The Boris Berezovksy-Roman Abramovich High Court judgment today has highlighted one of England’s best and most profitable exports: its legal system
The Boris Berezovksy-Roman Abramovich High Court judgment today has highlighted one of England’s best and most profitable exports: its legal system. Such disputes between oligarchs and other wealthy foreigners bring in hundreds of millions of pounds a year to British law firms, chambers and courts. (This case alone is estimated to have cost £100 million.)
Stephen Ross, head of Civil Fraud at Withers, says that British judges are renowned for their fairness, which is why 40 per cent of commercial contracts worldwide – even those not involving Britons – are governed by English law. ‘That’s so that they then have the certainty that English law will apply. You don’t have judges who are paid off or bribed – that’s the perception worldwide.’
There are any number of ‘oligarchs and minigarchs’, as Ross says, bringing their disputes into English courts; the case of Cherney vs Deripaska, in which Cherney is suing Deripaska for £2 billion over shares in an aluminium company, is being litigated now. ‘There are a few more in pipeline,’ Ross says, ‘including a couple that Mr Berezovsky is bringing against other people. Whether he still has the stomach for it…’
Melissa Lesson, partner at Mishcon de Reya, says she sees many wealthy foreign couples choosing to divorce in the UK. ‘I think this is a product of firstly London being an international hub and a desirable place to live, and secondly, forum shopping,’ she explains.
‘England remains a very generous jurisdiction for wives and therefore whether by accident (ie they just happen to live here) or design (ie they move here specifically to try to seize the jurisdiction), it results in a proliferation of wealthy international couples passing through the Courts.
‘I also think that a lot of foreign nationals also believe that they are adequately protected by the pre-nuptial agreement or financial structure (Trusts etc) entered into in their own country, which most often turns out not to be the case.’
Russians in particular like the UK system because they feel that verdicts at home can be politically motivated, such as in the case of Mikhail Khodorkovsky.
There have been complaints that all these foreign cases gum up the English legal system, preventing justice from being served more swiftly in cases involving English people, but Stephen Ross says that foreign cases are not given timetabling priority – all have to work their way through the system.
It’s also clear that given the fees British lawyers are earning – Jonathan Sumption is reported to have got £3 million for representing Abramovich and ‘super-silks’ can earn £1,500 according to the Lawyer magazine – our lawyers won’t be turning their cases away any time soon.