Scots courts not rated globally for disputes

“THE stakes are quite high, I think. It may end up that the only people who use Scots law and the Scottish legal system are those who can’t afford to choose any other system, or who have to use it because, for example, they are dealing with property in Scotland. It’s open to question whether such people will get the best possible service.”

Hector MacQueen, Edinburgh University Professor of Private Law, will set out his concerns about the future of Scots Law and the Scots legal system in a lecture next month at the annual conference of the British and Irish Association of Law Librarians (BIALL) in Glasgow.

Prof MacQueen identifies several factors that appear to indicate continuing erosion of the standing of Scots Law in the eyes of those who make business decisions about whether to litigate and where to litigate.

It has been identified for some years that it is commonplace for Scottish commercial firms to draw contracts for clients specifying they are to be subject to English rather than Scots law, and to the jurisdiction of the English rather than the Scottish courts.

On the other hand, there is not much evidence that enterprises in other countries have been persuaded of the value to them of agreeing their contract under Scots law or jurisdiction, or that Scotland has yet succeeded in attracting international arbitration business.

A report published earlier this month in England indicates that London continues to grow as a forum of choice for parties with no connection with the United Kingdom.

The headlines have been claimed by bitter and sometimes bizarre disputes between billionaires such as Roman Abramovich and the late Boris Berezovsky. That £3 billion dispute is thought to have cost tens of millions of pounds in lawyers’ fees.

The report, published by the Portland Group – whose advsory board includes Alistair Campbell, Michael Portillo and Sir Chris Powell – analysed 705 judgments delivered by the Commercial Court, the division of the English High Court that deals with disputes over contracts and related matters.

The analysis confirmed London’s growing attraction as a forum for expensive litigation despite competition from Hong Kong and Singapore. The United States provided most work, followed by Switzerland and Kazakhstan, a former Soviet state with a population of 16m. Many of the 86 Kazakh litigants relate to an ongoing dispute between one of the country’s biggest banks, BTA, and its former chairman, Mukhtar Ablyazov, who is alleged to have defrauded it of $6bn (£3.9bn).

Russian litigants accounted for 75 claimants and defendants between 2008 and 2013. Over the last five years more than 1,600 foreign litigants (62 per cent of the total) made their way to the High Court in London, nearly twice the number of UK-based individuals and companies, and generated £3.5bn in lawyers fees from disputes originating overseas.

While the personalities in the dock in London – and in the high earning chambers of barristers – are dazzling, Prof MacQueen argues that at the more workaday level the Scottish jurisdiction needs a new and vigorous approach regardless of next year’s decision on Scotland’s constitutional future.

The Taylor Report in 2011 showed that relative at least to England, Scotland has far less litigation than can be explained by its much smaller population.

Prof MacQueen argues that while the intention to drive cases away from the Court of Session may reduce costs, in his view the greater problem has been that the judges there have not shown much inclination to develop the law.

Professor MacQueen says: “The existing sheriff court procedures in civil cases have been heavily criticised recently by the UK Supreme Court on aspects the Gill Review didn’t address at all. Whether the sheriff courts are fit for purpose in serious civil business is open to question.

“I do of course have some solutions to some of the problems, but none of them is a quick fix, unfortunately.”