The Rule of Law and the Future of the Sector
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Attorney General speech to London Law Expos on the UK’s long commitment to the Rule of Law
It is a pleasure to be here in the City of London and to speak to many of those contributing to the UK’s strong reputation as a leading global centre for the provision of international legal services. Our legal systems are amongst the world’s most supportive for business. Our strong international focus facilitates trade and investment worldwide. The contribution of legal services to the UK economy underpins both the administration of justice and commercial transactions.
And the numbers show just how successful the legal services sector has been: in 2012 it was worth over £20 billion, or 1.5% of UK GDP and contributed some £4 billion in export value. There were over 300,000 people employed in our legal services sector with over 200 foreign law firms operating in London and elsewhere in the country, representatives of many of which I know are in this room today. English law is also the global commercial law of choice, and is renowned worldwide for straightforward and fair dispute resolution. It provides maximum flexibility for business when negotiating contracts and a high level of predictability in court disputes through the consistent use of precedent.
As a result, this country is the market of choice for many international businesses. As Attorney General, I want to see that strength and resilience continue and increase.
Of course we lawyers can’t take all the credit. There are other things that make the UK attractive to international business.
I think the way that the United Kingdom has interacted with the world around us has played a big part. We are an island nation but for centuries we have been an outward looking people. The United Kingdom is a country committed to free trade. A country that is open to the rest of the world to come to us to do business. I believe that our openness has been a major factor in encouraging firms to come to the United Kingdom to set up shop.
And of course there are other attractions in coming to this country. They include the availability of a skilled & diverse workforce, good international transport links, global access to markets, close proximity to large clients and a deep pool of talent with a wide range of technical expertise.
There are two additional assets worth mentioning: the use of English as an international language of commerce and a very beneficial geographical position with a time zone that enables the working day to overlap with key international trade markets in Asia, Africa and the Americas. All this puts us at the centre of the world– but addressing this audience I want to focus on the contribution that lawyers make to the City of London and to the wider commercial world.
As the economy grows firms are taking on more workers; many existing businesses are being expanded or new ones started. As this trend continues the demand for commercial legal services will grow. So, as the world economy comes out of recession, the international demand for UK legal services will also increase.
The UK legal sector is prepared for this. As you all will know – but I think it bears re-stating – being a lawyer is not just about going to court. The expertise of lawyers also lies in many other areas: drafting contracts and leases; advising clients on employment law; ensuring that there is a clear legal framework to underpin the activities of commercial enterprises.
Nor are lawyers “just” lawyers. Many have expertise in other disciplines to ensure that the work that they do and the advice that they give is based on a sound understanding of the areas that they are dealing with. The types of work are too numerous to mention but UK lawyers are “subject matter experts” in many of the commercial areas in which they work.
It is my view, though, that the strength of our legal sector is also due in no small part to our long commitment to the rule of law. This, I believe, is of central importance to the British economy.
I do not want this speech to be a historical overview of the rule of law but the English philosopher John Locke made the point in 1690 that ‘Wherever law ends, tyranny begins’. The classic modern definition of the Rule of Law – and by modern I mean 1885 - comes from the jurist and constitutional theorist AV Dicey. I won’t read the whole of what he said but two parts of it are of particular importance to the success of the City of London and its commercial and legal sectors. Firstly, Dicey said that the rule of law meant that “no man is punishable or can be lawfully made to suffer in body or goods except for a distinct breach of law established in the ordinary legal manner before the ordinary Courts of the land.” He also said that when we speak of the “rule of law” we mean not only that with us no man is above the law, but that here every man, whatever be his rank or condition, is subject to the ordinary law of the realm and amenable to the jurisdiction of the ordinary tribunals.
We should not lose sight of the fact that the success of the City of London and of UK businesses more widely has been built on adherence to the rule of law over the years since then.
Similarly, our financial services industry is one of the world’s largest and most successful. It would not be so without the rule of law that underpins it and the legal services offered by many of you in this room.
The rule of law providing a framework for transactions to take place; legal services ensuring that that framework is adhered to and that action is taken when it is not. No arbitrary punishment or removal of property. Independent judges in independent courts. This background is a significant reason for the success of our legal services both at home and abroad. It is also a reason why people choose to invest in Britain.
