Russian litigants combating circumstances in London’s High Court are being compelled to seek out new illustration as the largest UK-based legislation corporations are more and more refusing to behave for them within the wake of the invasion of Ukraine.
Lawyers at a number of the high London corporations have warned the broader fallout from UK and different western sanctions focusing on these near the Kremlin may spell the top to the heyday of huge ticket Russian litigation within the capital.
Adam Greaves, litigation practitioner at legislation agency LK Law, mentioned that City legislation corporations had began to conduct a “sniff test” on potential Russian shoppers regardless of whether or not they face sanctions on account of the struggle in Ukraine. He added that he didn’t foresee sure Russian work returning to London in the long run and steered it might shift to locations similar to Dubai or Singapore.
“There are signs that law firms are steering clear of Russian work and are thinking twice about it partly for reputational reasons,” added Jonathan Fisher QC, a barrister at Red Lion Chambers.
In the previous, Russians litigants have flocked to London’s High Court attracted by the independence of the judiciary and a sturdy authorized system that not like the US doesn’t use juries to attempt civil circumstances, which makes the end result extra predictable.
Big legislation corporations, which usually make lower than 1 / 4 of their income from all litigation, are technically permitted to behave for sanctioned Russian shoppers however provided that they first obtain a particular authorities licence.
But because the west more and more severs its hyperlinks with Russia and targets these linked to the regime of president Vladimir Putin, legislation corporations, that are sometimes partnerships owned by probably the most senior attorneys, are turning their backs on considered one of their extra profitable shopper bases.
Russians had been the second-largest group of litigants by nationality, after British residents, to make use of the English courts to settle business disputes within the 12 months to March 2022, based on a survey by Portland Communications. It discovered that there have been 21 circumstances involving Russian litigants, together with 4 introduced by Russia state-owned financial institution VTB.
Several excessive profile circumstances have already been affected on account of legislation corporations dropping their Russian shoppers. In April, Freshfields advised the High Court it had ceased to behave for VTB, which was sanctioned earlier this 12 months.
It had been appearing for the financial institution, which is a defendant in a case introduced by the Republic of Mozambique over the so-called “tuna bonds” scandal, the place the nation borrowed from buyers purportedly to fund maritime initiatives. The case is about for trial subsequent 12 months.
Freshfields, which declined to remark, had beforehand condemned the Russian invasion in March. VTB didn’t reply to a request for remark.
White & Case, a US legislation agency, advised the High Court in April it was going to cease representing the Russian Federation in one other case on account of be heard later this 12 months. The agency mentioned in an announcement it was “ceasing all representations” of Russian state and state-owned entities and people of Belarus, the Kremlin’s closest ally.
The lawsuit pertains to a case introduced in London’s High Court by ex-shareholders in Yukos towards the Russian state over claims Moscow had unlawfully expropriated the belongings of the previous Russian oil firm. The lawsuit to implement an arbitration award was placed on maintain whereas a parallel case was heard within the Netherlands.
Ed Crosse, a previous president of the London Solicitors Litigation Association and a accomplice at legislation agency Simmons & Simmons, mentioned that whereas the struggle in Ukraine would have a bearing, there would nonetheless be authorized illustration obtainable.
“There will be fewer lawsuits coming to London from Russian companies and Russian litigants, who may now find it difficult to get lawyers to represent them, although there are still some boutique law firms that are actively seeking out Russian disputes work,” he mentioned.
Crosse mentioned he thought the chance of shedding Russian shoppers was overstated, definitely by way of income generated by most legislation corporations, including that cash may very well be constituted of work generated by the struggle, significantly by way of offering recommendation on sanctions and regulatory points.
“There should be limited impact on law firm profits because, for most firms, Russian related litigation was not that significant — firms may have just one or two partners who have Russia as their focus,” he added.
But these on the opposite aspect of authorized disputes involving Russian shoppers fear that legislation corporations turning their backs on Russian shoppers now seen as pariahs within the west will go away them struggling to pursue their claims and achieve entry to justice.
Tim Osborne, the chief government of GML, an organization representing ex-shareholders in Yukos, is going through this problem in each jurisdictions the place he’s pursuing Moscow. Dutch attorneys representing Russia within the different case in Amsterdam have additionally lately walked away from their shopper.
“It definitely benefits the Russian Federation. Our case started in 2005 and the defendants have sought to delay at every opportunity,” he mentioned.
London legislation corporations are actually court docket choices in different jurisdictions together with a current ruling made by a British Virgin Islands court docket, which despatched shockwaves via the authorized world.
Mr Justice Adrian Jack, sitting within the Eastern Caribbean Supreme Court, refused an utility by legislation agency Ogier, which didn’t reply to a request for remark, to cease appearing in one other lawsuit involving VTB Bank.
The decide mentioned in his ruling: “VTB may be a pariah. It is precisely when VTB is stigmatised as a pariah that VTB needs the best endeavours of their legal representatives to advise them. Even pariahs have rights.”