Banking on misery
Atique Naqvi discovers that there are at least some winners in the last two years' financial turbulance: lawyers, thanks largely to property and employment cases.
October 3, 2010 3:40 by Samuel Potter
Who says you can’t make a killing in a recession?
Legal firms operating across the Gulf say they’re not worried about the global economic crisis because their businesses are booming. Commercial disputes and employee claims, both of which increase when the economy turns sour, are driving their billable hours.
When everybody is making money, everybody is happy, according to the senior associate of banking and finance at the UAE’s Bin Shabib and Associates Advocates and Legal Consultants, Imran Shafiq.
The lawyer, based at the Dubai International Financial Center, says that when times are good, people tend to ignore mistakes or take them with a pinch of salt and move on, but when the times are bad, people want to cling to every single penny.
Commercial disputes have increased not only in the region, but all over the world, says Shafiq. Most of the claims at DIFC Courts are employment-related. Shafiq says the problem has gotten worse as more people are being laid off. “There is a popular belief among employees in the UAE that filing and winning a claim against an employer is extremely difficult, but a lot of protection is given to employees at the DIFC Courts.”
The registrar of the DIFC Courts, Mark Beer, says the number of cases has increased, but it is hard to link the rise with what is happening in the global financial world. The registrar attributes the rise in the number of cases at the DIFC Courts to the wider acceptance of the judicial system and trust in the courts.
In 2007, four cases were filed at the DIFC’s Court of First Instance. There were nine cases in 2008 and 36 in 2009. By the first week of July 2010, 18 claims had been filed. In the Small Claims Tribunal of the DIFC Courts, 55 claims were filed in 2009, and by the first week of this August there were 66 cases.
Beer says the usage of small claims is exponential because the parties involved realize that it is easier to get a decision from the DIFC Courts rather than fighting among themselves.
The number of commercial claims has gone up at Dubai Courts as well. The law firm Al Tamimi and Co.’s head of litigation, Hassan Arab, says there has been a 47 percent increase in the number of cases filed last year in the Court of First Instance, Court of Appeal, and Court of Cassation.
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