Dispute Resolution 2021 - Seladore Legal
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104 Dispute Resolution 2021
United Kingdom
Simon Bushell is described as a forceful, determined and clear-sighted litigator and
has consistently been ranked in Chambers UK from the early days of his career.
He is frequently lauded in The Legal 500, having been recently inducted into its
Hall of Fame for Civil Fraud and praised as a Leading Individual in Commercial
Litigation. He has regularly featured in Who’s Who Legal, and was ranked as Top
Recommended in both corporate law and litigation funding for Spear’s 500 in 2020.
Simon acts for a broad range of clients, including large corporates, private
equity houses, financial institutions, banks and ultra high-net-worth individuals,
in addition to foreign government agencies and state-owned companies. He has
undertaken investigations into complex, worldwide frauds, conspiracies and insol-
vencies, and has wide experience in coordinating parallel cross-border disputes.
Prior to founding Seladore Legal with Gareth Keillor, Simon was a partner
at Herbert Smith Freehills from 1997 to 2013, after which he joined Latham and
Photo by Luciano Mortula - LGM on Shutterstock
Watkins and became chair of their litigation department in London. Simon has more
than 30 years’ experience in high stakes commercial litigation.
Gareth Keillor and Kevin Kilgour are both experienced litigators, who joined
Seladore Legal from Herbert Smith Freehills.
www.lexology.com/gtdt/intelligence 105
United Kingdom
1 What are the most popular dispute resolution methods for clients in
your jurisdiction? Is there a clear preference for a particular method
in commercial disputes? What is the balance between litigation and
arbitration? What are the advantages and disadvantages of the most
popular dispute resolution methods?
Where a commercial dispute cannot otherwise be resolved, litigation and arbitration
continue to be the main forms of dispute resolution in England and Wales. Alternative
forms of dispute resolution such as mediation continue to be popular as well, and
are often utilised before formal proceedings have begun or in parallel with ongoing
litigation or arbitration.
English litigation and arbitration are both very effective methods of resolving
complex, high-value domestic and international disputes. Both offer slightly different
advantages and disadvantages. Importantly, the benefits of one are often reflected
in the drawbacks of the other, meaning there can be an obvious choice as to which
mechanism is best suited to resolving a particular dispute. Similarly, particular
industries may have a preference for one method over another. For example, energy
and construction disputes often utilise arbitration, given its confidential nature and
the ability to engage decision-makers with relevant industry experience, whereas
financial services disputes are often resolved through litigation, given that it can
allow for relatively swift summary judgments in straightforward disputes, such as
claims for outstanding debts.
In terms of perceived advantages and disadvantages, litigation enables a
claimant to bring proceedings simultaneously against a number of defendants,
even where some of those defendants are not party to any underlying contract (and
the corresponding jurisdiction clause). It also allows a claimant to access a highly
skilled judiciary through a transparent and public process, which will result in a
decisive outcome (subject to any appeal). The court fees associated with litigation
are also relatively modest.
Conversely, arbitration may offer a more suitable avenue for parties who
are concerned about the enforceability of an award, require confidentiality or are
involved in a dispute that would benefit from specialist decision-makers. Arbitration
gives the parties a high degree of autonomy as to how the dispute is approached,
which allows for flexibility in respect of the location and timing of any hearings. This
autonomy (and the need to pay the tribunal’s fees) will typically mean that arbitra-
tion proceedings are more expensive to conduct, although they may be resolved
quicker than litigation (assuming summary judgment is not an option). The potential
for swift finality is particularly notable in arbitration given that the right to appeal is
generally very limited.
106 Dispute Resolution 2021United Kingdom
Simon Bushell Gareth Keillor
“Arbitration
gives the
parties a high
degree of
autonomy as to
how the dispute
is approached.”
Kevin Kilgour
www.lexology.com/gtdt/intelligence 107United Kingdom
While English arbitration awards are generally straightforward to enforce, it
is typically very difficult to join non-contractual parties. Where non-contractual
parties are involved, litigation is likely to be the better option as there is otherwise
a risk of a claimant being required to begin separate processes against different
defendants.
Given these different advantages and disadvantages, litigation and arbitration
coexist comfortably in England and parties therefore have a significant degree of
choice as to how to resolve any particular dispute. This said, litigation continues
to the more popular option. In 2020, the London Court of International Arbitration
(LCIA) received 444 separate referrals for arbitration, while in 2019 (the last year
for which figures are available) the primary commercial courts in London (the
Business List of the Chancery Division and the Commercial Court of the Queen’s
Bench Division) received approximately 3,500 separate filings.
2 Are there any recent trends in the formulation of applicable law clauses
and dispute resolution clauses in your jurisdiction? What is contributing
to those trends? How is the legal profession in your jurisdiction keeping
up with these trends and clients’ preferences? What effect has Brexit had
on choice of law and jurisdiction clauses?
