British business contracts "chucked away in the Brexit bin"
PUBLISHED: 10:12 24 July 2018 | UPDATED: 10:13 24 July 2018
A third of companies have shifted their contracts out of English courts' jurisdiction since the Brexit vote, it emerged today.
35% of businesses say they had changed their contracts so that legal issues are heard in courts outside of England, according to new research, threatening its position as a world-leading centre for companies to resolve disputes.
51% of those who had said they had chosen EU jurisdictions to hear disputes, according to the survey by Thomson Reuters. All of the companies polled were multinationals.
England's courts have historically been the first choice for many companies to govern their contracts, with London being the main destination for companies to resolve disputes.
The courts' reputation contributed to legal services generating £31.5bn for the UK economy in 2016.
But many companies are concerned judgments made here will no longer be recognised in other EU member states after Brexit, leading some to move contracts elsewhere.
Jim Leason, a vice-president at Thomson Reuters, said the results should raise concerns for the legal profession in England.
He said: “It is this initial selection in a contract that drives an entire industry of legal advice that supports transactional work, ongoing contract management and dispute resolution.
“If nothing concrete comes from Brexit negotiations soon or if there is a no-deal Brexit scenario, then more and more businesses will consider taking legal disputes elsewhere.
“London has a long-standing reputation as a global legal centre.
"However, a poor outcome from Brexit could result in work and talent pivoting away from the UK legal services sector.”
Labour MP Jo Stevens, a champion of Best for Britain, which is campaigning for a referendum on any final Brexit deal, said: "This government has been told over and over again but just doesn't seem to be getting the message. Brexit is bad for business, services, jobs and for Britain.
"This is a sign of our fall from grace on the world stage due to Brexit. Our courts have historically been the go-to option for business contracts, but now we're chucking that legacy away in the Brexit bin."