The business of international arbitration with Boies Schiller’s Tim Foden

Welcome back, my guest today is Tim Foden, co-head of the International Arbitration Group at Boy Schiller in London. Tim has had a front row seat to some of the biggest cross-border disputes in the market, having spent time at A&O, Quinoa Manual, and now at one of the world's best-known specialist disputes firms. We talk about what separates dispute boutiques from full service firms, why London continues to dominate as a global disputes hub, and the realities of international arbitration, from investment treaty claims and litigation funding through two disputes involving mines, governments, and occasionally some pretty hairy situations on the ground. I hope you enjoyed the conversation which should offer a look inside a part of the legal market that most transactional lawyers rarely get to see. Thank you to Lagora for sponsoring the numberable podcast. Lagora is the agentic operating system for legal work, supporting lawyers in research, review, and drafting across complex matters. With the launch of Lagora AOS, its agent now drives legal execution end to end, handling the work from start to finish while lawyers retain oversight and make the decisions that matter. Trusted by more than 1200 leading law firms and in-house teams across more than 50 markets, Lagora is setting the standard for how great legal work gets done. You can find out more at lagora.com. So look, first question for you, Tim. Okay, so you are obviously co-head of the international arbitration group at a very well-known specialist disputes firm. I wanted to ask, and what got you into disputes work in the first place? Take me back. Perhaps I'd start by saying I was born. Look, I'm a disputatious character by nature. I was always pretty argumentative as a child in that respect. And then when I watched courtroom dramas, I said, that's what I want to do. I always wanted to be engaged in debate and be set out to try and establish things in that kind of environment that has a performance element to it. And that was something I saw very young, and I thought, well, I want to be a courtroom lawyer. I want to be a trial lawyer. As I got older, and my interests sort of veered more towards the international, that's where arbitration came into it. Because I grew up in a pretty parochial environment, you know, knowing in my family had really ever been a broad before, for instance, I didn't get on the interplane until I was 10, and then not again until I was 18, and the possibility of sort of merging at, you know, disputes life and a career as a trial lawyer with a more cosmopolitan setting like international arbitration was incredibly attractive once I identified that proposition. And you've been in London for a little while now, haven't you? I think you had some stinted. Am I correct? You were, you know, Alan and over as it was. What did I not give away that I'm not a native born? I didn't get up from that. You didn't pick that up. No, yeah, I've been in, I've been in London for 15 years. I did come to work for Alan and Overy, and spent two years there before the folks that had recruited me to come to ANO moved over to Quinn Emmanuel. So it was a relatively short-lived period at ANO, but arguably the most formative two years of my legal life. And what's the big difference between ANO and Quinn Emmanuel? You know, Quinn Emmanuel obviously has a reputation as a very sort of fierce and hard-nosed kind of disputes powerhouse. What was your take? Oh, look, I mean, they, they were couldn't be more night and day. I was somewhat accustomed to the environment at ANO. I'm sorry at Quinn because I'd worked in the American law firm before. But, you know, Quinn is, is a firm where at least at that time, there was very little money spent on things like IT or a nice office. They put that money to use in recruitment and in paying you. And your job was to do a good job and fight the fight, whereas in ANO, I mean, I had a dentist, a gym, laundry, like dry cleaning facilities, every meal I could eat in the office, all of the sort of trappings of a big magic circle law firm were there. And then you go to this place that was sort of like a pirate ship, you know? And I loved that transition. I think I was in some respects more prepared for it than a lot of other people that migrated from like magic circle environments over to Quinn. But they were night and day. What do you think is the kind of, you know, you've seen both versions then. What do you think the kind of secret sources to someone like a Quinn? Because famously, you know, we had John Quinn on the podcast a few months ago. And yeah, you know, he sees it in a very sort of simplistic turn of the business model of a law firm, right? It's people, people and clients, you know, big layers of sort of management, et cetera, is is is not what he, you know, thinks is appropriate for for a law firm. What was your take? Look, I'm no John Quinn. And I would say that in the wider spectrum of philosophies on the business of law, I'm much more aligned with the John Quinn. I remember some of the things that he