LONDON — After the fall of the Soviet Union, London became a safe haven for Russia’s super-rich to live — and to litigate.

As businessmen, oligarchs and their families made use of the country’s legal and financial sectors, politicians were happy to see the flood of cash as a vote of confidence in the U.K. capital. “If one oligarch feels defamed by another oligarch, it is London’s lawyers who apply the necessary balm to the ego,” then London Mayor Boris Johnson told business chiefs in 2012.

A decade later, Johnson’s government imposed the heaviest financial sanctions in living memory on the Russian state, as well as the firms, businessmen and oligarchs deemed to be bankrolling Vladimir Putin’s invasion of Ukraine.

In the three years since, the British state has successfully defended every sanction in court — but there’s money to be made in trying to challenge them. U.K. lawyers can now rack up fees of up to £4 million per client representing sanctioned Russians.

And, despite many law firms being scared off by the reputational risks of defending undesirable clients, recent data suggests Russians are returning to seek justice in Britain’s courts after a post-Ukraine invasion chill.

For some in the profession, Russians deserve legal representation like anyone else. But for others, Russia’s continued assault on Ukraine poses the acute moral question of whether Britain’s courts should really be hosting those deemed persona non grata by the West.

Pulling the plug on Russian money

In February 2022 Britain unleashed wave after wave of sanctions against Putin’s Russia and those, including British citizens, who were viewed as helping facilitate the war. At the time this seemed to herald the end of London’s decades-long reputation as the playground of Russian businessmen wishing to do legal battle.

“Russians were a major source of litigation for 20 odd years,” said one corporate intelligence figure who has worked on cases involving Russian litigants. Multi-million pound oligarch battles offered “vast amounts of money which paid for a lot of houses in Chelsea for barristers.” They, like others in this article, were granted anonymity to speak freely about sensitive aspects of their industry.

Helen Taylor, deputy director of campaign group Spotlight on Corruption said the British government had played its part in encouraging this state of affairs.

The government had, she said, overseen a “concerted effort to attract Russian litigants to English courts,” with ministers in 2013 telling Russian business leaders that the “U.K. legal sector can help Russia pursue its goals … The U.K. is open for business, and wants to help Russian firms with everything it has to offer.”

“Sanctions obviously pulled the plug quite violently on that business model,” Taylor said.

The post-Ukraine invasion sanctions saw vast restrictions imposed on British, Russian, and overseas citizens, including frozen assets, travel bans and disqualifications from company directorships. Any law firm seen to be defending a client supportive of Putin’s war risked huge reputational damage.

Johnson’s administration issued veiled threats to the legal profession, with Downing Street warning firms to “think very carefully” before defending an oligarch.

The government made it unattractive for lawyers and their clients to seek to overturn sanctions, with the Treasury only granting licenses for firms on a case-by-case basis before October 2022, after which firms could be paid £500,000 each for cases dating back to before their clients were sanctioned, and the same for after their listing.

Any damages for a wrongly imposed sanction were capped at £10,000 in order to, ministers said, “send a strong signal that Putin’s oligarchs and kleptocrats cannot draw on the public purse in this country to boost their coffers.”

The fallout in the legal sector was profound.

Firms with a sizable Russian client base dropped not only clients who were sanctioned, but pulled out of any Russia-related work and closed their Moscow offices.

Yet the same corporate intelligence figure said although the “glory days” of Russian litigation began to end “some time ago,” the sanctions regime had not been as damaging to business as might be expected.

The legal industry has, they said, persisted through these choppy waters. Fundamentally, they added, “people just like suing each other.”

An industry remains for those with the stomach for it

Though government hardball and reputational worries scared off many larger U.K. and U.S. law firms, the sector was able to adapt.

Michael O’Kane from law firm Peters and Peters said Russia work has “dwindled a bit, but possibly not as much as one might think.” The sanctions issue, he said, “gives rise to its own litigation.”

Lawyers have, in some cases, simply been forced to become sanctions and geopolitical experts when advising companies on making sure they are not breaking the law. This can include helping a business to get out of a major international contract with a sanctioned individual.

For those with the stomach for it, however, there is still a market for defending sanctioned individuals from litigation, helping them launch their own cases, and attempting to get them removed from the government’s sanctions list.

Taylor, of Spotlight on Corruption, said that while major firms “very publicly stepped back, there has been displacement to smaller boutique firms that pride themselves on discretion” who have kept working for sanctioned individuals.

One partner at a top law firm added that much of the sanctions work for Russians post-invasion had been taken up by criminal law firms, as they are “used to acting for people who were very unpopular and they were generally able to take on that work without reputational fallout in a way that many other firms weren’t.”

Last month, Britain retained its 100 percent record on defending its Russia sanctions in court, after the Supreme Court ruled against overturning the sanctions imposed on Eugene Shvidler, a business associate of oligarch Roman Abramovich.

Despite the apparent futility of challenging these decisions, the same legal partner said many clients feel it is worth trying to extricate themselves from “damning” measures which clog up their ability to do business and “cause enormous financial, practical and reputational harm.”

For many multi-millionaires or billionaires, the cost of attempting to get themselves taken off Britain’s sanctions list is somewhat negligible when compared to their impounded net worth.

The British government confirmed that despite success in the courts, the government has delisted a dozen sanctioned individuals since the start of the war. The move follows representations from lawyers appealing to Foreign Secretary David Lammy’s department.

These include Russian businessman Alexei Fisun, represented by English firm Peters and Peters, in one of three successful delistings. Firm Corker Binning successfully delisted two clients, including Russian-born billionaire Oleg Tinkov.

