On 4 July 2018, Justice Secretary David Gauke confirmed the UK’s plan to build a new, 18-courtroom facility in London to focus on fraud and cybercrime. Policy Chairman of the City of London Corporation, Catherine McGuinness, referred to these as ‘the legal issues of the future’. The move is likely to provide a welcome boost to London’s global standing as a leading centre for dispute resolution at a crucial time.
The challenges created by cybercrime and fraud, particularly for business, are now well-established. In the 12 months to September 2017, there were 21,745 cases of business-related computer misuse in the UK, according to the Office for National Statistics, many of which involved computer malware or similar attacks against businesses. A UK government survey, the results of which were released in April 2018, showed meanwhile that 43 per cent of UK businesses had suffered a cyber attack in the last 12 months.
“Civil and criminal judges in one building is a step in the right direction but it is the law and procedure that needs to be looked at if the fraud problem is really going to be addressed
Litigation Partner, Weightmans
‘Cyber law such as cybercrime, cyber security law and fraud – often with a cyber element – is a fast-developing area that cuts across the traditional legal disciplines,’ says Dan Hyde, a partner at Penningtons Manches. ‘A specialist court is an essential step in ensuring we can adjudicate these cases competently and produce lawyers and judges who, over time, become expert in dealing with them. At present there are only a few lawyers who have the breadth of knowledge or experience to competently deal with these types of cases, a fact I attribute to the historic division of lawyers into criminal or civil practice and the subsets within each; until recently many of my peers refused to acknowledge cyber law as a distinct legal discipline. This court will change that mindset.’
The new court, which is set to be completed by 2025, will replace the existing civil court, Mayor’s and City of London County Court, and City of London Magistrates’ Court. ‘An advantage of a specialist court is that it will be designed to accommodate facilities appropriate for large and complex cases,’ says Jessica Parker, Senior Vice Chair of the IBA Business Crime Committee and a partner at Corker Binning. ‘The ambition is that the case management of criminal and civil cases relating to the same conduct will be more joined up.’
The proposal is in line with the government’s plan to have fewer and better buildings. But, practitioners are concerned that this strategy does not take account of the overcrowded lists of existing courts. Southwark Crown Court, the court in which most serious fraud is currently heard, has a very busy list; trials are often delayed for months while space is found to hear them,’ says Parker. ‘The success of the new court will be contingent on both meaningful investment in staff and systems to operate it and appropriate reform of the investigation and prosecution to deal with complex, data heavy cases.’
Mark Surguy, a partner at Weightmans, acknowledges that any improvement in access to better facilities is welcome but voices concern that the court itself won’t be enough without an examination of the legal framework. ‘To my knowledge there is no planned change in law or procedure to tackle the fraud problem,’ he says. ‘Perhaps the presence of civil and criminal judges in one building is a step in the right direction but it is the law and procedure that needs to be looked at if the fraud problem is really going to be addressed head on.’
A key consideration will be what falls within the court’s remit. ‘The term cyber is so wide that its legal definition will need to be refined for the court’s jurisdictional purposes,’ says Hyde. ‘One can envisage a whole range of claims brought under the cyber umbrella and I doubt this combined court would be able to deal with such a deluge.’
London’s position as a recognized centre for resolving business disputes is not in question: English law is used in 40 per cent of global corporate arbitrations, for example. The need to consolidate this position is, though, heightened by the prospect of Brexit. Companies are reconsidering the location of their operations, while jurisdictions remaining in the EU are bidding to bolster their attractiveness as legal centres. For instance, Ireland has recently signed up to the International Swaps and Derivatives Association Master Agreement, enabling users to choose Irish law and the Irish courts to determine derivatives disputes.
London also faces competition in creating courts that engage with emerging legal issues and which provide state-of-the-art facilities. China launched the Hangzhou Internet Court, also known as the ‘Net Court’, in summer 2017. The court, based in Hangzhou in common with a number of large Chinese technology companies, deals purely with internet-related cases, from domain name disputes to online defamation. In the United Arab Emirates (UAE) the Dubai International Financial Centre (DIFC) is a major financial hub and has its own judicial system, while Qatar’s International Court and Dispute Resolution Centre aims at providing world-class court and dispute resolution facilities.
‘These could easily be seen as rivals to London. What the new court probably is really about is an attempt to keep attracting overseas lawyers and clients to London,’ says Surguy. ‘Fraud and cybercrime are international, cross-border issues, and these buzzwords will no doubt resonate with the international community who might be looking elsewhere for great facilities in which to resolve their fraud cases. The new facilities will enable London to continue to pitch for international business in an increasingly competitive market.’