Oligarchs and foreign firms who use the UK courts to settle their multimillion legal disputes would be forced to pay a “British justice premium”, under a Labour government.
Foreign plaintiffs currently pay just a fraction of the real costs of running England’s commercial court system – on average just £1,930 a case.
But the percentage of cases coming before the courts, where at least one party is foreign domiciled, is now over 80 per cent.
Those cases make millions of pounds each year for City law firms – but the cost of court hearings is effectively being subsidised by the taxpayer.
Under Labour plans, to be set out by the shadow Justice Secretary Sadiq Khan, foreign litigants would in future have to pay a “fair price” to use the court service – which would subsidise other parts of the justice system.
Among the most high-profile foreign cases to be heard by the English courts system was that in which the late Boris Berezovsky sued the Chelsea owner Roman Abramovich for £3bn, which at the time was the biggest private court case in British legal history.
While the case cost the parties around £100m in legal fees, the total fees paid to the Government for the hearing are estimated to be less than £100,000. In total, court fees generated just £2.2m in income last year.
Other recent foreign cases include that of Prince Alwaleed bin Talal, a billionaire Saudi investor who was defending a claim brought by a Jordanian businesswoman.
Daad Sharab won her claim that the prince had failed to pay her $10m (£5.9m) commission for her role in brokering the $120m sale of a private jet.
Data recently compiled by the legal PR firm Portland Legal Disputes found the numbers of litigants using UK courts from the Middle East and Africa more than doubled in the 12 months to March.
A Labour source said they did not believe raising court fees for foreign litigants would put people off settling their dispute in London. “It is ironic that foreigners have greater access to British justice than British people,” they said. “I don’t think anyone believes hard-pressed British taxpayers should pay for foreign billionaires who come to London to fight their legal battles. ”Reuse content