said to me or around me about the business of law are deeply encoded in my mind. That said, I think there's a happy medium to strike between a law firm that has a vast amount of infrastructure and very systematic ways of doing something like a magic circle firm where sometimes form is put over substance and something like Quinn where it was like, oh, go out and buy your own laptop and we'll reimburse you. And, you know, I think at my current law firm, which I adore, Boy Schiller Flexner, we do strike that balance a bit more. I went into BFF thinking it'd be very similar to Quinn because the backgrounds of the two firm of Quinn and BFF are very similar. But what I found with BFF is something that is a bit more structured and I think that really does embody that happy medium. I don't think one has to be so dogmatic about, you know, the business of law. I think that you can strike some happy medium between these monolithic organizations that handle everything for everyone and something that is, you know, a very particular business model of Quinn. It's not one size fits all, right? There's a few different flavors of how you can be successful, I guess. No, but at that said, I think at root, Johns, and my boss, David Boy's philosophy that disputes are best handled by a disputes law firm. I believe that to the core of my being. And I've seen so many clients that have been converted to that view after having been serviced by full service firms for ages because a disputes lawyer is at root a special beast. They are more akin to me, someone who grew up watching a sort of courtroom drama TV shows and said, that's what I want to do. Whereas someone who does transactional law, I mean, I can't imagine how did you decide that you wanted to become a transactional lawyer? It's not like it's represented on TV. So when I was at Quinn and even more so at BFF, I was amongst my tribe, right? And people that thought just like me in terms of how do we deliver services for clients? How do we get their best outcomes? And I, in the same breath, I don't have to cross sell our project finance practice or vice versa. The big drawer is often obviously not necessarily complete absence, but a lot fewer conflict issues, right? So you can go to a dispute specialist versus a big transactional full service firm. Is that a big advantage, as you said? No, I mean, it's, it is a highly overstated advantage, okay? Yeah, you get conflicts at those firms, but if you become a big enough disputes firm, you've got conflicts too. Okay, the idea that because you only do disputes, you all run into conflicts, I think is fatuous. I remember seeing a pen of relatively well-known boutique in London that said disputes, no conflicts. And I thought nonsense, but we have conflicts at BFF. We're able to manage them pretty efficiently, but I've had significant conflicts because as a firm grows, you will find that clients sue each other, surprise, surprise. So the conflicts come between clients, not necessarily, you know, transactional departments. I think the difference is that one, we can be more competitive of rates as a dispute's only practice because we're not, you know, we don't have to sync up our rates with whatever the private equity guys are doing, right? And they can charge absolute fortunes. Our rates are pretty competitive in that regard, and Quintamannual and other people's rates are still really high, but they're not at that sort of project private equity level. I think, but the main point is that you get folks that are concentrated only on the divorce, not the marriage. And that is a particular mindset. And delivering those sorts of outcomes is, it does require a certain way of thinking. And, you know, I think gone or the day's requirements are keen to just say, oh, well, they wrote the contract for us. So they can handle the dispute. Well, the department that handles the dispute had no bearing on the contract itself. And sometimes, funnily enough, they're sitting there thinking, why did our people draft this? So I think really the distinction is one of mentality. So why did you join boys, Shilla? I think it was a 2021 or 2022. It was very early days, 2022. Yeah, talk to me about that. Yeah, well, look, I have a certain vintage. Over David Boyz, who is our firm's founder along with Jonathan Shiller, was a hero. Look. Listeners who are not familiar, because David Boyz, it's still more associated with the US, isn't he? Of course. He is a sort of, you know, a god, a litigation, sort of god, isn't he, in the US? Yeah, well, I mean, as we pointed out, Oliver, I am an American. And I was coming up as a young lawyer at a time where he really was America's most famous trial lawyer. I got my start in the law actually working as an in office messenger at Sullivan and Cromwell at a time where David was representing the US Department of Justice, suing Bill Gates and Microsoft for antitrust violations. And my law firm, Sullivan and Cromwell, represented Microsoft. So David was this larger than life character. And I had always been aware of Boyz, Shiller, in that respect. When the opportunity arose in 2022 to sort of