Given their well-established pedigree, English courts and English law continue to
be very popular and sound choices for parties engaging in international contracts.
The principles that English law has developed in respect of commercial dealings
and dispute resolution are widely-known and respected. This is unlikely to be
affected by Brexit.
While contractual dispute resolution provisions continue to favour English
law and the English courts, these clauses are becoming increasingly complex.
They may, for example, set out a ‘tiered’ escalation process for resolving disputes
(eg, requiring the parties try mediation before proceedings are initiated) or be
‘asymmetric’ in that one party has different rights from the other (eg, the right
to arbitration over litigation may be at the discretion of only one of the parties).
Ultimately, the complexity of these clauses and what they substantively provide
will be a matter of negotiation for the relevant parties. In this respect, each party
should take great care (and legal advice) when negotiating dispute resolution
provisions to ensure that it is not disadvantaged if a conflict arises.
Separately (and as a response to Brexit), the United Kingdom has ratified the
Hague Choice of Court Convention (the HCCC), which has also been ratified by
the European Union and a number of other countries. In broad terms, countries
that have ratified the HCCC will respect exclusive jurisdiction clauses in favour of
108 Dispute Resolution 2021United Kingdom
one another and will typically recognise and enforce judgments obtained across the
relevant jurisdictions.
Importantly, the HCCC only applies to exclusive jurisdiction clauses and it is
therefore likely to be difficult where clauses allow for more than one jurisdiction.
Further, it only applies to contracts agreed after the HCCC came into force in
the relevant state, which has created some unresolved confusion for the United
Kingdom given that is has effectively agreed to the HCCC twice – once as a member
to the European Union in October 2015 and then separately on its own (due to Brexit)
in December 2018. While it remains to be seen how this will be resolved, the United
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Kingdom believes that it is the earlier of these dates that should be applied. In any
event, the HCCC offers helpful clarity for a large of number of exclusive jurisdiction
provisions.
Where the HCCC does not apply, the position following Brexit for the time being,
and pending a final decision as to whether the United Kingdom will be permitted to
accede to the Lugano Convention, will be that English common law applies and the
English courts will accordingly have notable discretion as to whether or not they
have jurisdiction over a particular defendant. More specifically, a claimant will need
www.lexology.com/gtdt/intelligence 109United Kingdom
“Recent years have seen the
development of specialist dispute
boutiques started by high-profile
lawyers who have broken away
from other elite firms.”
to obtain the court’s permission to serve out of the jurisdiction by showing that there
is a serious issue to be tried, one or more of the ‘jurisdictional gateways’ is satis-
fied and England is the proper and appropriate forum for the claim. Jurisdictional
gateways grant the English courts jurisdiction over foreign defendants where the
subject matter of the dispute is sufficiently connected to England or Wales. The most
common gateways are that the claim relates partly or wholly to property within the
jurisdiction, it involves a contract governed by English law or a jurisdiction clause
in favour of England, the harmful act or the harm suffered occurred in England or
Wales, or that an international co-defendant is a ‘necessary and proper party’ to
proceedings in England against other defendants over whom there is jurisdiction
(eg, due to a jurisdiction clause or due to their domicile). Any defendant may chal-
lenge jurisdiction, normally on the basis of ‘forum non conveniens’ (ie, that England
is not the appropriate venue for a particular claim, and a more convenient forum
exists elsewhere).
Jurisdiction and governing law provisions often give rise to complex issues.
Accordingly, where a dispute has an international aspect, it is sensible to obtain
legal advice at the earliest opportunity.
110 Dispute Resolution 2021United Kingdom
3 How competitive is the legal market in commercial contentious matters
in your jurisdiction? Have there been recent changes affecting disputes
lawyers in your jurisdiction? How is the trend towards ‘niche’ or specialist
litigation firms reflected in your jurisdiction?
The London legal market continues to be very competitive. In addition to the tradi-
tional English firms and the London offices of various US firms, recent years have
seen the development of specialist dispute boutiques started by high-profile lawyers
who have broken away from other elite firms. Despite being smaller than full-scale
outfits, these boutique firms are regularly instructed in complex, high-profile liti-
gation and arbitration, often in place of more established names. The have proved
popular with clients given they offer the expertise of prominent dispute lawyers, but
with a greater degree of flexibility in terms of the service they are able to provide,
with increased involvement by senior lawyers and without the typical conflict of
interest concerns that arise at full-service firms.
4 What have been the most significant recent court cases and litigation
topics in your jurisdiction?
Notwithstanding the challenges posed by covid-19, the English courts have released
a number of important decisions over the past year.
• PCP Capital Partners LLP v Barclays Bank plc, in which the High Court considered
whether a bank had waived legal privilege in relation to communications it had
undertaken with its lawyers about a series of allegedly fraudulent transactions.
