English Common Law: Britain’s greatest soft power
From London’s boardrooms to Abu Dhabi’s courtrooms, English law shapes the rules of global business as it quietly but decisively finds itself at the heart of international deals and disputes.
The late Joseph S. Nye defined ‘soft power’ in the 1980s as “The ability to affect others to obtain the outcomes one wants through attraction and persuasion rather than coercion or payment.”
One of the best examples of this is the UK legal industry’s attractiveness, driven by the importance of English Common Law worldwide.
The UK has a head start by leveraging its imperial past to drive influence, but the credit should be given to its ability to maintain that influence. And the numbers support this.
This week, a new report by TheCityUK, published in partnership with Barclays, found that the industry contributed a record £38bn to the UK economy in 2024, equivalent to 1.5 per cent of gross value added (GVA), up just over 3 per cent year on year, while also achieving a trade surplus of £8.9bn.
The report highlighted that English Common Law formed the basis of the legal systems for approximately 27 per cent of the world’s 320 jurisdictions.
It dominates international contracts, alongside New York law, as English law governs about 40 per cent of the world’s cross-border business and financial transactions. This explains why the High Court is one of the world’s leading centres for international commercial dispute resolution.
Its influence in business contracts is also a significant factor in why London has more than 200 foreign law firms from over 40 jurisdictions, and all the world’s top 50 law firms have offices in the City.
Deputy Prime Minister and Lord Chancellor, David Lammy, said, “Our dynamic, innovative and trusted legal system is fundamental to ensuring business in this country can thrive and benefit all four corners of the UK.”
The Secretary of State has recently shown his support for the UK legal sector, describing it as the “hidden super-power of our economy”. This effort was underscored by his decision to Chair a new expert panel on Monday, which is focused on future-proofing the UK legal sector.
The panel brought together senior legal figures, alongside representatives from business groups, including the CBI and TheCityUK. Their discussions centred on strategies to “reinforce English law’s status as a leading choice for international business”.
Eyes out for competitors
This focus arises in a competitive landscape, as New York law remains a powerful force. Yet countries in the Middle East and Asia are actively developing their own legal systems, often drawing on English law to enhance their appeal to international business.
In Arbitration, Hong Kong and Singapore have invested heavily over the years in legal systems based on English common law.
However, the newest player is Abu Dhabi, which became the first and only jurisdiction in the Middle East to adopt the direct application of English law.
The UAE’s capital is currently on a worldwide sales pitch, trying to woo investors, businesses and high-net-worth individuals, as the UAE aims to double its GDP to $3tn by 2031.
The Abu Dhabi Global Market (ADGM) established ADGM Courts under English law in 2015 to focus on civil and commercial disputes, modelled on the English courts and staffed by English-speaking judges. The Chief Executive of ADGM Courts, Linda Fitz-Alan, revealed on Wednesday that the court has handled almost 500 cases this year.
Speaking at Abu Dhabi Finance Week, the UAE Minister of Justice, Abdullah Sultan bin Awad Al Nuaimi, explained that to foster public trust, the UAE must set global benchmarks for judicial excellence.
As global competition intensifies, English law’s legacy and adaptability will need to be at the heart of the government’s focus if it wants its quiet power to remain a driving force in the world.
Eyes on the Law is a weekly column by Maria Ward-Brennan focused on the legal sector.