In London we anticipate another busy round of litigation in 2025
Of the main areas for dispute that we believe will continue next year, is the efforts of shareholders to hold to account companies and funds into which they invest. Interestingly, the English court has recently held (Allianz v Barclays) that prospective claimants against fund managers or companies have to have engaged with the entity’s reports and accounts, AGM etc rather than simply jump on the bandwagon of activist litigants. This may prove a soft break on the shareholder litigation front, but not an end to this high-profile area of law – purely the most active shareholders alleged to have been directly affected by conduct of the defendant will be able to pursue their interests.
One notable pressure point will be shareholders and consumers’ concerns over the use of AI and data rights – we see this as a notably developing area of law following the trend shown in the US already, with various muted claims against Open AI, ChatGPT, Microsoft etc. These new areas for litigation will run alongside the more common risks to corporates such as complaints of (lack of) ESG compliance, such as greenwashing, DEI initiatives etc.
Another factor in litigation in England will be whether the law relating to litigation funding will be amended, in light of last year’s trucks cartel case (PACCAR). Truck manufacturers succeeded in defeating competition law claims before the Competition Appeal Tribunal, as the UK’s Supreme Court ruled the agreements struck between the claimants and their litigation funders were damages-based agreements and not compliant with the relevant legislation so therefore unenforceable. Understandably, this threatened a whole class of litigation funding and all those collective actions that were before the CAT. Under pressure, the previous government vowed to change the law to ease access to continued litigation funded group actions, but the general election put paid to any progression. So the ball is in the current government’s court to bring forward new legislation swiftly.
And we will continue to see a focus by regulators on requiring those they regulate to focus on prevention of misconduct (whether financial or non-financial), with ever increasing fining powers. Specifically relating to cultural issues involving non-financial misconduct (eg sexual impropriety, bulling, harassment etc) the Financial Conduct Authority is set to publish its rules and expectations of regulated companies and firms, in early 2025. This will be followed later in the year by similar policy statements on matters of diversity and inclusion, following research into these areas earlier this year. The legal profession’s regulator, the SRA, is taking a similarly interventionist approach and we predict a continued uptick in litigation over such conduct and cultural issues during the coming year.
And last but not least, the employment tribunals will find themselves equally as occupied during the coming year as a raft of claims arise for unfair dismissal in light of the zero-tolerance approach many employers have taken to matters of non-financial misconduct. We’ve seen internal investigations that have been suggestive of non-consensual inappropriate behaviour which has led to terminations of employees’ contracts, but circumstances suggest that some investigations’ findings (and therefore the dismissals) could be ripe for challenge.
So, while Bell Yard expects to be busy in London during 2025, before then at least, here’s to a dispute free Christmas season – cheers!