help rebuild the office, I don't think it's unfair to say that it needed to be done. I jumped at that chance who doesn't want to work for David Boyz. But more to the point, like I had become at that stage quite familiar with Jonathan Shiller, who was one of the co-founders of the firm and was a specialist in arbitration. And I saw that there was a project here that I was incredibly excited by. And that's because I love the platform. If you can say to clients that you're disputes only, and you're founded by this legend of the courtroom in the United States, clients really like that. And I find that to be the case in Australia, in England and Latin America, they like that that ethos finds its way throughout the entire firm. And so I saw that as an opportunity. I'd previously been the managing partner of a Swiss law firm's office in London. And sort of working to build that office with the assistance of firm management, of course, from zero people and getting SRA approval to an office of, say, 27 people, that was something I really enjoyed. That went beyond just being a day-to-day lawyer that was putting something together. And I saw a similar project with the revamp of BSF in London, but one with a platform that was a little bit more closer to my heart in BSF, in the nature of an American law firm. And one that I thought was a little bit more interesting because BSF, as a disputes firm, doesn't just handle what I do primarily, which is international arbitration and what my last firm did, but the entire panoply of disputes. And a lot of my clients come to me and they've got problems that don't require you to go back to the contract and say, is it an arbitration clause? Oh, well, we can help you. Is it not an arbitration clause? Sorry, no, we can't do it. So we're here as sort of problem solvers. And BSF as a disputes firm provides a wider platform in that regard than my last shop. So I mean, it was a little bit of a no-brainer, if I'm honest with you. I saw it as a huge, huge opportunity. So I mean, you touched on it there. This was, you joined just after a bit of upheaval at the firm, obviously, because you had, Natasha Harrison left to found her own shop, Palace, which has been very successful since. So how has it been viewed internally? Has it been a bit of a kind of relaunch for boys' Schiller in London after that? I wouldn't say relaunch. I would say that we had two folks who were partners in the office at the time and Natasha left. We had Pratik Swaka and David Hunt. And they had the firm's DNA in them and provided this incredible sort of continuity. And when I joined, I viewed as an opportunity to really primarily augment the firm's international arbitration practice. And the firm gave me whatever tools I asked for to do that. Our firm has a great legacy in international arbitration, but it wasn't something in London that was the primary focus, whereas that is, for the most part, what I do. And so I sort of went about trying to establish my practice and with that, the office in London grew. But no, I don't think we see it as a restart because when I joined, some of our best matters were clients that had been there for close to 10 years at that point. So I would hardly think that they would think that we had sort of refreshed or restarted. But what does head count look like at the moment then, Tim? In London? I think that we are at about 28 people and about 14 lawyers, I think. It's when things are growing this quickly and when you're on a plane as often as I am, it's hard to lose, it's easy to lose track. No, for sure. Look, talk to me then about your practice because international arbitration, I'm not a disputes expert by background. I was on the transactional side. It's always been a bit kind of like dark arts to me. I have to say. But give me a flavor of international arbitration, the kind of business of international arbitration. What does it look like? How do these claims run in practice? How do you find clients, and as you said, I imagine you're always forever on a plane, aren't you? Pretty frequently, yeah. Look, international arbitration is effectively two things. Primarily, it's international commercial arbitration. Two companies do business together and decide that if there's a dispute that emerges between them, it should be heard in a neutral forum. That's an arbitration institution. London, Paris, sometimes New York. Geneva used to be a pretty big spot for it. And that's what we do a fair amount of that. What has been my primary profession since I was 29 years old are what we call investment treaty arbitrations. And that is where one of my clients, and I always represent the investor, has invested in a foreign jurisdiction and found that their investment has been interfered with. In some manner, that breaches either a contract that that foreign investor has with the state or a treaty that's in place between the foreign investors, home country and the host country. And I do a fair amount of that. That's pretty much most of what I do. And how do we find clients? Well, 12, 13 years ago, I started doing mining cases. And before you know it, you