- 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.
About the Authors:
Greenberg Traurig’s UK Civil Fraud & Business Disputes Group comprises experienced lawyers who have collectively handled myriad high-profile and sensitive multi-jurisdictional civil fraud matters and business disputes. We serve corporations and individuals across a diverse range of sectors/industries, including retail, finance and investment, energy, and real estate. Our years of experience acting for claimants and defendants allow us to deftly advise clients and anticipate opponents’ strategies.