The adoption of English law by foreign commercial courts is not the boon it is generally assumed to be, according to a thinktank study. In a report attacking what it calls complacency and lack of investment in the justice system, the Social Market Foundation says that 'while the "internationalisation" of English law has many upsides, it does also bring with it several risks.' 

Action is needed to 'protect English law from being undermined through its use by other jurisdictions, who are offering English law-based adjudicative services but do not have an interest in sustaining the integrity of English law over the long term,' author Richard Hyde concludes. 

The report, Law and the open economy: Securing the future of English law and civil justice system for 21st century prosperity, is based on the findings of a 'high-level round table' of politicians, legal academics, practitioners and economists, as well as a poll of 1,000 businesses. One theme that emerged was the advantage of common law systems for facilitating commerce. The report cites research suggesting that common law countries have faster rates of economic growth than civil law jurisdictions. 

However past success has encouraged complacency which puts the future of English law at risk. The survey of businesses appeared to show that the rule of law was taken for granted. Meanwhile, legal institutions 'are working less effectively than they should be'. England and Wales falls 33 places behind Singapore in the ease of enforcing a contract, for example. English law also lags behind in dealing with technological advances and environmental, social and governance (ESG) issues. 

The report recommends:

  • That English law and the civil justice system should be recognised more clearly 'as an indispensable element of the social infrastructure', with a higher priority among policymakers. 
  • Structural reform to the civil justice system, including getting the current court reform programme back on track. Reforms should include the wider use of fixed recoverable costs. 
  • Modernisation of the corpus of English law, including filling gaps exposed by developments in technology, patterns of commerce and business models. 
  • 'Internationally focused efforts' to protect and promote the English legal system. The government should investigate 'whether legislative action might be needed to protect the quality of English law from misuse by other countries'.