The court held that, by providing its lawyers’ advice on the lawfulness of the
transactions, it had in fact waived privilege in relation to all contemporaneous
communications it had undertaken with them. The decision shows the risk of a
party trying to ‘cherry-pick’ precisely what privileged information it will share in
order to support its case.
• The Financial Conduct Authority v Arch Insurance (UK) Ltd and others, a Supreme
Court case brought by the Financial Conduct Authority to test a series of issues
regarding how non-damage business interruption insurance policies respond to
covid-19. The judgment has meant that the cover provided is broader than what
had been argued by various insurance companies. It is likely to have significant
consequences for insurers, reinsurers and policyholders. Furthermore, the use
of a test case procedure (which all parties agreed to) was an innovative solution
to the need to obtain clarity quickly on issues that were of great importance to
the insurance industry (and wider economy). It is likely that this procedure will
be used more frequently in the future.
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• Okpabi v Royal Dutch Shell Plc, in which the Supreme Court held that English
courts can have jurisdiction over claims relating to foreign subsidiaries of
UK-based companies. Whether the UK-based parent owes duties to those
affected by its foreign subsidiary will depend on the extent to which the parent
managed the relevant activity (either directly or through group-wide policies).
• Mastercard Inc and others v Merricks, in which the Supreme Court opted for
a more flexible approach to class action litigation. It did so by holding that
class actions, even on an opt-out basis, should be permitted where doing so
is preferable to expecting a large number of individual claimants to bring their
own separate proceedings (particularly where their separate losses are rela-
tively minor).
• WM Morrisons Supermarkets Plc v Various Claimants, in which the Supreme
Court held that Morrisons was not vicariously liable for a data leak carried out
by a rogue employee. The decision is significant in that it was the first major
data protection class action decision since the introduction of EU General Data
Protection Regulation and the Data Protection Act 2018. While data protection
continues to be an area of significant change, the decision will provide some
comfort for entities that hold large amounts of personal data.
5 What are clients’ attitudes towards litigation in your national courts?
How do clients perceive the cost, duration and the certainty of the legal
process? How does this compare with attitudes to arbitral proceedings in
your jurisdiction?
English courts and English law continue to be very well respected internationally
as providing fair, transparent and certain outcomes. The English judiciary remain
among the most highly regarded in the world. As a corollary to this, English barris-
ters and solicitors have a strong reputation in providing quality advice and advocacy
in both domestic and international disputes.
There is a perception that English litigation can be expensive and time-
consuming. However, in recent years, the courts have sought to address this by
implementing various processes to control parties’ budgets, the scope of disclosure
exercises, and, recently, narrowing witness evidence.
As noted, while arbitration proceedings can sometimes be less time-consuming
and more cost-effective, this is not always the case.
112 Dispute Resolution 2021United Kingdom
6 Discuss any notable recent or upcoming reforms or initiatives affecting
court proceedings in your jurisdiction.
The restrictions around the covid-19 pandemic have acted as a catalyst for modern-
ising England’s court processes and an increase in the use of remote hearings.
This modernisation was already underway, but was accelerated dramatically from
March 2020 onwards. The experience has been largely successful and parts of it are
likely to be embraced even once restrictions lift, particularly where they provide for
potential cost savings. Having noted this, traditional in-person hearings are always
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likely to be the default given the emphasis the English courts place on principles of
open justice.
On 6 April 2021, a series of new rules regarding the preparation and content of
witness statements in High Court proceedings came into effect. The changes limit
the content of witness statements to disputed matters that the witness can recall
and are likely to significantly alter the process by which statements are typically
prepared by requiring witnesses to play a much more active role. The changes
reflect the courts’ increasingly vigilant approach to witness evidence. In the recent
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“Arbitration is typically seen as
providing finality to a dispute and
control to the parties.”
decision of PJSC Tatneft v Bogolyubov and others, a party’s claim was dismissed in
its entirety on the basis that the witness statements appeared to have been drafted
by its lawyers and the witnesses themselves frequently contradicted the statements
during cross-examination. These changes are significant and failure to comply with
them may have serious repercussions.
Finally, the Disclosure Pilot that has operated in the Business and Property
Courts since January 2019 has been extended to the end of 2021 and looks as
though it is here to stay. The Pilot is intended to provide the courts with greater
control over the disclosure process by requiring the parties to fulfil various proce-
dural requirements. While in some instances this has been successful, it can lead to
increased costs in complex cases with multiple parties.
7 What have been the most significant recent trends in arbitral proceedings
in your jurisdiction?
