Dispute Resolution Year in Review and Year to Come

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A Global Perspective

2020 was an unusual year globally, compelling new approaches and attitudes to dispute resolution as the world’s legal systems adapted to the impact of the Covid-19 pandemic. Virtual court hearings, trials, arbitrations and mediations, and changes to traditional practices and procedures, have been part of that. While some of these changes may be short-lived, others may be adopted permanently. In addition, the UK finally left the EU, transforming the UK’s trading relationship with the rest of the world and resulting in significant changes to the handling of cross border disputes.

Looking ahead, it is likely that collective redress procedures will become ever more significant as an increasing number of jurisdictions introduce procedures to facilitate their use. The development of arbitration as a global method of dispute resolution is set to continue, while locally, governments and enforcement authorities will be seeking to reinforce their efforts to tackle corporate crime.

The Dispute Resolution Year in Review and Year to Come – A Global Perspective draws together analysis, thought leadership and highlights from our Dispute Resolution lawyers around the world. The guide summarises a selection of the major developments in dispute resolution from 2020 and highlights a number of significant developments on the horizon in 2021.

Global

New EU Directive to enable collective redress for European consumers: The Directive (EU) 2020/1828 on representative actions for the protection of the collective interests of consumers was approved by the end of 2020. The EU member states have until the end of 2022 to implement the Directive into national legislation, with a further six months for the new processes to come into effect.

Revised EU Service and Evidence Regulations: The regulations on the taking of evidence and the service of documents were amended to make access to justice faster, cheaper and more user-friendly through digitalisation in civil and commercial matters. Changes to both regulations include the use of a mandatory decentralised IT system to exchange documents electronically cross-border. Both recasts will apply from 1 July 2022.

Treaty to terminate intra-EU BITs enters into force: On 29 August 2020, the Agreement for the Termination of Bilateral Investment Treaties (BITs) between the Member States of the European Union came into force. The Agreement was signed by most EU Member States except for Austria, Finland, Ireland and Sweden. It remains to be seen whether foreign investors may still rely on the protection afforded by intra-EU BITs and what alternative mechanisms will be implemented to protect intra-EU cross-border investments.

New LCIA Arbitration Rules – Effective 1 October 2020: The 2020 LCIA Rules, which apply to any LCIA arbitration commenced on or after 1 October 2020, make a number of modifications to the preceding 2014 LCIA Rules. The changes largely build on, and refine, those rules with the aim of more explicitly addressing issues of contemporary arbitration best practice and refining/expediting procedures.

Singapore Mediation Convention now in effect: The Singapore Convention on Mediation came into effect on 12 September 2020, six months after the third country to ratify did so. The Convention is now operative for Singapore, Fiji and Qatar. Saudi Arabia, Belarus and Ecuador have also ratified and the Convention will come into effect for them three months after the date of their ratifications. Although important jurisdictions such as the UK, Australia and the EU are still to sign up, participation is under consideration in these key global players. Under the Convention, parties will be able to apply directly to the courts of party states which have also ratified the Convention to enforce settlement agreements resulting from mediation, without needing to initiate new proceedings.

Australia

Class action developments: In April, the Federal Court refused to order disclosure of the respondent's insurance policies to the applicant, holding that the court's case management powers and the overarching purpose of the legislation (which have previously been successfully relied on) did not empower the court to make that order. In May, the Federal Government announced that litigation funders operating in Australia must hold an Australian financial services licence and comply with the managed investment scheme regime. The Government also announced temporary easing of the Corporations Act continuous disclosure rules until late November. In August, the Parliamentary Joint Committee on Corporations and Financial Services completed its inquiry into litigation funding and regulation of the class action industry.

Belgium

New evidence rules came into force: Book 8 is the first book of the new Civil Code to have been adopted in 2019 and came into force on 1 November 2020. Book 8 adapts the Belgian rules on evidence to the needs of the modern legal world. It codifies concepts developed by case law and legal doctrine (e.g. the duty to collaborate in the administration of evidence); provides for uniform and contemporary definitions of concepts such as ‘signature’ and ‘document’; lessens the formalistic approach to the evidence rules (e.g. by raising the threshold above which documentary evidence is required from EUR 375 to EUR 3,500); and introduces new techniques (e.g. the reversal of the burden of proof in exceptional circumstances).