When you do business in the UK you know that it will be on the basis of tried and tested legal foundations.
The lawyers will be committed to the rule of law. Both main branches of the profession are bound to act in accordance with it: the first mandatory principle which solicitors must adhere to is to “uphold the rule of law and the proper administration of justice”; the first sentence of the foreword to the Bar Standards Board Handbook is “Justice and the rule of law are fundamental to our society.”
There is even an Act of Parliament – the Access to Justice Act – which requires legal regulators to support the constitutional principle of the rule of law. The rule of law is therefore pervasive in our legal system.
This commitment, built up over time and affirmed again and again by our courts, means that when people come to the UK to do business they know what they will get: a framework of law that will be properly applied and upheld. Lawyers acting fearlessly but fairly in the interests of their clients. A judiciary required by their oath to discharge their duties without fear or favour. Judges and courts free from executive interference.
As a Conservative of course I want to keep laws and regulations to a minimum, but we should recognise that laws and regulations are necessary to underpin commercial activity. And I think that this is where the City of London has a significant commercial advantage. When you set up business in the City of London – or elsewhere in the UK – the rules you have to follow are clear. You also know that although you have to abide by the law you will receive the protection of the law as well.
All companies know that they will be judged by clear rules applied in accordance with the law. This is particularly important for foreign companies. The advantage of investing in Britain is that you will be treated fairly. Foreign companies come to Britain, bringing with them jobs and investment, because we are a stable place to do business.
Any disputes which do arise can be resolved in a number of ways, for example mediation or arbitration, but where there is a need to go to court companies know that they will be represented by well trained, competent lawyers operating to the highest ethical standards. Their cases will be heard by an independent judiciary free from executive control or influence.
Of course the United Kingdom is not unique in this but we do have a longer history than many.
In that connection I do want to mention an important anniversary that is coming up next year – 800 years since the sealing of Magna Carta. That ‘great charter’ which established for the first time the principle that everybody, including the king, was subject to the law. Famously, the 39th clause gave all ‘free men’ the right to justice and a fair trial. Whilst ‘free men’ comprised only a small proportion of the population in medieval England, this was still a significant milestone on our historic journey along the road to the modern concept of the rule of law.
The enormous importance of Magna Carta and its influence is in little doubt. For example some of its core principles are echoed in the United States Bill of Rights. We will be marking the anniversary by exploring how its values can offer solutions to achieving commercial, political and social goals in the 21st Century at the Global Law Summit in February next year.
This will be a world-class conference showcasing the UK’s unrivalled legal expertise. It is not just an 800th birthday celebration, but also a forum for UK law firms and lawyers to develop the business opportunities created by their world-class reputation and to celebrate the rule of law as the foundation of our legal system. As the Prime Minister has said, the Global Law Summit is yet more evidence that Britain continues to lead the way in promoting free enterprise, economic growth, and the rule of law around the world.
I am very pleased to see the wide variety of speakers and the varied programme which has been announced. It is a real testament to the high esteem in which the UK legal sector and its values are held around the world that so many individuals and organisations are coming together at this event. It promises to be a unique showcase for UK legal expertise but also an opportunity to show how the legacy and values of Magna Carta are still relevant today.
The trust that businesses feel able to place in our legal system, and the security that this gives them to invest and grow their businesses here, is the legacy of our ongoing commitment to the rule of law.
Business confidence also relies on a robust criminal law. Effective laws and law enforcement fosters and maintains the integrity of markets and provide a transparent environment in which to do business. The Government keeps the arrangements for tackling economic crime and corruption under careful review. A notable example is the establishment in October 2013 of the National Crime Agency.
Last week we saw a landmark – the first guilty plea, and so the first conviction, to arise out of the investigation by the Serious Fraud Office into manipulation of the London Interbank Offered Rate, or as it is commonly known, LIBOR.
This audience will not need me to spell out the effect it can have on the attractiveness of doing business in the UK if such crucial benchmarks can be manipulated with impunity. Thanks to the efforts of the SFO and others, a clear message is being sent to the world that this cannot happen. No matter how complex the crime and the challenges in uncovering it, we can market ourselves on the commitment of our law enforcement authorities to tackle the most challenging cases.
