a significant part in making English law the preferred choice of law for a vast range of commercial disputes, even where those transacting had no connection with this jurisdiction.
International Business Standard Forms
These forms are very frequently the subject of English jurisdiction and applicable law clauses. The judges of the Commercial Court have extensive experience of interpreting and applying the standard form contracts which feature extensively in international business transactions, both from their prior professional practices, and their judicial work. These forms include the standard form banking and capital markets contracts produced by ISDA, the ICMA, SIFA and the LMA, the standard wordings used in metals and commodities trading, the full range of contracts used in upstream and downstream energy work, insurance and reinsurance slips and policies, the standard documentation used in international sale and associated financing transactions and all types of documents used in the shipping and transportation sectors. A considerable number of the leading precedents settling the interpretation of such forms are decisions of the Commercial Court.
Applying Foreign Law
Reflecting the international character of legal practice in London, the judges of the Commercial Court are experienced in deciding cases by reference to the law of other legal systems. When in private practice, the judges worked extensively with lawyers from other jurisdictions. They were frequently involved in cases which raised issues of the law of other legal systems, whether by way of expert evidence or when making submissions by reference to legal sources from other jurisdictions in arbitrations. That familiarity with the law of other jurisdictions has continued in their judicial roles, with issues of ‘foreign law’ arising on a regular basis in Commercial Court proceedings.
For example, in a 12-month period from April 2020 to March 2021, the court delivered 25 judgments in cases raising issues of foreign law. The Commercial Court has developed flexible procedures, set out in Section H.3 of the Commercial Court Guide (PDF), to ensure that the content of any applicable law from another jurisdiction is ascertained in an appropriate and proportionate manner.