Digitalisation of the judicial system: In the framework of the digitalisation of the judicial system, the Law of 20 May 2020 concerning various provisions with regard to justice further allows the electronic filing of new categories of procedural documents. This measure remains in force until 31 March 2021. This expanded use of electronic platforms is likely to become permanent as digitalisation of the judicial system is at the top of the agenda of the new Belgian federal government.

Setting up chambers for the amicable settlement of disputes: On 1 September 2020, the Brussels Court of Appeals and the French-speaking Enterprise Court of Brussels established a chamber dedicated to the amicable settlement of disputes. This initiative aims to foster the opportunity for litigants to come to a negotiated solution in less time and with lower costs. The procedure is voluntary and confidential. The parties must appear in person but can be assisted by their lawyers. An agreement reached by the parties can be ratified by the court. However, if no agreement can be reached, this does not affect the ability of the parties to continue normal court proceedings.

English law

Serious Fraud Office guidance: New guidance issued by the SFO during 2020 consider two aspects of their investigations.

The first issued in January, stresses that the SFO will consider the effectiveness of an organisation’s compliance policy as part of any investigation into possible wrongdoing.

The second publication, issued in October, aims to provide further transparency on what it expects from companies looking to co-operate with the agency with a view to being offered a deferred prosecution agreement.

New insolvency legislation fast-tracked: The UK government fast-tracked the Corporate Insolvency and Governance Act 2020 through parliament. The purpose of the Act is to ensure that the UK maintains a leading edge in insolvency and to “re-invigorate its rescue culture”. The Act provides temporary Covid-19-related measures which affect wrongful trading and winding up petitions, and introduce a new cram-down procedure, a new moratorium and a prohibition on the enforcement of contractual rights. The Act represents the biggest shake-up to the UK insolvency regime since the Enterprise Act came into force 17 years ago. The Covid-related provisions will assist and perhaps spare struggling companies through this unprecedented time, while the more substantive amendments are aimed at aiding companies that might be suitable for restructuring.

Legal professional privilege under the spotlight: In SDl PLC v the FRC [2020] EWCA Civ 177 the Court of Appeal examined whether a regulator could obtain from an entity under investigation, a third party’s privileged material. Read more… Meanwhile, in Jet2.com [2020] EWCA Civ 35, it examined legal advice privilege in relation to multi-addressee emails and applied a “dominant purpose test”.

Supreme Court considers important aspects of English arbitration law: In a landmark decision in October (Enka Insaat Ve Sanayi AS v OOO “Insurance Company Chubb” & Ors [2020]) the UK Supreme Court examined the rules applicable before the English courts as to what law governs an arbitration agreement (Read more…). Following that decision, at the end of the year, in the case of Halliburton v Chubb [2020] UKSC 48, it decided important issues relating to an arbitrator’s duty of impartiality, apparent bias and disclosure in English seated arbitrations.

Supreme Court paves the way for UK collective actions in landmark decision: In its much-anticipated judgment in Walter Merricks CBE v Mastercard Incorporated [2020], the Supreme Court has (largely) upheld the decision of the Court of Appeal, remitting the proceedings to the CAT for further consideration of whether a CPO should be granted.

Mass tort claims against multi-national groups blocked: In two high profile decisions, the High Court rejected significant group actions brought against multinational groups. In Jalla and others v Shell [2020], important observations were made about the nature of representative actions and their use. In the Municipo di Mariana case [2020] EWHC 2930, one of the largest mass tort claims ever before the English courts was dismissed for abuse of process.

France

Paris Court of Appeal clarifies place of international sanctions in French international public policy: In a decision of 3 June 2020 denying an action to set aside an arbitral award, the Paris Court of Appeal clarified the test for determining whether an international sanctions regime should be considered a part of French international public policy. The Court upheld the award against the contention that it failed to consider international sanctions against Iran. The Court held that US sanctions against Iran do not form part of French international public policy, as they do not reflect an international consensus and are opposed by both European and French authorities. On the contrary, UN sanctions and EU sanctions against Iran were found by the Court to carry values which fall within French international public policy, but the Court determined that the dispute did not fall within the material and/or temporal scope of those sanctions, and so the Court held that the award did not breach French international public policy.

Publication of a guide on gifts and hospitalities by the French Anti-Corruption Agency: The French Anti-corruption Agency (AFA) has published a short and practical guide on 11 September on gifts and hospitalities, following a public consultation. Although non-legally binding, these guidelines target all private entities operating in France and invite them to adopt a policy on gifts and hospitalities to mitigate their bribery and influence peddling risks.

