The lord chancellor, Robert Buckland QC MP, gave a speech on the importance of legal services at the launch of TheCityUK's Legal Services Report Launch 2020.
It is a pleasure to join you today as TheCityUK launches its annual report on the state of our legal services sector and an honour to address such a distinguished group of colleagues. I want to apologise that I wasn’t able to be with you for the launch of last year’s report – there was the small matter of an election keeping all of us in Parliament busy.
The report comes at an especially important time – when it is more crucial than ever that we understand the strengths of the sector so that we can build on them for an even more successful future.
Let me start by saying thank you for the work you have all done to maintain the legal services sector in what has been a really difficult year for everyone and every sector of the economy. Your resilience is illustrated by the fact that, despite everything, the sector continues to post record revenue numbers.
The importance of legal services
As the report tells us, legal services contributed £22.2 billion to the UK economy in 2019. That accounts for 1.2% of the total Gross Value Added in the economy. That is a huge contribution to UK plc and our collective prosperity as a nation.
If we look at the gross economic and social impact in terms of GVA, including legal professionals working in other sectors of the economy, recent Law Society research estimates that the contribution in 2018 was closer to £60 billion.
Beyond the work in which you are directly involved, the legal services sector is also an enabler in our economy. It gives confidence to businesses, allowing them to trade with the certainty that there is a framework of fairness in the English legal system, as well as world-class UK legal professionals available to support them in coming to agreements and resolving disputes where they arise.
The contribution to our country of a solid legal system backed by a strong legal services profession is immeasurable, because it underpins our wider economic success. Simply put, our prosperity would be at risk without them.
One of the great advantages of our system is, I think, its flexibility and ability to react to the needs of businesses and the markets. The agile nature of the UK courts and English and Welsh Law was demonstrated recently when through the Financial List the High Court heard an Insurance Industry Test Case brought by the FCA. It quickly established the liability of insurers when it came to businesses closing down due to covid. It’s these kind of rapid decisions that provide market certainty in our system and ensures that English and Welsh Law continues to be attractive and competitive, which I will come on to later.
I would also like to take this opportunity to pay tribute to the judiciary. For whilst English and Welsh Law is certainly an asset, it is the breadth of expertise and experience amongst the judiciary, the integrity of UK judges and the fast and fair delivery of cases when combined with the flexibility of English and Welsh law which continues to make UK courts the world’s destination of choice for parties to resolve their disputes.
But I do first want to say something about covid and the way the legal sector has responded to it in this country. I am proud that we have been able to work with the courts, the judiciary, and legal professionals to mitigate the effects of the virus and keep the justice system moving safely throughout the pandemic.
Much of that has been achieved by investing in the estate to refit courts and tribunals where necessary and to repurpose them where possible, including the rapid expansion of technology to enable remote hearings via telephone and video equipment. The commercial courts have coped particularly well, and our Business and Property Courts have handled 85% of cases digitally since March. I want to thank you for the flexibility and patience you have shown as these changes to ways of working have become necessary.
Again, I think it speaks to the remarkable ability of our system to evolve. What we have seen throughout the pandemic is that the courts – and the law more widely – can adapt when it is necessary. In many ways, I think the process of justice could well be changed forever after the pandemic. But in reality, technology was already beginning to change it.
From smart contracting to electronic dispute resolution, lawtech is revolutionising the law. As the report demonstrates, the UK sector is developing at a phenomenal rate, with investment having tripled in the last two years to £290 million. The UK is home to 44% of all start-ups in Europe, my ambition is to ensure the UK continues to be the leading global hub in this type of innovation. In the years to come, it could be crucial to us maintaining a competitive edge in the legal services market.
That is why we have committed £2 million to help support emerging innovation in the UK and wider economic growth by establishing LawTechUK – a joint initiative between Tech Nation, the LawtechUK Panel and the Ministry of Justice, to transform our legal sector through technology and help us to keep ahead of our international competitors.
The UK punches well above its weight on legal services. We are the European leaders and second only to the United States globally. We continue to maintain our reputation as the leading centre for international dispute resolution, with this being a strong driver for commercial parties to opt frequently for their contracts to be governed by English and Welsh law.