Prosecutions of this scale and complexity are certainly a challenge. That we are nonetheless taking them on, and securing convictions, is testament to the enduring effectiveness of what is called the Roskill model – namely, joint investigation and prosecution by multi-disciplinary teams that include legal, financial and digital forensic experts, as found in the SFO.
This is important. The impact of economic crime and corruption damages legitimate business by causing financial loss and, for example, undermining confidence in the operation of markets. So we must continue to look at what we can do to combat it wherever it occurs. That is why the Government is reviewing its approach to combatting corruption, and exploring ways to develop and improve its response to economic crime.
What might that mean? I have spoken before about looking at the current law relating to corporate liability for economic crime, and whether new criminal offences are needed to ensure it is not just individuals who can be held criminally liable. We are looking too, following the UK’s successful G8 Presidency, to increase corporate transparency through the establishment of a central registry of company beneficial ownership. Such enhanced transparency would support tackling money laundering, the financing of crime, and assist due diligence enquiries by business.
The United Kingdom - a modern democracy operating under the rule of law – is and has been an example to the world. The UK legal sector has a great reputation internationally.
Many of the countries which are developing their own doctrines of the rule of law are doing so because of the benefit that it has brought to this country and, very often, they are doing so with help from British lawyers.
Our democracy and our world renowned legal services give us an important role in helping countries abroad to develop their own concepts of the rule of law. The British government is helping many countries to build their capacities for good governance based on the rule of law.
But it is not just the government that is doing this. Much is also going on pro bono.
I know that Allen & Overy has an impressive and long-running collaboration with the Rwandan justice sector, providing nearly 3,300 hours of pro bono advice and 450 training sessions to lawyers and judges. The work is aimed at building capacity in the legal system which was almost completely destroyed during the genocide.
In 2013/14 Clifford Chance provided the equivalent of £18.1m in lawyer time doing pro bono work, it had 27 client collaborations on community projects and 4153 Business Services volunteering hours. This was working in a number of areas including Access to justice, education and finance.
I know that lawyers at Slaughter and May provide teams of volunteer advisers to staff two London law centres: the University House Legal Advice Centre in Bethnal Green and Islington Law Centre, and an additional team of qualified litigators serve as Honorary Legal Advisers at the RCJ Advice Bureau. They also provide their charity partners with pro bono support whenever it is required.
Freshfields’ pro bono programme focuses on two themes: the rule of law and the Millennium Development Goals. Over the past four years their team of London PAs and document specialists has dedicated 1,700 tapes and 2,100 hours to South West London Law Centres (SWLLC), providing on-site support to their caseworkers.
I also note that as part of national pro bono week this year there is to be panel at the Law Society on achieving more internationally. It will be discussing international pro bono work in light of the joint work with the Department for International Development.
The Bar Council, too, works in many jurisdictions on projects to train and support lawyers in promoting the rule of law, including advocacy training programmes in India and Pakistan, and young practitioner exchange programmes with China, Russia and South Korea. Through these initiatives our rule of law standards are filtering into other legal cultures.
These are all laudable examples of international work, and I know there are many more.
Whilst I am on the subject I want to pay tribute to the huge number of lawyers and law students at home, up and down the country, who provide their services voluntarily and free of charge. These dedicated lawyers and students are providing legal services to those who would not otherwise have access to it. They are acting in the best traditions of both branches of the profession in ensuring that people of all circumstances and in all types of cases can get the advice that they need.
So I think the legal services sector in the City has a great future.
The concept of the rule of law is an asset to this country both at home and abroad. It brings us jobs and investment. It is also a great export both in the number of our lawyers working abroad, acting in the best traditions of the rule of law, and in the number of countries looking to us as an example.
We should be proud that so many countries are eager to emulate us and should not be insular or worried about it. The more countries that have clear and enforceable laws, the more opportunities there will be for British companies to invest overseas secure in the knowledge that their rights will be respected. We shouldn’t forget that the revenue generated from overseas investments also aids the British economy. This is not just philanthropy. It is self-interest too.
Given its long history I have no doubt that this country, and this City, will adapt to the challenges as other countries develop more secure legal systems. It will continue to thrive and to thrive under the rule of law which has served this country so well for so long.