The guidelines aim at providing private entities with concrete guidance and best practices on (i) the drafting and (ii) the implementing of a gifts and hospitalities policy. These guidelines have already been in place for a number of years for banks and listed societies but were rarely used for small and medium businesses.

France/UK/US: Airbus agreed record global settlement for bribery: Airbus reached a record-breaking €3.6bn global settlement with French, UK and US authorities regarding allegations of bribery and corruption. This involved deferred prosecution agreements reached after a joint investigation by the UK’s SFO and the French Financial Prosecutor (PNF) and a parallel US investigation, together covering 16 jurisdictions. A further €8.5m were agreed to be paid for the three year monitoring of Airbus by the French anti-corruption agency. The global settlement provides key insights into the conduct of international investigations, a warning on the far-reaching implications of wrongdoing and guidance on best practice for multi-nationals.

Germany

Collective Redress: Since the introduction of the Model Declaratory Action Act (Musterfeststellungsklagengesetz) in November 2018, less than a dozen proceedings of that kind have been launched. The public focused on the action against VW, which ended with an out-of-court settlement in spring 2020. In parallel, the EU institutions agreed, after highly controversial discussions, on a “Directive on representative actions for the protection of the collective interests of Consumers” in June 2020, that goes far beyond existing collective redress mechanisms in Germany.

UPC Ratification: The Federal Constitutional Court (BVerfG) ruled the German ratification act for the Agreement on a Unified Patent Court (UPC) unconstitutional because the parliament did not approve it with the required two-thirds majority. The government presented a new draft ratification act which was passed in accordance with the majority requirements but remains unchanged in substance. However, the BVerfG has received two constitutional complaints challenging the new ratification act.

Follow-on damages claim in truck cartel dismissed: The Regional Court of Munich has dismissed Germany’s largest follow-on action relating to the truck cartel. 3,200 truck buyers had assigned alleged claims relating to more than 84,000 trucks to the plaintiff financial right claims GmbH, which is seeking damages in excess of €600m from the truck manufacturers Daimler, MAN, Volvo/Renault, DAF and Iveco. In its ruling, the Regional Court held that financial right claims GmbH had violated the Out-of-Court Legal Services Act (Rechtsdienstleistungsgesetz), by exceeding the bounds of its debt collection licence, rendering the assignment of the damages claims invalid. The court also ruled that the assignment model results in an irresolvable conflict of interests for the plaintiff. The judgment is ground-breaking for the so-called assignment model which, in the absence of a genuine class action in Germany, is chosen for many mass proceedings (also outside of competition law).

Hong Kong SAR

Hong Kong National Security Law and US-China relations: On 30 June 2020, the Hong Kong National Security Law (“NS Law”) came into effect, criminalising acts of secession, subversion, terrorism and collusion with a foreign country or external elements. The U.S. in turn revoked Hong Kong’s “special status” and implemented a Hong Kong-related sanctions program. Blocking sanctions, which require U.S. persons to freeze property and refrain from almost all dealings with blocked persons, were initially imposed on 15 individuals. Secondary sanctions may be imposed on any foreign financial institution that knowingly conducts significant transactions with blocked persons. From 11 January 2021, U.S. persons are prohibited from engaging in any transaction in publicly traded securities (or their derivatives) of designated Communist Chinese military companies.

Asymmetric jurisdiction clauses: The Hong Kong courts held that asymmetric jurisdiction clauses did not confer exclusive jurisdiction in favour of the courts in Hong Kong and therefore did not constitute a “choice of Hong Kong court agreement” for the purpose of enforcement in the PRC under the Mainland Judgments (Reciprocal Enforcement) Ordinance in Industrial and Commercial Bank of China (Asia) Ltd v Wisdom Top International Ltd [2020] HKCFI 322.

Asymmetric clauses, which usually provide that one party must sue the other party in the courts of a specified jurisdiction while the other party is free to sue in the jurisdiction of its choice, are commonly found in international financial documents. However, one must carefully consider this option where enforcement action may potentially be required in the PRC. The “choice of court agreement” has been removed in the new Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters between the Courts of the Mainland and the HKSAR (Arrangement), which has been signed but has yet to take effect pending implementation.

Increased coordination between courts: In January 2020, the Hong Kong courts for the first time recognised and granted assistance to PRC court-appointed administrators in Joint and Several Liquidators of CEFC Shanghai International Group Ltd [2020] HKCFI 167 and further sanctioned a scheme involving cancellation of PRC law governed debts, in the first ever application of its kind. We expect increased coordination between the PRC and Hong Kong courts, with recent insolvency matters demonstrating the potential for and benefits arising from closer collaboration.

