- Hague Convention on Recognition and Enforcement of
Foreign Judgments. The United Kingdom signed the Hague
Judgments Convention on 12 January 2024 and it was ratified on 27
June 2024. It will enter into force in the UK on 1 July 2025. The
convention provides for the mutual enforcement of judgments between
the UK and other contracting states, including EU member states, in
proceedings started after the convention comes into force for the
UK. Described by the Secretary General of the Hague Conference on
Private International Law as "a much needed and
long-awaited piece of the puzzle that is cross border dispute
resolution", the convention will provide greater
certainty as to the enforcement of judgments between the UK and EU
member states post Brexit.
- Farewell to the Shareholder Rule. For over a
century, the courts of England and Wales have ruled that a company
cannot assert privilege against its own shareholders save in
respect of communications concerning hostile litigation between the
company and the shareholder. However, the so called
"Shareholder Rule" was found to be unjustifiable in the
case of Aabar Holdings SARL v Glencore PLC & Ors
[2024] EWHC 3046. In light of this ruling, the circumstances in
which a company can be compelled to disclose privileged information
to shareholders has been significantly curtailed. With a general
increase in shareholder activity before the courts, this decision
will have far reaching consequences. Claimants expecting to see a
company's privileged documents will find they are privy to less
information than before. For defendant companies, they can with a
greater degree of confidence assert privilege to curtail the
disclosure of legal advice to shareholders bringing a
dispute.
- Another Record Year for Companies House?
2023-2024 was a record year for Companies House, with fines of
£34.4m imposed on private companies for filing their accounts
late – this is nearly three times the amount imposed in
2019-2020. With the Economic Crime and Corporate Transparency Act
in force as of March 2024, Companies House has a new and improved
toolkit for tackling civil and criminal fraud, including greater
powers to query information and request supporting evidence, new
rules for registered offices and email addresses, and (crucially)
the ability to share data with other government departments and law
enforcement agencies. With Companies House's success in
imposing fines in the last year, companies should take stock to
ensure their houses are in order.
- Artificial Intelligence. The potential
positive impact associated with the use of generative AI and large
language models has been shared widely by various members of the
judiciary including the Master of the Rolls. However, the pitfalls
of AI are also coming to light as the barriers limiting its use for
fraud are reduced. Sophisticated generative AI models are readily
available on an open-source basis and fake content is becoming
mainstream. Therefore, it is only a matter of time before the
courts will start routinely dealing with fraudsters that have
deployed AI for fraud and scams at scale. This may be through the
use of AI-generated text and images or through deep fake videos and
voice cloning technology. Organisations will need robust procedures
in place to limit damage done to ensure a scam of this nature does
not get through their defences. Ironically, it is likely that
organisations will increasingly turn to AI to help tackle fraud,
for example, by identifying potentially fake content or malicious
user profiles.
- Mitigating the impact of PACCAR. In R (PACCAR Inc and others) v Competition Appeal Tribunal and others [2023] UKSC 28, the Supreme Court held that litigation funding agreements which provide that, if the claim is successful, the funder is entitled to a percentage of any damages recovered, are damages-based agreements and must therefore comply with the Damages-Based Agreements (DBA) Regulations 2013. The Litigation Funding Agreements (Enforceability) Bill 2024 which was introduced by the UK's previous Conservative government last year would have reversed the decision in PACCAR but it failed to make it through Parliament before the general election. The current Labour government has indicated that it will take a comprehensive look at the legislation once the Civil Justice Council concludes its report on third party civil litigation funding which is anticipated in the summer of this year. Whilst third party litigation funding has a critical role in enabling access to justice, the current government is keen to ensure that adequate safeguards are in place to protect claimants from unfair terms. The result is that we may see the most significant shakeup of the litigation funding landscape since the introduction of the DBA Regulations over a decade ago.
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