develop this sort of understanding of how minds work, how hydrogeology works, hydro, all sorts of geotechnics works. And you understand a sense of the market and how minds are valued. And you think, well, I'm not just gonna all of a sudden move to structured financial products. I'm gonna continue to litigate matters in this space. And then you go out and you go to the mining companies. And then they start to come to you because you've had some success in arbitrating on their behalf. And that's where we're very fortunate to find ourselves now is that most of the clients sort of are aware of our reputation and approach us when they find themselves in a sticky situation. Just a quick message from Define Lee who are supporting the podcast today. Define Lee is the fastest mover in the legal drafting tools market with data from skills and legal tech hub showing the strongest year on your gain in user engagement. Design for control and built for lawyers working on complex contracts in word. Its specialist tools help you maintain context and flow and surface the ripple effects of changes. Reducing review time, standardizing quality and mitigating risk. Book a demo and discover why Define Lee is trusted by over 150 leading law firms and in-house teams at define Lee.com/non-billable. So one of your areas, I know that you've written about this, you've often appeared in pieces about this, but it's kind of the term I think is resource nationalism. Isn't it so? The example you gave there, it might be somewhere like, you know, correct me if I wrong, but some, a foreign company has owns a mine or something in an African state and the state decides that it, you know, to take control of that asset or something and then the dispute arises from that. Is that a good example? That's pretty much my Monday through Friday. Right. Okay. And what do those claims look like, Dad? Look, they tend to come in two packages, by and large, right? We work with a lot of litigation funders, and there's one litigation funder who I'm very fond of. Well, he says, "Is this one of the cases with guns or with laws?" And so what are those two categories? Let's start with the laws. A country decides that perhaps they're not getting enough out of the bargains that they struck with foreign investors, and they change through law. Or they decide through regulatory hooker by crook that this company is not going to progress its asset, and they find a way to find that they've maybe run a foul of the law in some way, and they pretextually expropriate the project or take some measure that significantly harms the economic value of the project. The sexier gun side is where either government officials, the army, police, or third parties show up at the mine, and they take it by force. And the sort of starting point there is that international law tends to protect these foreign investments from such force, whether it's propagated by the state or committed by third parties, but the state itself has an obligation to protect that foreign investment from the acts of those third parties. And so that's where we tend to get calls from clients. So what's some of the craziest stuff that you've sort of been involved in there to, you know, you talk about guns and all that I've been like, does it get pretty hairy? Yeah, look, there's been some pretty wild stories. You know, site visits are a common feature of the cases that we do. So I found myself in sub-Saharan Africa and illegal mining sites. I've found myself in the middle of the Russian step in a terrible, terrible car accident where friends and colleagues thought that perhaps our truck had been sabotaged. I've had government officials make implicit threats to me and my safety because we dared speak truth to power. We've had some situations where I was pretty spooked about whether I was going to get put in bracelets, as they say, at the airport. Because a lot of what we do requires us to go interact directly with government officials. And you are always trying to advocate your client's position in those settings, but you also have to be cognizant of the fact that you are a guest in this country. And if someone loses face, it could mean you lose your liberty. So talk to me about the role of the litigation. Talk to me about the role of the litigation funders, then Tim, a most of your claims funded by the litigation funders. A fair number of them are because what happens so often with our clients is that they had one asset and that asset goes missing and they don't have money to pay their legal bills, but they have a very good claim and that is sort of their loan asset. And so one of the things that we, as a firm, got good at was marrying those claims with funders and bringing together finance and the claimant and it's been wildly successful. And what happened is we want a bunch of those claims. Funders are keen to work with us and clients realize that we can get their cases funded. Now, I don't love it. We tend to end up having to litigate the case two times because we've got to convince the funder to come on board and then we've got to bring the claim itself, much rather work