Luxembourg

Criminal liability of companies: The law transposing Directive (EU) 2017/1371 for the protection of the EU's financial interests was published on 12 March 2020. In particular, the law amends article 34 of the Criminal Code which states the criminal liability of legal entities under Luxembourg law. The reform is in line with the current case law and does not represent a major legal upheaval.

International data transfers: In Schrems II, the CJEU decided the EU-U.S. Privacy Shield no longer justified transfers to the U.S. and transfers based on Standard Contractual Clauses must be individually risk-assessed. This will complicate international data transfers.

Netherlands

Collective Damages Act: The Collective Damages Act (WAMCA) came into force on 1 January 2020. Its key element is the possibility of claiming monetary damages in a collective action based on Section 3:305a of the Dutch Civil Code. It also includes stricter requirements for the representative organisations filing the collective action, such as transparency regarding their funding. In addition, there are changes that make proceedings more efficient and effective. For example, an Exclusive Representative will be appointed, collective actions relating to similar events will be dealt with together and there is a focus on the (collective) settlement of the claims. The EU institutions agreed, after highly controversial discussions, on a “Directive on representative actions for the protection of the collective interests of Consumers” in June 2020. This could lead to changes in the WAMCA, although the government believes not.

Virtual court hearings: As a consequence of the COVID-19 outbreak, on 17 March 2020 the judiciary in the Netherlands decided to immediately close down court premises, meaning that judges and the courts’ staff were largely working from home (to the extent possible). New cases, submissions in pending court proceedings or correspondence with the court could still be filed (by post, fax or email). With respect to commercial disputes in particular, “in person” hearings were held only in “extremely urgent” cases. In order to move pending cases forward, the courts started to request the parties to submit their preferred way of continuance of the case, whereby a virtual hearing was stated as one of the options. The adopted Emergency Act COVID-19 expressly provides that the court may hold hearings through audio-visual equipment without the consent of one or more of the parties.

E-signing: COVID-19 has resulted in the increased use of e-signing tools for commercial agreements. The past year also has also seen cases where a party has disputed the authenticity of an e-signed document. In those cases, the Dutch courts found that the e-signing protocols followed did not qualify as advanced electronic signature under the EU’s eIDAS Regulation. This will not in itself invalidate any Dutch law agreements signed in this way, unless there is a legal requirement that the agreement be signed in person. However, the party seeking to rely on agreement will be worse off under civil evidence rules, leaving parties that accept e-signings somewhat more exposed to authenticity defences than parties that still require wet-ink signatures. In a commercial practice where there is trust between the parties, we still do see parties continuing to use electronic tools.

Linklaters succeeds before the new Commercial Court: The Netherlands Commercial Court (NCC), which opened on 1 January 2019, is competent to hear international civil and commercial matters in the English language if the Court of Amsterdam is competent and parties agree to submit their case to the NCC in English. EU lawyers and other foreign lawyers – acting together with Dutch lawyers – can appear before the Court. These advantages, together with the excellent reputation of the Dutch courts, are likely to encourage international parties to submit their disputes to the NCC.

Dutch Supreme Court rules on issues of sovereign immunity: On 18 December 2020, in a case between Kazakhstan and Samruk (a Kazakh sovereign wealth fund) against the Stati investors (arising out of an arbitration under the Energy Charter Treaty), the Dutch Supreme Court ruled that there is a presumption that – based on the doctrine of sovereign immunity – state property is not subject to execution unless it is proven that the relevant assets are not ultimately held for sovereign purposes. In this context, the Supreme Court found that the burden of proof falls on the party seeking enforcement and execution against State property, and that a State is not obliged to provide information showing that the relevant assets have a sovereign purpose.

The judgment is available (in Dutch) here.

Russia

New rules of resolving disputes with sanctioned companies: On 19 June 2020 a new law amending the provisions of the Arbitrazh Procedure Code of Russia (the “New Law”) came into force. These amendments introduce new rules of resolving disputes with Russian individuals or Russian or foreign companies which are under economic sanctions imposed by other states.

Success fee was recognised as a valid fee structure: On 1 March 2020 the amendments for the Federal Law dated 31 May 2002 No. 63 “On Advocate’s Activity and the Bar in the Russian Federation” came into force. These amendments legalised the success fee structures. The amendments expressly allow success fee structures in legal service agreements which: (1) are concluded with advocates; (2) cover only civil law cases; (3) contain a success fee structure that corresponds to the rules which should be developed by the Federal Chamber of Advocates.

