Exclusive: City law firm boss on the rise of US-style class action suits in Britain
In a wide-ranging, two-part interview, City A.M. sits down with Natasha Harrison, the Chancery Lane-based managing partner of global law firm Boies Schiller Flexner, which has around 400 staff in 11 offices around the world.
Yesterday, Harrison zoomed in on the impact of Brexit on Britain’s legal landscape, while today she discusses the rise of class action lawsuits in the UK, increasingly defining the UK’s legal ecosystem.
Class action suits are on the rise in the UK, just look at the one against Glencore your firm is working on. It seems the UK legal system is gradually moving to a much more US style of litigation. Do you agree?
The UK has traditionally lagged behind the US in a very significant way when it comes to class action lawsuits. In part that’s because our class action mechanism is not as sophisticated in the courts and partly because institutional investors in the UK have less of an appetite to bring those types of actions.
However, there is a shift taking place, institutional investors are recognising not only the duties they have to recover losses where there has been financial misstatements by corporates and the English court system is sharpening up its process of procedures to ease the bringing of such claims.
The UK has lagged behind the US in a very significant way when it comes to class action lawsuits
However, I don’t foresee that we will shift wholesale to the US way of doing things without a meaningful change to process. That’s because the US style of litigation is what is called “opt out”, so a class is certified, and everyone is deemed to be included in it. But in the UK you have a positive “opt in” system which operates as a natural check and balance on turning into a complete US style of litigation.
Despite this fundamental difference, is the face of litigation changing?
Yes, litigation and dispute resolution and the implications for markets and clients. Litigation has become increasingly sophisticated and the very best lawyers will use the law to both drive value and to mitigate risk rather than being caught up in the process. It’s increasingly being seen as a very important part of the toolbox in financial and corporate institutions. In this regard, litigation opportunities will only increase post-Brexit.
We’re already seeing more restructuring litigation into creditor litigation and recently acted for the noteholders of McLaren in their dispute over the company’s use of the J. Crew “trap door” mechanism. We expect to see a significant increase of activity in the distressed debt markets and in complex contractual and financial claims.
The pandemic has changed the way we work and interact with each other. How has Covid affected business for you?
On the one hand the English legal system’s transition to remote working has been seamless and that is a credit to the English Courts who the day after lockdown were operating remotely. What has been different is doing trials and significant hearings remotely, particularly preparing for them and cross-examining witnesses. What it has demonstrated though is that it is perfectly possible to run high profile, complex hearings without having to be in the same room. One consequence will be a reduction in the need to travel for international arbitration cases, for example, when we emerge from Covid.
The London office which you set up has been ranked third for female equity partner representation in the City and first for LGBTQ+ representation by two Law360 surveys in London. How important is this for you?
It’s fundamental to our business strategy. Diversity needs to be celebrated, not tolerated. In reality, diverse teams generate better results for their clients because they can offer different viewpoints and opinions. We reach answers as a diverse team that we wouldn’t reach alone. It also mitigates against the risk of ‘group think’ which can be not only risky but again generate the wrong result.
Diversity needs to be celebrated, not tolerated
What does your firm do to promote equality and diversity?
In terms of how we promote equality and diversity, we make sure there is proper training, support and mentoring throughout the whole of our firm. We recently engaged external consultants to audit our firm and work out what we could be doing better as an institution, what checks and balances we can put in place and what investments we can make to ensure that we build a truly diverse firm from 2021 and beyond.