any day for the major mining and oil and gas companies that can pay our bills directly. So you're working on a contingency fee basis with your client, is that right? And then the litigation funder, the arrangement is, you know, they get a cut of the settlement that you ultimately agree. Not necessarily. We are successful. We've got a big quiver of cases that enables us to sort of adjust our risk profile accordingly to the case. But for the most part, our fees and our budget are being paid up to a certain percentage usually with a discount by the funders in order for us to bring the claims. If we were to work fully on contingency on these matters, usually our US teams would be bringing the claims using a contingent or sort of DFA model. What we do here is find someone that's willing to work with us to cover the costs of the arbitration, the costs of our legal fees, the costs of the arbitrators. And within that mix, we take on some risk ourselves. Don't you think of the role of the litigation funders because sometimes they get a bad rap, don't they? And other times people say, hey, do you know what, without them, these claims couldn't be brought. So the access to justice is much more limited. What's your view? Look, I, first of all, I find it really interesting when that debate gets recycled in places like this country where that, you know, the idea of contingent litigation, for instance, the United States is decades and decades old, and it has a lead to the parade of horribles that the critics so often point to. I think that it is an access to justice issue, but that expression does unnerve me a little bit because we're not talking about contingent clients that are fighting civil rights battles. Okay, we're talking about companies that have had something wrong and they deserve their day in court as well, but not all cases, Mr. Brown versus the post office, right? So we need to, let's, let's be a little bit realistic about this. What I find really troubling about it is the way that a number of arbitrators in the investment treaty space have looked at it and use expressions like, oh, it's a gambler's Nirvana and everyone's just throwing money behind bad claims. I could not agree less with that sentiment and I find it so uncommercial. If you work with one of these funders, they do diligence these cases within an inch of their lives. It becomes the bane of my existence selling of these claims. So the idea that they're throwing money behind claims that otherwise wouldn't be brought is fatuous. How would they ever make a return if that were the case? And I can't sell a part of my language, shitty claim to a funder because no funder will ever want to work with me again if I stake my reputation on bad claims. So the idea that this is promoting vexatious litigation, I really challenge that because it's, you know, people are looking to make returns here and they're not going to invest in bad cases. Usually the cases we have done have not only be diligence by ourselves. They've been diligence by in-house lawyers at these litigation funders who they have gone out and hired silks and other prominent people in the field to kick the tires even further. And they've usually hired damages consultants and people who can trace the assets of the potential respondent. So the idea that, you know, these claims wouldn't be brought. It just doesn't stand to reason. Unfortunately, a lot of people aren't actually applying reason when they have these sort of knee jerk reactions to things. And look, anyone can sue anyone. You can't legislate against the idea of people being able to access the legal system. So I find it troubling that everyone says, "Oh, well, you know, without these funders, this country wouldn't get sued." Well, no, people have the right to sue just as the state has the right to defend itself and then get costs if that claim should fail. Big decision a couple years ago in the UK Supreme Court, the PACR decision, which held that, you know, lots of litigation funding agreements were unenforceable, right, fundamentally. What's been the effect of that decision on your practice on international arbitration and specifically on the London market? I think, obviously, a lot of people had to go rewrite their funding agreements. It's not something that we really had a lot of experience with, the Feminist with you. The PACR decision came out. We obviously analyzed it and, in some instances, even took advice about what was permissible. And it turns out that our funding agreements were, you know, without obviously saying anything I shouldn't. But they were, they were, they complied with what PACR had already set down and followed the guidance in that respect. And, you know, there are some arrangements that I think folks have come to that were a bit might have overstepped the, overshot the mark. Again, coming back to this idea that like, we've got to work with funders. We've got to work with clients. If we had been trying to take too much, that not only would have been problematic from our regulatory position, but for our reputation and doing business later. So for us, we have sensible