Singapore

Amendments to International Arbitration Act: Following a public consultation exercise in 2019, two key amendments to the International Arbitration Act came into force in December. The amendments relate to (i) powers to enforce confidentiality obligations, and (ii) the introduction of a default mode of appointment of arbitrators in multiparty situations.

Key dispute resolution cases: In BNA v BNB [2020], the Singapore Court of Appeal held that where a dispute resolution clause is silent as to the governing law of the arbitration agreement, the starting point is generally that the law of the arbitration agreement would follow the main agreement unless displaced by indications to the contrary.

In BP Singapore Pte Ltd v Jurong Aromatics Corp Pte Ltd [2020], the Singapore Court of Appeal held that there is no mutuality and insolvency set-off is not available as between unsecured debts owed by a company to trading partners incurred prior to receivership, and secured debts owed by the same trading partners to the company incurred during the receivership.

In AnAn Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Co) [2020] 1 SLR 1158, the Singapore Court of Appeal clarified the position under Singapore law that where there is a disputed debt or a cross-claim that is subject to an arbitration agreement, the courts will apply a prima facie standard of review such that winding-up proceedings should be stayed or dismissed so long as (i) there is a valid arbitration agreement between the parties, and (ii) the dispute falls within the scope of that arbitration agreement, provided that the dispute is not raised by the debtor in abuse of the court’s process.

Spain

Setting aside of arbitral awards: In its ruling on 15 June 2020, the Spanish Constitutional Court lay down limits to the expansive interpretation of public policy that had been followed by the Madrid High Court of Justice.

Sweden

The SCC adopts a model agreement for submission of an existing dispute to arbitration: The Arbitration Institute of the Stockholm Chamber of Commerce (“SCC”) has adopted a new model agreement for submission of existing disputes to arbitration. The new model agreement is intended for disputes that are either pending in court or are about to be referred to court. The purpose of the new model agreement is to facilitate the use of arbitration in relation to disputes where the parties have not previously agreed on arbitration as the applicable dispute resolution method. Submission agreements can be entered into after a dispute has arisen and may include a reference to a specific disputed matter. According to the SCC, submission agreements have been a highly requested tool in the last few months due to the increasingly high backlogs in courts as a result of the Covid-19 pandemic.

UAE

Dubai Court judgment enforced in England: The English High Court recognised and enforced a judgment of the Dubai Courts in Lenkor Energy Trading DMCC v Irfan Iqbal Puri [2020]. The case was decided on common law principles, as there is no enforcement treaty between the UAE and the United Kingdom.

U.S. Law

FCPA developments: In February 2020, in U.S. v. Hoskins, the Court of Appeal for the Second Circuit overturned the controversial conviction of a former Alstom executive for FCPA violations, which potentially limits the U.S. government’s ability to bring charges against non-U.S. nationals for conspiring to violate, or aiding and abetting violations of, the FCPA.

In July 2020, the DOJ and SEC updated the FCPA Resource Guide to address the Hoskins decision, among other things.

Meanwhile, the U.S. government settled major FCPA cases, including against Goldman Sachs (US$2.9bn in global penalties) and Airbus (US$3.9bn in global penalties).

SEC disgorgement authority upheld: In an important decision governing the SEC’s enforcement ability, Liu v. SEC, the Supreme Court issued a decision affirming the SEC’s authority to continue using disgorgement as a remedy in federal court enforcement actions, as long as the disgorgement does not exceed a wrongdoer’s net profits and is awarded for victims.

DOJ, CFTC update corporate compliance guidance: In June, the DOJ published updated guidance on its approach to the evaluation of corporate compliance programs, reflecting a more nuanced approach that places greater emphasis on data analysis and takes into account lessons learned over the past three years and feedback from the business community.

The CFTC also issued further enforcement guidance this year, including civil monetary penalties guidance and guidance outlining factors that the CFTC will consider when evaluating corporate compliance programs in enforcement actions.

U.S. sanctions focus on China, Iran, Venezuela, North Korea: In 2020, the U.S. continued to increase sanctions pressure on Iran, Venezuela and North Korea, while also taking new measures against China in connection with China’s alleged human rights abuses in Hong Kong and with respect to its Uyghur minority. In July, President Trump signed the Hong Kong Autonomy Act, which requires the Secretaries of State and the Treasury to submit a report identifying persons who have materially contributed to China’s actions in violation of the 1984 Joint Declaration or Hong Kong’s Basic Law. The Secretaries must also report to Congress if they have determined that any foreign financial institutions have knowingly conducted a significant transaction with a person identified under the Autonomy Act.

