Dispute Resolution Round-up - August 2023

• Published date: 30 August 2023
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Criminal Law, Technology, Corporate and Company Law, Contracts and Commercial Law, Arbitration & Dispute Resolution, Trials & Appeals & Compensation, White Collar Crime, Anti-Corruption & Fraud, Fin Tech
• Law Firm: Travers Smith LLP
• Author: Mr Robert Fell

Welcome to the latest edition of our quarterly disputes newsletter, which covers key developments in the dispute resolution world over the last three months or so.

The last quarter has seen interesting developments across a range of areas in which we operate, including notable decisions in two large pieces of ESG-related litigation, a warning to corporates to ensure that they structure their internal investigations carefully should they wish to preserve privilege, and an interesting decision in the context of a crypto fraud which may in future lead victims of such frauds to recast the tools they deploy against the cryptocurrency exchanges that they suspect hold their misappropriated assets. We have also seen continued attempts to use the representative action route under CPR 19.8 to get mass claims off the ground, with varying degrees of success. Finally, two notable Supreme Court decisions were handed down in July, the first a much-anticipated clarification of the application of the so-called "Quincecare" duty upon banks to prevent certain types of fraud. The second Supreme Court decision, in which Travers Smith acted for the successful appellants, has significant implications for the third-party litigation funding market, determining that most current litigation funding agreements which provide for funders to receive a cut of damages awarded are likely to be unenforceable.

We hope that you continue to enjoy reading this round-up, whether a litigator by trade or a generalist, and whether in-house or in private practice, and that you will share it with any of your colleagues who may also find it useful.

Rob Fell

News

UK signs Singapore Convention

On 3 May 2023, the UK signed the Singapore Convention on Mediation (the "Convention"). The Convention provides an international framework for the enforcement of settlement agreements drawn up following a successful mediation. Broadly speaking, the Convention will apply where the agreement in question resolves a commercial dispute which is international in nature. It puts in place an enforcement regime where previously parties had to bring court proceedings for breach of contract.

For the Convention to become effective in the UK, it needs to be ratified by Parliament and an instrument of ratification must then be delivered to the United Nations. The steps required for ratification, including adjustments required to the domestic legal framework, are currently being progressed and it is expected that ratification will take place in early 2024. The Convention becomes effective 6 months after ratification.

Presently, there are 56 signatories to the Convention, of which 11 have completed ratification. It is worth noting that the Convention is not reciprocal, meaning that member states will have to enforce settlement agreements arising from mediations anywhere in the world as opposed to only those from other member states.

New UK measures to address SLAPPs

On 13 June 2023, the UK government announced plans to introduce new measures to address Strategic Lawsuits Against Public Participation ("SLAPPs") through amendments to the Economic Crime and Corporate Transparency Bill. There is currently no legal or statutory definition of a SLAPP, but the term is most often used to describe a form of retaliatory litigation intended to deter freedom of expression. This type of litigation tends to be brought by powerful individuals or entities to target acts of public participation which are of social importance, for example, oppressive litigation brought in order to prevent the publication of information which is in the public interest. The proposed measures will only address SLAPPs relating to economic crime and corruption.

Under the new measures, defendants will be able to use an "early dismissal mechanism" to avoid meritless or abusive claims that aim to prevent the publication of information where it is in the public interest to do so. This will require the satisfaction of two tests - firstly that the claim meets the definition of a "SLAPP", and secondly a consideration of whether the claim has a reasonable chance of success. The exact wording of the mechanism is yet to be published, although some commentary on what will constitute a SLAPP for the purpose of the new measures has been published in a press release.

It remains to be seen how the new measures will achieve the desired outcome of providing defendants with greater protection over and above the present approach available, which is to apply for a strike-out, particularly where the process under the proposed measures appears to be largely similar to that of such an application.

It is also unclear when the government will tackle SLAPPs outside of the economic crime and corruption arena, although it is noted that it will "introduce comprehensive anti-SLAPP measures as soon as parliamentary time allows". The justification for tackling this area first seems to be that around 70% of cases considered by the government in a report about SLAPPs published in April 2022 were connected to financial crime and corruption.

Read our detailed article here.

New corporate failure to prevent fraud offence announced

In April 2023, the UK government announced its intention to introduce a new failure to prevent fraud offence through amendments to the Economic Crime and Corporate Transparency Bill. The same legislation also tackles the prevention of false accounting and money laundering. The scope of application in relation to money laundering appears to be limited to a list of types of organisations, whereas in the case of fraud and false accounting, the legislation is intended to apply to large organisations (defined as organisations meeting two out of three of the following criteria: more than 250 employees, more than '36 million turnover, and more than '18 million in total assets).

Similar offences exist under the Bribery Act 2010 and the Criminal Finances Act 2017 with regard to the prevention of bribery and tax evasion respectively. The current threshold for holding an organisation liable for fraud requires that a "directing mind and will" was directly involved, which has proved a high bar to reach.

The proposed new offence is intended to make it much easier to hold an organisation liable if they benefit from fraud committed by their employees and agents and do not have "reasonable fraud prevention procedures" in place. It is expected that the government will publish further guidance on what will constitute "reasonable procedures" in due course.

Read our detailed article here.

Government makes partial U-turn on retained EU law reform - but uncertainty remains

On 11 May 2023, the UK government announced a partial U-turn on the Retained EU Law (Revocation and Reform) Act (Royal Assent received on 29 June 2023), which was scheduled to abolish the majority of retained EU legislation unless specifically saved by the end of the 2023. Instead, some 600 named pieces of retained EU law will be specifically repealed. Whilst this change of approach is welcome (as the original "sunsetting" proposal had been very widely criticised), businesses should note the following:

• With the disapplication of other EU law principles such as supremacy and proportionality, there is a concern that the Act will result in uncertainty as to the interpretation of retained EU law or worse an...