Litigation: A Southern Overview

Commercial litigation in the South East of England is undergoing a period of transition. Longstanding patterns of High Court activity have shifted, new sources of dispute are emerging, and technological and market pressures are reshaping which teams are instructed to pursue cases, how those cases are run, and the steps being taken within the DR lifespan of those disputes.

This overview sets out the changing legal landscape, and the practical implications for litigators, in-house counsel and businesses across the region.

Declining High Court Commercial Claim Volumes

After a rise in High Court company and commercial claims between 2022 and 2023 – largely attributable to COVID‑19 business‑interruption insurance disputes – 2024 saw fewer claims issued. MOJ data confirms Commercial Court claim volumes dropped sharply and overall were down circa 41% from 2023 levels. Pandemic-era insurance claims appear to have largely worked through the system, leaving the High Court noticeably quieter.

On face value this might signal a quieter DR landscape. However, while it is difficult to assess with precision, there are indications that this does not tell the whole story, particularly given the growing emphasis on, and increasing use of, ADR, as well as claims being handled outside the Commercial Court stream.

Technology, Automation and the Rise in Niche Challengers

Beyond the volume of work lies the question of who is now competing for it, with one of the most significant structural shifts being the decentralisation of litigation capability. Larger cases are no longer the exclusive domain of City firms; increasingly, in-house counsel and business litigants are looking more widely across the legal market to identify teams best equipped to manage their litigation and DR needs.

The rise of AI tools, automation, and sophisticated case-management software is lowering barriers to entry. This is enabling experienced litigators in niche and challenger firms to handle significant disputes effectively. As a result, the savviest clients are more actively managing litigation costs and reassessing the cost, need, and benefit of instructing larger firms. Small, highly specialised litigation teams – often niche boutique firms – are now able to pool expertise, leverage advanced document and data-harvesting technologies, conduct sophisticated review and analytics, and deliver compelling strategic and procedural execution across all stages of litigation, from pre-issuance through pleadings, disclosure, and trial. Crucially, they achieve this without the legacy costs and substantial overheads of the traditional firms that historically dominated complex litigation. In many ways, the scale of specialist departments within large firms, once a necessity for handling significant disputes, can now be a market disadvantage. Their considerable fixed overheads stand in stark contrast to the leaner models of modern challengers. These disruptors utilise high-quality software and outsourced services on a flexible, case-by-case basis, allowing them to remain agile and cost-efficient.

Consequently, specialist challengers can take on larger, historically better‑resourced teams, positioning themselves in the gap between City and high‑street litigation service providers. The growth in high‑quality, modular outsourced services – such as e-disclosure platforms, predictive coding, virtual witness technology, and integrated case and document management systems – is enabling lean teams to litigate in the High Court effectively and efficiently.

At the same time, this technological shift is creating opportunities beyond high-value cases. Automation and improved processes are enabling disruptors to challenge the traditional high-street model for SME disputes. By aggregating, processing, and funding work more efficiently, new commercial avenues are opening up for mid-market firms that have invested strategically in their systems, processes, and people.

Changing Litigation Drivers: AI, Data, ESG, Fraud and Restructuring

While insurance claims may have receded, other dispute categories have strengthened and are rising in prominence, signalling potential opportunities in the coming months and years, as outlined below.

• AI and Data‑Related Litigation: A proliferation of AI systems and increased cybersecurity incidents are generating contractual disputes, IP and confidentiality claims, and potential negligence or product‑liability issues linked to algorithmic decision‑making. Regulatory uncertainty around AI intensifies the prospect of litigation from both misuse and compliance failures.
• Data Breaches and Cybersecurity Claims: As cyber-attacks grow in scale and complexity, so do disputes over breach notification, contractual indemnities and loss allocation – issues particularly salient for tech, finance and professional services hubs in the South East.
• ESG and Sustainability Claims: The roll-out of UK Sustainability Reporting Standards (UK SRS) is expected to increase scrutiny of corporate disclosures, prompting shareholder and consumer litigation linked, for example, to alleged greenwashing or inadequate reporting.
• Financial Crime and Fraud: The Economic Crime and Corporate Transparency Act’s new corporate offence for failure to prevent fraud (coming into force in 2025) and ongoing debates about reimbursement for fraud victims are shifting the litigation landscape toward increased corporate liability and regulatory enforcement.
• Restructuring and Shareholder Disputes: Economic pressures and corporate transactions continue to feed restructuring litigation.

Other Developments

The way disputes are funded and resolved is also undergoing significant change. Litigation funding generally, and alternative funding especially, remain in flux. Post‑PACCAR concerns remain, influencing funding strategies, and especially third-party funding, with caution surrounding the use of alternative funding (especially DBAs) likely to continue unabated. The growth in collective actions across competition, financial services and consumer claims – often at high volume – has attracted renewed focus from the Solicitors Regulation Authority (SRA), which may yet prompt further policy and regulatory change. Funders and claimants are exploring different forums and cost models. It remains to be seen whether there will be further regulatory or legislative interventions impacting alternative funding. While the principle of broadening access to justice through alternative funding continues to enjoy support, there appears to be increasing public policy resistance to certain funding models, particularly where perceived risks to the public arise.

A decline in High Court filings has been matched by a rise in ADR, reflecting both the practical impact of cost pressures, and the effectiveness of these processes. The trend towards mandatory ADR is likely to continue.

Regional Implications in the South East

As the saying goes, when America sneezes, the world catches a cold. The same might be said of London’s impact on the South East legal market. With its mix of high-value corporate clients, close connections to London’s technology clusters, and a dense population of SMEs, the South East is arguably particularly sensitive to shifts in the capital. Yet there remains considerable opportunity: the total revenue generated by UK-based legal services rose by 7.7% to GBP47.1 billion in 2024. 

A key trend is the continuing polarisation of legal services. While large corporates still require complex commercial litigation expertise, an increasing number of mid‑market and SME disputes are being captured by specialised boutiques and alternative service providers. Law firms in the region therefore face the challenge of balancing investment in high-end capability with the need to compete against agile, technology-driven teams that can deliver niche work at lower cost, with greater speed and comparable quality.

Taken as a whole, the evolution of the litigation landscape in the South East is less about a decline in disputes and more about navigating a period of profound transformation. This change is driven by the redistribution of work, the surge in niche challengers empowered by technology and AI, and the rise in new claim types linked to technology, ESG, and financial crime. As elsewhere, the region’s legal ecosystem must continue to adapt. Success will belong to those who can successfully marry specialist knowledge with technological capability while navigating ongoing procedural, cultural, and technical change.