Two contrasting statements were made last week about Europe (and I include the UK in the catch-all of wider Europe, since the statements below cover both entities without strain).
First, Jamie Dimon, the CEO of JPMorgan Chase, said of Europe: ‘You’re losing. Europe has gone from 90% U.S. GDP to 65% over 10 or 15 years. That’s not good. We’ve got this huge, strong market and our companies are big and successful, have huge kinds of scale that are global. You have that, but less and less’.
And Michael McGrath, the EU Commissioner for Democracy, Justice, the Rule of Law and Consumer Protection, said on the publication of the EU’s 2025 rule of law report: ‘The European Union stands for legal certainty — and with that comes economic stability and prosperity …. The rule of law is not only vital for democracy and security, but also for our economy. This is our competitive edge.’
He was joined by two other Commissioners who said the same thing, tying the rule of law to economic growth.
Justice for growth is now a big thing, as I wrote recently – indeed it seems to form a regular feature of these articles, since the UK government has focused so strongly on legal services in both its recent industrial and trade strategies, which aim to lift our country’s economy.
If the values espoused separately by Jamie Dimon and Michael McGrath were to put on boxing gloves and meet in the ring, which would win? Is the rule of law just a wimp trying to puff up its chest and boast? Would it be knocked out in a single blow by the economy which supports gigantic global companies, even if that economy’s rule of law weakens or disappears? Or is it a matter of stamina, so that if the rule of law can survive a few rounds, it would be stronger than the gigantic global companies, on the basis that they are slowly undermined at home by their government?
This is the fascinating live experiment through which we are all living with events in the USA. We will actually be able to measure whether the rule of law amounts to much.
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For instance, how much difference will it make to the US economy and US inward investment that economically active people are seized off the streets by masked men on the basis of their presumed immigration status, and then shipped off without due process to overcrowded detention centres? How much difference will it make to the US economy that law firms and universities are attacked and undermined by the government for their presumed political views? How much difference will it make that US judges who issue decisions against the government are then abused by the government and its supporters?
You can add your own examples. But we will find out in due course whether the EU and the UK are just whistling in the dark with a ‘justice for growth’ mantra.
There is strong evidence to back up the EU and the UK’s claims. We know from the global arbitration industry, for instance, that companies prefer to have their disputes settled in countries which have a stable rule of law. London (and New York and Paris and some others) are global legal centres because dispute settlement flows from countries with shaky justice systems to those where predictability, zero corruption and sound regulation are established.
Will New York’s current status be affected, for instance because those arriving at US borders for an international arbitration find their phones seized and searched by agents at the airport, are taken off for long and aggressive questioning, and maybe then deported? Or even by something less direct like the use of tariffs as a weapon to punish arbitration-affected countries for their internal policies?
There could be a long wait to find out.
Interestingly, judges appear to be the crucial ingredient. The EU rule of law report spends five pages on the importance to the rule of law of the quality and independence of judges and efficiency of court infrastructure, and a mere three paragraphs on lawyers.
Similarly, it turns out that judges in the USA are the only ones able to hold the current administration to account, regardless of whether those judges are appointed by Republicans or Democrats.
We in the UK have no choice but to root for the rule of law, not only because it is the right thing to do, but because – in the absence of our possessing sufficient global companies – our economic strength is partially dependent on it.
Yet the rule of law is not an aggressive fighter trained to land knock-out blows. It takes time to be appreciated through its passive qualities of stability and fairness.
We should all chant together: ‘Go, rule of law, go!’
Jonathan Goldsmith is Law Society Council member for EU & International, chair of the Law Society’s Policy & Regulatory Affairs Committee and a member of its board. All views expressed are personal and are not made in his capacity as a Law Society Council member, nor on behalf of the Law Society
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