Russian businessmen love to sue in London. However, local lawyers no longer want to work with them
Prigozhin tried to sue Bellingcat for “defamation”, but the lawyers abandoned his case due to reputational risks.
London law firms have begun to refuse to cooperate with Russian businessmen and companies. According to a Bloomberg article, the refusals are associated with possible risks for lawyers amid sanctions imposed after Russia’s invasion of Ukraine.
Over the past 10 years, Russian businessmen have preferred to turn to the London courts to resolve various legal issues, from divorce proceedings and defamation cases to international disputes. Thus, according to the material, in 2017-2021, Russia was one of the most active countries in London courts, and the Russians ranked second after the British in the number of cases in arbitration courts.
Following the outbreak of war, the leading London law firms Allen & Overy, Freshfields Bruckhaus Deringer, Linklaters, and Clifford Chance decided to suspend or close their offices in Moscow.
Several of Britain’s most prominent lawyers working with Russian billionaires have faced the prospect of US sanctions. The UK authorities have warned that they may ban local lawyers from offering their services in Russia.
In addition, writes Bloomberg, procedural and other restrictions complicate cases involving the Russian side, and lawyers can only receive payment for their services with the approval of the government of the country. But even with a special license to work with Russians, many banks refuse to process payments, one of the lawyers at the international firm Sidley Austin told the agency.
However, the agency notes that this does not prevent law firms from applying for appropriate permits. According to Bloomberg, their main motivation is generous fees.
As a key example, Bloomberg cites Russian businessman Yevgeny Prigozhin’s lawsuit against Bellingcat’s libel investigative project, which a London court dismissed in May. The process fell apart after the lawyers from Discreet Law, who represented Prigozhin’s interests, refused to participate in the case due to reputational risks.
In a statement, the company noted that it is “objectively impossible to find another legal agent for this process.” According to Bloomberg, an unnamed British law firm told its staff that “there would be nothing left of our firm if it took on the case.”
According to Bloomberg, reducing the number of cases involving the Russian side is detrimental to London courts and the UK economy. The legal sector generated £5.6 billion in revenue in 2020, according to a study by City UK, a human rights organization. In turn, the share of international disputes amounted to 74% of all cases considered by the UK arbitration courts in 2020-2021.