Legal veteran Guy Beringer explains why law is an underrated asset class
Economists have recently recognized the existence and value of natural assets in a way that opens up new avenues of thinking.
Guy Beringer, former chairman of UK Export Finance and currently director of LegalUK, says the same process of acknowledgment and disclosure should apply to another asset class which has a daily impact on the quality of our lives, but which has no owner or economic value. to her: the law.
Beringer sits with AM City discuss the main pitfalls of recognizing English law and dispute resolution as an important platform for the wider economy and society.
What is the value of English law to business and society that makes it similar to natural assets?
As with natural assets such as biodiversity, the law has different characteristics in different places. English law happens to have the ability to travel freely and therefore has significant value for trade and business. Access to it can determine health, education, employment, housing and prosperity. Lack of this access can prevent all of these things. It therefore has considerable value for society.
What are the measures of the value of law to the UK economy?
There are three main measures of the value of law to the UK economy. None are well understood in public or professional life. None are recorded in a budget or balance sheet. They are the societal value of access to justice; the economic value of English law as a platform for global business and commerce in the UK and around the world; and the economic value of the rule of law.
Why is access to justice so important to the economy and what brings economic value to English law?
Access to justice and economic prosperity have a direct correlation. Wider access to equitable outcomes will increase economic activity and reduce the economic costs of disadvantage.
“English law provides economic value as a platform for global business and commerce in the UK and around the world.”
English law is the most widely used operating platform in UK business history. It is a gateway to all other platforms as well as how companies interact within themselves and with each other.
How do you define the economic value of the rule of law?
The economic value of the rule of law is more complex than the first two measures. It is a distillation of these within a framework akin to natural laws. It does not tell us which system of law and social conduct to adopt, but it does tell us which structures will remain standing in time and which will inevitably fall. In a world that seeks sustainability in all facets of existence, it is a unique tool. It has distinctive value to the UK economy as it has become part of the brand proposition of English law.
Where are we in our recognition of these measures of value?
he societal value of access to justice is largely ignored because it involves things that are considered too complex to consider. This situation is exacerbated by the fact that these external factors cross business, academic and governmental boundaries. We challenge current government and corporate thinking to recognize the value of English law as a major economic asset. This challenge has, to date, been largely ignored in these neighborhoods.
The value of the rule of law has been discussed from time to time, but is not widely recognized outside of academic circles.
Why are these measures not recognized or recognized more widely?
The problem is that people instinctively conclude that something they can’t see doesn’t exist. Access to justice sees its externalities distributed between ministries and never aggregated. Officially, these externalities do not exist. The business world has allowed legal experts to create a black box approach to law. The board of directors and the government behave as if the law were only a tool which requires a qualification to use it. This was how technology was perceived 25 years ago.
And what else?
Another problem is that economists tend to narrowly categorize law as institutional influence. It is a very one-dimensional approach to a complex asset and comes down to analyzing the value of sunlight simply as an alternative solar energy source. The law can be a facilitator of entrepreneurship, an obstacle to business, a medical treatment, a door to happiness or a source of misery. All of these potential outcomes have economic significance and are measurable.
What do you think should happen to change the status quo?
It is time for legonomy – where law meets finance – to go beyond the boundaries between the two disciplines of economics and law. It is also time for leaders in government, business and civil society to understand its economic importance and direct their policies accordingly.
“There is no entity independent of self-interest that is the guardian of the law as a national good.”
That alone should sound the alarm. The creation of an independent body, modeled on the Alan Turing Institute, a pioneer in artificial intelligence research, should be a priority to address areas of law that have failed to keep up with innovation and promote English law to global companies as the law of choice to govern transactions in new areas.