O’Kane from Peters and Peters told POLITICO: “When people ask why lawyers are acting for these Russians, well, the truth is, that the FCDO [Foreign Office] have actually taken some off the sanctions list as a consequence of representation from lawyers.”

Some in the profession see a byzantine sanctions regime that needs unpacking if justice is to be done. The partner at a top law firm said sanctioned clients are given no advice [from the government] on what they need to do to get delisted, whether that be divesting from Russia, disavowing Putin’s regime, or moving their wealth to the U.K.

“They’re stuck in this Kafkaesque position where, in particular when they are U.K. citizens or residents (which many of those designated under the U.K.’s Russia sanctions are), they’re essentially prisoners of the state without any meaningful guidance on how to extricate themselves” they added.

The same person said they had requested meetings with the Foreign Office so that officials could explain how a client can show they are not a supporter of Russia’s war. “They will not engage,” the legal partner said. The government disputed suggestions that the Foreign Office ignores submissions on sanctions.

Access to justice

Choosing whether or not to represent sanctioned Russians has become a moral maze for many of those working in the legal industry — and last month’s Supreme Court verdict against Shvidler threw that into sharp relief.

The judgment was not unanimous.

In a 20-page dissenting opinion, Supreme Court Justice George Leggatt branded the sanctions “Orwellian.” The same partner at a top law firm said Leggatt’s comments made “you quite proud to be British … and also a little bit disappointed that he was the only one of the five that felt that way.”

“Underlying all of this are serious questions about the rule of law, which is a fundamental principle any serious lawyer signs up to. It’s the idea of individual rights, it’s the idea of access to justice, it’s the idea that irrespective of political and prevailing winds, people should have their case heard, no matter how bad the public might think they are.

“Everyone agrees that a murderer or a rapist should have legal representation in court,” the same person added. “To remove legal representation from someone on any basis, let alone due to their nationality, is pretty abhorrent to most lawyers.”

O’Kane at law firm Peters & Peters lamented “a very unattractive development that’s taken place in our system over the last 20 or 30 years” in which the views of a client and lawyer are blurred in the eyes of the public. “If a lawyer acts for somebody who is challenging their sanctions, that doesn’t mean that they agree with Russia’s actions in Ukraine,” he retorted. “This is just palpable nonsense.”

Yet for others, moral questions remain over work which could help legitimize the wealth acquired by Russian oligarchs. Taylor, of Spotlight on Corruption, queried the ethical choice of “allowing someone who has made their wealth in, or benefited from a kleptocratic regime where there is no rule of law, to then use London and the U.K.’s strong rule of law protections to protect that wealth.”

Law firms, she added, “are not just ordinary businesses — they are members of a public profession who enjoy certain benefits that attach to their status, including secrecy with their client through a relationship of privilege, and those benefits are entrusted to them on the basis that they act ethically and in keeping with the public interest.”

Return of the litigants

For now, business is once again booming.

Recent data from London’s commercial courts — which often cover big ticket contract disputes — suggest Russians are again flocking to British courts to do battle, and increasingly able to find law firms happy to represent them. 

Analysis by public affairs agency Portland found that despite a dramatic drop-off of Russian litigants in commercial courts in 2024, this year has seen a “dramatic rebound” of 60 Russian litigants, the highest figure since records began. That number could be higher if including Russian-owned businesses which have moved their headquarters outside of Russia.

These Russian litigants — some of whom are sanctioned — have also found it easier to access representation in the U.K., the report found. Some 80 percent had legal representation, up from only 30 percent the year before, after a steep rise in the cap on legal fees imposed by the British government.

The U.K. government confirmed that the amount lawyers are able to be paid by sanctioned individuals under sanctions licenses had increased fourfold since the beginning of the war — with clients able to pay up to £4 million to each law firm if the case covers the period of both before and after they were sanctioned under their general license.

Taylor said these increased thresholds, which better reflect the top fees charged by elite firms, had come in response to demands from the profession that “if we’re going to take on these cases, we need to get paid as we would normally get paid.”

The legal partner quoted previously said these increased fees were one of the main reasons cases had started to kick off in the commercial courts again.

For some, the rebounding activity in the courts is a sign that business views Russia’s return to the international fold as inevitable.

“What we’ve started to see now is the subtle shift back to business as usual, where there are still some firms steering clear of Russian clients, but increasingly there is a sense that where the sanctions might be lifted soon, particularly if the U.S. decides to lift sanctions, there may be some sort of business coming back in,” said Taylor, who added that she had spoken to “a number of people in the legal sector who have been advising companies on a reopening of business with Russia.”

The British government’s growth agenda is faltering and, reflects Taylor, the legal sector is “hugely important” to the wider economy. “This is the bind that the government finds itself in where, on one hand, it’s wanted to take strong action to cut off Russian interests from access to top U.K. lawyers, but on the other hand, the reality is this is bad for business, even if some of that business we might not be all that comfortable with.” she said.

For now, ministers maintain that they’ve got the balance right. A U.K. government spokesperson said: “We have put in place an unprecedented package of sanctions designed to inflict an economic cost on Putin’s regime, to undermine the Russian war effort and show solidarity and support for Ukraine.

“These include tough regulations on how lawyers provide advice relating to sanctioned activity — with failure to comply meaning potential criminal prosecutions and large financial penalties.”

Others are ready for what comes next.

The partner at a top law firm said that this return to business would ultimately be helpful for the sluggish U.K. economy, despite the moral implications of dealing with Russia.

“Across the City, a lot of businesses want to make sure that they haven’t thrown the baby out with the bath water and that when the tide turns they’re well positioned to capitalize on it,” they said.