But we must never become complacent and should always be on the lookout for ways to enhance our position. This has been a key focus of the government’s Legal Services are Great campaign.
The campaign’s aims are to grow our market share and promote UK legal services more widely in order to strengthen the UK’s place on the world stage. It has already led lucrative trade missions to China and Kazakhstan and in December I will host a virtual legal services mission focussed on the African continent.
The overall theme for the mission will be 'UK-Africa Collaboration and Opportunity in Legal Services’ and it will be an opportunity to promote and facilitate growth for UK legal services in priority African markets, focusing on Nigeria, Ghana, South Africa and Kenya, by building business networks and fostering a shared positive future for the UK and Africa through the law and legal services.
We recognise that we have a wider role to help the sector in securing global opportunities, which is why we are being proactive in pursuing international trade agreements, both through Free Trade Agreements with priority markets and through our bilateral engagements.
I know many of you are keen for certainty in relation to our future with the EU and I can understand why – certainty allows you to plan properly for the future and it breeds the confidence that every business needs and wants.
Intensive talks have been underway for some time, with both sides examining relevant legal texts. As the transition period ends, we will become a sovereign state whereby we will have recovered our economic and political independence, which will enable us to control our own laws and our own trade.
The government’s preference remains to secure an FTA similar to the one the EU has with Canada, providing it guarantees that independence, but we will make sure that we are prepared for all possible outcomes.
While not part of our negotiations with the EU on a comprehensive free trade agreement, civil judicial cooperation is of course an important part of the fabric of our system. The Government’s position remains that we want to re-join the Lugano Convention as an independent Contracting Party. We are still awaiting the decision of the other Contracting Parties, including the EU, Denmark, Switzerland, Norway and Iceland. In anticipation of this, the domestic ratification procedure will be underway shortly and implementation is progressing.
As you will be aware, the government has been focussing on preparations for the end of the transition period and more specifically business readiness. You are the professionals and you know best on this, so I want to hear from you. I am interested in how government can continue to support you to best effect.
The UK will soon be an independent trading nation, able to set our own direction for future trade deals. As you will have seen, we have now our first major trade deal as an independent nation – with Japan. This is a historic moment, providing legal certainty of market access for UK legal services suppliers in Japan. It ensures non-discrimination of suppliers, no limitation on the number of suppliers who can provide services in Japan, and continued support for dialogue on mutual recognition of professional qualifications.
I am pleased to say that there are also new commitments on Domestic Regulation which will improve transparency and clarity for providers, including streamlining applications and licensing processes. We see this, and recent amendments made to Japan’s Foreign Lawyers Act, as a starting point for greater legal services in future.
The Asia Pacific market is a considerable one, and we want to use the FTA with Japan to build momentum in the region. We are also keen to use it as a stepping stone towards joining the Comprehensive and Progressive Agreement for Trans- Pacific Partnership, an important opportunity to strengthen UK presence in the area.
Elsewhere we are gathering momentum on our other Free Trade Agreement negotiations. In particular, the United States remains a priority market for us, as we know it is for many of you. Following the significant progress made in talks to date, both sides are confident that we can reach a comprehensive agreement which would provide a significant and mutual benefit to our economies. We are ready to continue negotiations following the recent election, and we are engaging with US partners on a bipartisan basis, at the federal and state level to pursue a wide-ranging Free Trade Agreement.
Rest of World
Looking to future negotiations, you may have seen that the UK and Canada reached agreement in principle on a Trade Continuity Agreement. Securing this continuity agreement will provide an excellent basis on which to consider ways to further strengthen the relationship in the future and negotiate a new UK-Canada trade deal in 2021 that is tailored for the British economy.
We also continue to progress Free Trade Agreement negotiations with Australia and New Zealand; and are continuing to engage bilaterally with countries such as Brazil and India who have large legal services markets too.
Let me finish by saying again how grateful I am to the sector for your enormous and growing contribution to the UK’s economy, as well as your wider input to our prosperity as a nation.
As we look ahead to a future that seems very different than it did this time last year, I want to do everything I can to support you – through the pandemic and beyond – to grow the influence of the UK legal services sector both at home and abroad.
As your Lord Chancellor, I want to work with you to achieve that aim, so please don’t hesitate to let us at the Ministry of Justice know what more we can do.