London's domination of commercial claims is shrinking - gradually

Claims issued in London account for almost three-quarters of all business and property court work – despite efforts in recent years to spread dispute resolution  nationwide.

Figures obtained by the Gazette show that 5,892 claims were filed in London's Rolls Building in 2021/22, an increase of 6% year-on-year and 37% more than in 2019/20.

There are signs of a gradual move away from the capital. In 2021/22, London-issued claims accounted for 72% of the total across the country. The London proportion was 75% in 2020/21 and 79% in 2019/20.

But there are still huge disparities in the use of London courts compared with those elsewhere in England and Wales, according to the figures obtained through a Gazette freedom of information request. Manchester, the next most common place of issue, had 717 claims (an increase of 5.6%), making up 9% of the total. Birmingham (537 claims, making up 7% of the total), Leeds (396 claims, 5%), and Bristol (235 claims, 3%) were the next most common.

The court centres at Newcastle and Cardiff were the only ones where there was a fall in claims issued in 2021/22.

Overall, the number of claims in the business and property courts has risen sharply in the past three years, from 5,398 in 2019/20 to 8,082 in 2021/22. Such volumes have also resulted in net fee income rising significantly. Fees recouped in the Rolls Building were around £6.6m in 2021/22 – accounting for 71% of the nationwide court income but representing an 8% fall year-on-year.

Manchester Civil Justice Centre received £787,000 in net fee income last year, while Birmingham received £580,000 and Leeds £553,000. The court at Newcastle received £58,000 net income in fees from business and property cases - the lowest in the country.

Although all the money received through fee income pays for the cost of the court system generally, the Gazette has heard reports that some judges have encouraged people to issue in their court to ensure the fee income is reinvested in that particular building.

Business and property courts handle the commercial court, business list, Admiralty court, circuit commercial court, the technology and construction court, and the insolvency, companies and competition lists.

The majority of claims being issued in London will not be a surprise, given that many claimants are likely to choose the Rolls Building.

But the continuing high proportion comes despite practice direction 57AA, issued in 2018 for the business and property courts, which stated that most claims with ‘significant links’ to a particular circuit outside London or the south east should be issued in the most local district registry. If a claim had significant links with more than one circuit, the claim should be issued in the location with which the claim had the most significant links.

The new rules set out that courts should have regard to the nature of a claim and the availability of a specialist judge when considering whether to transfer the case.

Earlier this year, Mrs Justice Cockerill, the judge in charge of the commercial court, said she was ‘actively looking’ for cases that could be heard outside London.

According to minutes from a meeting of the commercial court users group, the judge had ‘reminded users that while that much of commercial court business is international, so far as more domestic business is concerned, the commercial court (like the wider business and property courts) is moving away from a London-based paradigm’.

Judges have on occasion sought to reinforce this message when hearing applications to move cases to the capital. In 2019, His Honour Judge Eyre declined to move a major group action that had been commenced in the business and property courts in Liverpool. The judge rejected the defendant’s transfer application after finding neither the value of proceedings nor the complexity required the matter to be transferred to London. He confirmed that an appropriate specialist judge would be made available to hear matters in Liverpool where required.

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