News

France to set up English-style financial disputes court and ‘hire people with experience in common law’

By on

Paris eyes London’s legal crown

France has revealed ambitious plans to set up its own “special” English court to hear commercial law disputes post-Brexit.

In a move many will see as an attempt to snatch London’s legal crown, finance minister Bruno Le Maire said:

We will create a special court to handle disputes relating to financial contracts governed by English law once the UK leaves the EU. All proceedings will take place in English.

This may well be a smart move on Le Maire’s part: many loan and derivative contracts in Europe are based on English law principles, and uncertainty about their enforceability after Brexit remains. But do lawyers think it is a good idea? We asked Nigel Jones, a QC at Hardwicke, what he made of Le Maire’s revelations. He told us:

This is an interesting development and shows how competitive the market is for dispute resolution services. If existing contracts already provide for both English law and English court jurisdiction then the French initiative is likely to prove irrelevant to such contracts. If this is an attempt to create a new, neutral and elective jurisdiction for the resolution of disputes post Brexit then its success will depend on the quality of the tribunals and their procedures.

It’s also worth noting that elsewhere in his speech, Le Maire, speaking at a banking conference at the Economic Club of New York, said:

We will hire people with experience in common law, regardless of where they come from.

It’s a sentence that could be lost in Le Maire’s lengthy speech, but it signals a clear nod to English commercial lawyers. The English legal system is very uncharacteristic in its adoption of common law; France — as well as Germany, Greece, the Netherlands, Russia, Spain and many more — is a civil law country. The only other common law countries in Europe outside of the UK are Ireland and Cyprus.

Later Le Maire, referencing Greek mythology, described himself as the Hermes to President Emmanuel Macron’s Jupiter. Indeed, this English court revelation seems characteristic of the pro-business approach adopted by France’s former investment banker leader. Take a look at these other snippets from Le Maire’s address:

“France, and Paris as its main financial centre, will be open, open-mined, open to all talent, open to innovation, open to each and every one of you.”

“In Paris you will also find a complete financial ecosystem, the whole range of financial activities is present… In the future, we will continue to build on our strengths. Paris is already a great place to do business and we are going to make it even better.”

These points lead seamlessly to the pivotal question: “is Paris the new London?” The French capital is certainly far closer in size to its other new-London competitors, such as Dublin and Luxembourg, leading to much speculation about its ability to cash in from Brexit.

Unfortunately like so many Brexit-related questions, the answer at this stage must be “we’re not sure yet” — but Le Maire’s recent revelations seem an early indication of Paris’ intentions.

Watch Le Maire’s speech here (starts at 48 minutes):

For all the latest commercial awareness info, and advance notification of Legal Cheek’s careers events, sign up to the Legal Cheek Hub.