Annual reports issued by the LCIA indicate that it is seeing record numbers of new
cases, even given the challenges of the covid-19 pandemic. It has seen a continuiously
114 Dispute Resolution 2021United Kingdom
diverse profile of parties electing to refer their disputes to the LCIA (most notably with
an increase of parties from Russia, Switzerland and elsewhere in Europe). The LCIA
has also reported an increase in gender diversity, with the number of female arbitrator
appointments increasing from 23 per cent in 2018 to 29 per cent in 2019. It has also
seen an increase in the number of non-British arbitrators.
8 What are the most significant recent developments in arbitration in your
jurisdiction?
Arbitration is typically seen as providing finality to a dispute (due to the limited avenues
for appeal) and control to the parties in that the courts are generally unwilling to
encroach on disputes that are referred to arbitration. However, there are limits to both
of these points. One of Seladore Legal’s partners, Kevin Kilgour, was recently involved
in a successful (and unusual) application to overturn an arbitral award. English law
(under sections 67 to 69 of the Arbitration Act 1996) allows an award to be challenged
on the basis of a lack of jurisdiction or serious procedural irregularities such as fraud
or bias. While this jurisdiction is exercised very rarely, the High Court in Doglemor
Trade Ltd v Caledor Consulting Ltd intervened to correct a significant mistake that the
relevant arbitral tribunal had made in applying tax liabilities when calculating its final
award. The tribunal acknowledged this mistake but refused to use its own powers to
correct it. The decision shows that, in some circumstances, the courts will exercise
their power to supervise arbitration proceedings.
9 How popular is ADR as an alternative to litigation and arbitration in your
jurisdiction? What are the current ADR trends? Do particular commercial
sectors prefer or avoid ADR? Why?
Alternative forms of dispute resolution continue to be very popular with parties and
their use is strongly encouraged by the English courts.
In the recent decision of Wales (t/a Selective Investment Services) v CBRE
Managed Services Ltd and another, the High Court prevented a successful defendant
from claiming a substantial portion of their costs due to a failure to engage in media-
tion. Similarly, the courts in DSN v Blackpool Football Club Ltd and BXB v Watch Tower
and Bible Tract Society of Pennsylvania both ordered the respective defendants to pay
the claimants’ costs on a higher indemnity basis due to the defendants declining to
participate in mediation given a misplaced belief as to the strength of their case.
Given the current strain on judicial resources, a party who refuses to engage
in alternative dispute resolution prior to (or during) formal proceedings is at risk of
having notable sanctions imposed on them by the court.
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10 What is the position in relation to litigation funding in your jurisdiction? Is
funding available? Have there been any significant developments in this
area in your jurisdiction?
Litigation funders continue to play a significant and increasing role in the English
court system.
The courts continue to supervise funders’ involvement, as evidenced by the
recent decision of Chapelgate Master Fund Opportunity Ltd v Money, where the
Court of Appeal confirmed that, where a funded claim fails, the funder may be liable
for all of the other party’s costs from the date the funding agreement was entered
into onwards. This dispelled thoughts of the ‘Arkin cap’, which suggested that a
funder’s liability was limited to the amount of funding it had actually provided.
Simon Bushell Seladore Legal Limited
simon.bushell@seladorelegal.com London
www.seladorelegal.com
Gareth Keillor
gareth.keillor@seladorelegal.com
Kevin Kilgour
kevin.kilgour@seladorelegal.com
116 Dispute Resolution 2021United Kingdom The Inside Track What is the most interesting dispute you have worked on recently and why? We have recently been working on a cross-border insolvency matter in which we sought (and obtained) recognition of a Russian bankruptcy in England and the Isle of Man. The dispute has had many facets, including a worldwide freezing order and obtaining a travel ban and passport surrender order to prevent the bankrupt from fleeing the jurisdiction. This action resulted in over US$20 million of previously undisclosed assets being revealed. We anticipate that there will be an increase in insolvency disputes due to the economic impact of the pandemic and therefore expect to see many more of these types of cases. What do you consider to have been the most significant legal development or change in your jurisdiction of the past 10 years? The dual effect of a huge increase in litigation funding (and changes to the regu- latory regime in relation to litigation funding and legal fee agreements) and the nascent class action regime in England (including an ‘opt-out’ class action in relation to data breaches) is one of the most significant developments. We believe these two changes will lead to greater access to justice for individual clients, as well as an increase in major corporates being held to account in relation to, for example, data breaches and privacy violations. What key changes do you foresee in relation to dispute resolution in the near future arising out of technological changes? Technology has already had a profound impact on dispute resolution over the past 12 months. The switch to remote hearings for litigation and arbitration happened almost seamlessly and given the success of this, it seems very likely that many hearings will continue to take place remotely. There are real advantages, both in efficiency, due to reduced time waiting in courtrooms, and also an ability for clients overseas to attend hearings without traveling, which either saves them costs or means they (or colleagues) can attend hearings they would otherwise not have been able to. www.lexology.com/gtdt/intelligence 117
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