On 22 November 2023, we held an online Disputes Conference aimed at in house lawyers.

The event was chaired by Jonathan Hoey, Partner and Head of Financial Services Litigation at TLT. Our guest speaker was Graham Cluley - a computer security who has been at the forefront of cybersecurity for over 25 years. Graham’s talk considered the everyday threats faced by organisations and how to best deal with those threats in practice. The conference was also a fantastic opportunity for our clients to hear directly from our TLT disputes specialists who shared their insight and expertise on current and future trends across the disputes landscape. Here are some of our key takeaways from the conference for 2024.

Economic uncertainty

  • Supply chain issues – Review supply contracts and carry out due diligence as to the resilience of suppliers, keep a close eye on cash flow and debtor days, and have a Plan B in place in case of the failure of a key supplier.
  • Rising corporate and personal insolvencies – Seek advice early to ensure directors are acting in accordance with their duties and any security or guarantees are enforceable; consider reviewing shareholder agreements in anticipation of an increase in shareholder disputes.
  • Increasing mortgage enforcement activity - Ensure internal litigation and/or recovery teams are appropriately resourced to deal with increasing volumes and/or ensure that outsourcing and supplier arrangements have been reviewed and audited.

Fraud and regulatory

  • The Economic Crime and Corporate Transparency Act – Be aware of the new offences: senior managers will need training on the implications of these as well as the new ways in which UK companies and LLPs must manage themselves, appropriate systems and training will be essential. Learn more about the Economic Crime and Corporate Transparency Act’s key reforms in our article series
  • Increasing regulatory activity – Carry out internal reviews to ensure compliance with the consumer duty, ESG disclosures and other regulatory requirements in order to pre-empt challenges and regulatory scrutiny.
  • Cyber security – Review your cyber security systems and controls, be aware that data breach claims are likely to increase as we see more ransomware attacks.

Consumer Duty

  • Not once and done – Although 31 July has passed, regulated firms need to continue their work to embed the Duty and evidence compliance.
  • Expect FCA action – Given the amount of guidance the regulator has provided regarding implementation of the Duty, the FCA is likely to take an assertive approach to enforcement in the event of breaches.
  • Data will be key – Data will be key to firms’ ability to monitor and demonstrate compliance with the Duty.
  • No right of action – There is no right of action for breach of the Duty, however we expect to see it being raised in FOS complaints and in litigation to support other allegations.

Read our full guide to the Consumer Duty.

ESG from a regulatory and litigation perspective

  • Accuracy and consistency – This is key and can be a minefield – the larger the organisation, the larger the scope of operations, the greater the risk of inaccuracy in terms of reporting, meeting reporting requirements and deadlines. Check that you are satisfied that you can, with evidence, determine and show that you can comply and have complied with those reporting requirements and have shown consistency in approach. This is the area where we are seeing regulators starting to unpick what organisations have said. Therefore, check what you are saying to your shareholders, check what your ESG committee is doing, what their terms of reference are and what are you saying to your customers. Is that all aligned from a central message?
  • Clear, fair and not mis-leading - Learn from the wave of mis-selling claims following the financial crash in 2007-08, which focussed on issues similar to those which we anticipate will feature in future greenwashing claims. The issues will include whether customers are adequately and accurately informed of how particular products work, what the (green) benefit of the product is and whether the product operates as expected. Firms should make sure they accurately set out what the product does, explaining it to the customer and why it meets the green credentials it purports to.
  • Engagement - Consider what you are doing both internally and externally to engage with others in your sector in relation to ESG issues. The CMA has relaxed the competition rules in relation to any such discussions that may take place at a horizontal level between competitors who want to co-operate on environmental goals with a driver to promote change.
  • Reputation - Current ESG claims are generally not aimed at ‘winning’ in the traditional sense and are often brought to bring about behavioural change, raise awareness of the issues, and generate publicity. As a result, most of the cases don’t currently progress and are successfully challenged but be careful of your approach and reputation in managing and responding to those disputes. Maintaining your reputation is key.
  • Subsidiaries - In terms of parent company liability, think about the risks from subsidiary companies. Consider what their ESG policies are and whether you have sufficient oversight of the subsidiary operations in terms of governance and adoption and implementation of policies.  

Using tech in disputes

  • Identify demand – Technology is most effective where there is an existing demand and appropriate technology is put in place to solve that problem; a cost benefit analysis is needed to assess whether the technology being proposed is proportionate. A comprehensive change management process is also needed to ensure users are not alienated during implementation.
  • Start simple – Begin by using existing technology already available within your organisation: for example, centralising critical dates using your calendar function or setting up project management tools using your spreadsheet software.
  • Use technology at the outset – Technology can be used to identify the scope of a project, number of documents and additional requirements (such as language needs) to help an instruction or project get off to a good start.

Future trends in technology and impact on disputes

  • Risk reduction - Using decision trees or chatbots to access information otherwise hidden away in policies can minimise risk within an organisation – similarly, simulated training scenarios can be used to identify areas of high risk and ensure they are addressed before taking on live matters.
  • Generative AI - It can enable lawyers to ask questions about disclosure set and pull through relevant material for review. However, it’s most effective when used by experienced lawyers with the confidence to pick up errors, as technology may not be capable of critiquing the data it receives.
  • The changing role of lawyers - There’s a growing demand for traditional lawyers who are also creative, innovative and interested in technology, with further opportunities in the operational space as much as or perhaps more than in the legal space.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at December 2023. Specific advice should be sought for specific cases. For more information see our terms & conditions.

Date published

19 December 2023


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