budgets. We get cases funded sensibly for those budgets. And we've never sought to make a windfall from a case. We just want to get compensated largely for our time. With that view in mind, we were already effectively in compliance. So I haven't seen much of an impact, for my eyes. Because you read things, and you do hear it, as well about the capital being pointed at other jurisdictions and said, whether it's sort of Singapore or Paris, because of the decision. Is that-- Do you see that, or not so much? I haven't seen it that much, if I'm honest with you. I know that everyone thought that capital would migrate largely to the United States. But we've always worked with funders who were either cross-border themselves or based in other places. And ultimately, what they invest in are lawyers, not cases. Because you need to make sure that you're with a lawyer that has good judgment, and that has picked a good case. And then can prosecute that case to the best of their ability. And so let me just put it this way. I haven't struggled to get a case funded because of PACR. If the case wasn't meritorious, then maybe we'd struggle. But we try not to take on cases that are clearly unmeritorious, either. And what do you think Tim about London status as a global arbitration disputes hub? Is that under threat at all? Well, I still live here. And it's not just simply because of the weather. I don't see it as under threat, if I'm honest with you. I think there have been discussions about whether it's under threat in the entire 15 years that I've lived here. And they spike, and then they reduce. Obviously everyone thought, oh, well, with Brexit, they'd all go away. Well, how many years on are we from Brexit? And London's dispute environment still remains intact. Ultimately, people really like English law for their contracts. So they like to have disputes heard here. What's more is that there is a very vibrant London disputes environment that enables-- that brings in talent. That talent is not just English. It's people like myself and people from the civil world, excuse me, that decide that they want to practice here. And you meet many, many a client that says that they want London lawyers on their case. But then there are also just some incredibly practical reasons why London continues to, in my view, reign supreme is the dispute's market. One of those is Heathrow Airport, right? We are proximate to more places in the world in my experience than a lot of others. I-- the ability to move back to, say, Washington, D.C. has always been there since I'd moved here. But I was just speaking with a client today, if I wanted to do any of the work that I do in Africa, where you're tacking another eight to 10 hours when you include layovers to get from there to here. Whereas when my clients ask me to be somewhere on a moment's notice, it's pretty easy to do with Heathrow. OK, so look, what's coming next, then, in terms of the kind of litigation arbitration market in London, because we've had this big boom in class actions, which is still quite nascent, isn't it? And it still seems to be working itself out how that's all going to play out. Is there anything else that we should be thinking about? I'm hearing a lot of the moment more on this commercial side, but big restructuring disputes globally coming to London more frequently we can expect that coming. Anything that we should be thinking about? Well, I think that in the light of the BHP liability decision and the damages phase, you're going to see more mass claims brought in London. That was a favorable outcome for folks that might want to bring those sorts of claims and find a nexus with a London listed or somehow a London-based company. So I think you'll see more of that. I think London will continue to be an international arbitration hub. All positive, then, basically. Yeah, I think so. And what's next for boys, Shiller, then, in London? Are you hiring? Are you looking to really grow the team? Look, I think that it's a fool's errand when people talk about, oh, these are our plans for growth. We work in disputes. We, as lawyers, don't control when those disputes arise. We forge relationships with clients and when they have problems, they come to us. So to try to project what our growth metric will be, I don't get into that. We grow as the work grows. We wouldn't go out and hire a bunch of people before we got busy so they could sit around and twiddle their phones. Fortunately, for us, we are really busy. And we've got a lot of work. So we are growing and expanding. We've taken the decision just this week to really go right back out into the market to hire at the associate level. I'm sure when this comes out, it will lead to a further flood of CVs. And yeah, we want to continue to expand, particularly in litigation. Our law firm is a litigation powerhouse in the United States. And we're very busy in litigation in London, but I would say that we want to grow more just in sort of high court actions. Whereas right now, a lot of the growth for us has been in international arbitration. - Okay, well, look, best of luck with that, Tim. - Thanks.