When the world’s ‘big four’ jurisdictions are ranked by key risk factors, the governing law of England and Wales takes the top spot. New York takes second place. Germany is third and France is fourth.
That is the conclusion of veteran litigator Philip Wood KC. Wood, a former Allen & Overy partner, university law lecturer and author, set out his conclusions at a discussion event at magic circle firm Allen & Overy sponsored by the Law Society.
His risk comparison is based on 13 main areas, which include ‘predictability’, ‘business orientation of the legal system’, ‘freedom of contract’ and ‘courts, litigation and arbitration’. The findings are set out in a new book by Wood, ‘Governing Law Risks in International Business Transactions’.
Wood said the ‘big four’ jurisdictions represented the ‘main families of law’ to which most other jurisdictions belong. These are the American common law group (11 jurisdictions); English common law group (85); the Napoleonic group (86); and the Roman-Germanic (34).
Former commercial and appeal courts judge Dame Elizabeth Gloster said ‘predictability and certain outcomes’ were the most important features of English law for commercial parties in dispute. She also highlighted the legal system’s respect for ‘party autonomy’.
A deterrent to choosing England or New York governing law is the cost and scale of pre-trial discovery, panel member Antoine Maffei, founder of French firm De Pardieu Brocas Maffei, pointed out.
Is there a downside for a jurisdiction featuring in the top-four for governing law? Wood reflected: ‘Once jurisdictions start to compete… the legal system no longer belongs to us. It becomes owned by someone else.’
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