Litigation 2025

Litigation in 2025

The global economy appears to have turned a corner in 2024. The combination of declining inflation, decreasing interest rates and more accommodative monetary policies in most G20 economies has strengthened international trade and led to a steady global GDP growth of over 3% in 2024. This has led many corporations to increase their litigation spend and budgets, and to an increased appetite for litigation.

Whilst the global economy shows signs of improvement, the global litigation landscape continues to be dominated by significant geopolitical risk: Russia and Belarus-related sanctions have impacted commercial activity across the globe, while energy and climate change-related regulation and conflicts in Ukraine and the Middle East continue to be politically polarising issues.

Europe

London remains a popular choice for dispute resolution. It is the world’s leading centre for international dispute resolution by litigation and, equally with Singapore, by arbitration, according to the Queen Mary University of London International Arbitration Survey.

In Europe, one major change is the facilitation of collective or class actions. Under the Representative Actions Directive, all EU member states are now required to have at least one procedural mechanism in place for consumers to seek collective redress. Recent data shows a continuous and dramatic rise in class actions being filed in Europe in recent years, with 133 class actions filed in 2023. This is a record-high number, and represents a 93% increase in class actions from 2019.

The UK has experienced a similar relentless growth in class actions. According to one recent survey, up to the end of 2023, competition class actions involving over 500 million class members were filed in the UK, with claimed quantum now exceeding GBP120 billion.

In Europe, a number of EU member states continue to seek to attract litigation cases that traditionally go to the English courts. France and the Netherlands have created their own specialist commercial courts where judges have experience in private international law to cater to international disputes. Germany has established English-speaking commercial courts, and Switzerland is taking similar steps. Starting from 1 January 2025, cantons in Switzerland will be permitted to establish international commercial courts where proceedings can be conducted in English.

Despite these new arrivals, the impact on the English courts that some considered would result from Brexit has not materialised: UK exports of legal services continue to grow exponentially, second in size only to the United States.

Middle East and Asia

The establishment of international-facing courts in Europe follows an earlier trend in the Middle East and Asia.

In the UAE in particular, the Courts of the financial free zones of the Dubai International Financial Centre and Abu Dhabi Global Market and the Qatar International Court are starting to rival London as the commercial court of choice for many international litigants. Elsewhere in Asia, the Singapore International Commercial Court, the Astana International Financial Centre Court and the China International Commercial Court all specialise in the resolution of cross-border commercial disputes and, for the most part, use English as the language of proceedings. Cases in these courts are often decided by senior judges and lawyers drawn from multiple jurisdictions (except in the China International Commercial Court, where the judges are exclusively Chinese).

The establishment of international courts in the Middle East and Asia certainly reflects the eastward shift in economic growth and opportunity. However, all these courts are ultimately modelled on the Commercial Court of England and Wales.

The USA

In the USA, many of the unilateralist and protectionist trade policies of the Trump administration largely remained in place under the Biden administration. In his presidential campaign, Trump advocated for further protectionist measures, including a 20% blanket tariff on imports. It remains to be seen whether this policy will be implemented but it is safe to say that US protectionism will continue in the forthcoming Trump administration.

More broadly, in recent years the USA has become increasingly hostile towards international trade treaties that commit the USA to resolving disputes by arbitration or other means of international dispute resolution. The USA has withdrawn from the Trans-Pacific Partnership (TPP) and has ruled out joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It has also renegotiated trade agreements with Mexico and Canada (NAFTA) and South Korea (KORUS).

State courts in jurisdictions such as New York and California nevertheless remain attractive choices when international litigants enter into jurisdiction agreements. Where no jurisdiction agreement exists, the US Supreme Court has scaled back US courts’ power to assume jurisdiction over foreign companies in disputes that have arisen outside the USA (Goodyear Dunlop Tires Operations SA v Brown, Daimler AG v Bauman, BNSF Railway Co v Tyrrell and Bristol-Myers Squibb v Superior Court of California). This change is welcomed by foreign litigants who are anxious about the US courts exercising jurisdiction over disputes that have no connection to the USA.

In 2024, the US Supreme Court has continued its long tradition of supporting international arbitration. In Smith v Spizziri, the Supreme Court resolved a circuit split over whether Federal Arbitration Act, 9 U.S.C. § 3 requires a court to stay proceedings after compelling arbitration. The Supreme Court held that court proceedings are automatically stayed, thereby protecting the benefits of arbitration as a more efficient and cheaper form of dispute resolution.

In Yegiazaryan v Smagin, the Supreme Court ruled that RICO (the US racketeering law) is available as a mechanism to enforce foreign arbitral awards in the US. This adds a potentially powerful tool for the enforcement of arbitral awards in the United States: it gives judgment creditors another avenue to enforce against third parties involved in racketeering, and leaves open the possibility of obtaining treble damages and recovering legal costs.

International arbitration

Despite attempts by newly formed courts to attract international business, arbitration remains the preferred form of dispute resolution for businesses operating across borders. In the recent Queen Mary University of London International Arbitration Survey, 90% of respondents chose international arbitration – on its own or with other forms of ADR – as their preferred means of dispute resolution in international contracts.

The cornerstone of international arbitration’s success is the New York Convention, ratified by 172 states, which celebrated its 66th anniversary in 2024. The Convention protects the enforcement of arbitration agreements and awards, ensuring – with rare exceptions – that arbitral awards can be enforced against award debtors. In its global reach and in its success, the New York Convention remains unparalleled in other forms of international dispute resolution.

Use of technology in dispute resolution

It is now clear that the COVID-19 pandemic will have a lasting and profound effect on the manner in which global litigation is conducted. The primary trend that emerged is the development and accelerated use of online platforms for the commencement and conduct of litigation. In the post-pandemic world, online or remote hearings have become increasingly common, and many jurisdictions have adopted detailed protocols for the conduct of online hearings that focus on ensuring procedural fairness, efficiency, confidentiality and security.

Looking ahead to new challenges

Two key new global challenges that pose significant litigation risk are the regulation of crypto-assets and environmental regulation. These are politically polarising issues, as the US presidential election highlighted. Along with a rapidly evolving regulatory landscape, an increasing number of disputes relating to crypto-assets and blockchain technologies are giving rise to complex legal challenges posed by the novel nature of the assets themselves. Climate change-related litigation also poses novel legal issues, including concerning questions of justiciability and the role of human rights law and remedies in climate change litigation. A continued, exponential rise in litigation in both these areas is expected.

Cybersecurity and data disputes also continue to increase, as cyber-attacks pose an increasing threat to businesses across the globe that hold sensitive commercial information. The shift to digital working and rapid advances in the use of artificial intelligence have increased this threat. According to a recent report published by QBE, the number of cyber-attacks taking place each year has more than doubled since 2020. This has generated a wave of cybersecurity-related litigation, which is expected to continue into 2025.