DOJ updates corporate compliance guidance: The U.S. Department of Justice (“DOJ”) has published updated guidance on its approach to the evaluation of corporate compliance programs. The guidance assists federal prosecutors assess the effectiveness of a corporation’s compliance program for the purposes of determining the appropriate form of resolution or prosecution.

U.S. ramps up sanctions pressure on Iran after record-breaking year of enforcement: On January 10, 2020, President Trump issued a new executive order authorizing the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) to designate entities operating in Iran’s construction, mining, manufacturing, textile, or other sectors on a sanctions list and impose secondary sanctions against any entity that supports such designated Iranian companies. OFAC also designated several senior Iranian government officials, Iran’s largest steel, aluminium, and iron manufacturers and certain Iranian metal producers, as well as several non-Iranian entities involved in the purchase of Iranian metals.

U.S. court makes clear non-U.S. entities cannot avoid discovery because of potentially conflicting GDPR obligations: In January 2020, a New York federal judge ordered Telegram Group Inc. to produce to the U.S. Securities and Exchange Commission (SEC) in discovery a series of “highly sensitive” bank records but permitted the company to redact personal data given the company’s concerns about violating the GDPR. In February 2020, a New Jersey federal judge ordered Daimler AG and Mercedes-Benz to make unredacted disclosures of names, positions, titles and contact information of relevant employees as part of U.S. discovery proceedings despite concerns over GDPR given the protective order in place. The court rejected Mercedes-Benz’s argument that a confidentiality order was not sufficient to protect the “weighty interests” provided for under GDPR. . Both decisions serve as an important reminder that non-U.S. entities will not be immune from U.S. discovery because of potential conflicts with GDPR.

Global

Australia

Belgium

English law

France

Germany

Hong Kong SAR

Luxembourg

Netherlands

Russia

Singapore

Spain

Sweden

UAE

U.S. Law

Global

Collective redress: As EU member states work to implement the new Consumer Rights Directive, it is likely that awareness of the opportunities introduced for both claimants and defendants by effective collective redress mechanisms will increase. Mass claims resulting from disruption caused by the pandemic, data privacy actions and tech-related claims are all ideally suited to resolution by collective means. It is therefore likely that we will continue to see a rise in collective actions, both locally and across jurisdictions.

Revised IBA Rules on the Taking of Evidence in International Arbitration: A revised version of the rules was recently approved and is expected to come into effect in 2021. The revisions, the first in 10 years, are largely intended to align the rules with prevailing and best practices. Notable changes include a new provision on the arbitral tribunal’s authority to order a remote hearing after consulting the parties and to develop with the parties a suitable remote hearing protocol; a provision encouraging the tribunal and parties to discuss cybersecurity and data protection when organizing the procedure; clarification of the possibility for witnesses and experts to address new developments in revised or additional witness/expert statements; and a provision recognizing the tribunal’s authority to exclude evidence obtained illegally.

New ICC Rules of Arbitration: The International Chamber of Commerce (ICC)’s revised Arbitration Rules came into effect on 1 January 2021. Revisions concern, among others, provisions on consolidation and joinder, conflicts of interest, electronic filings of submissions, virtual hearings, and a new threshold of US$3 million (instead of US$2 million) for the application of the expedited procedure rules.

Belgium

New Criminal Code and recast of criminal procedure: The bill introducing a new Criminal Code was re-filed with the Parliament in February 2020 and remains high on the agenda of the new government. The reform provides for a new sentencing regime with sentences categorised in eight levels, new types of sanctions (e.g. the closure of facilities, the debarment from public procurement tendering, or a pecuniary sanction fixed on the basis of the profit generated by the offence) and a clear distinction between the sentences applicable to legal entities and those applicable to individuals. The part on the definition of criminal offences has been entirely restructured in order to reflect the shift in social values.

A recast of the code of criminal procedure is also expected. A reformed text was filed with Parliament in May 2020 and provides for a new investigation procedure where the investigative magistrate would only supervise investigations to be entirely led by the Public Prosecutor’s office.

English law

Criminal law enforcement and judicial cooperation following the UK’s departure from the EU: The EU-UK Trade and Cooperation Agreement (TCA), signed on 24 December 2020, contains provisions (in Part 3 and relevant annexes) to provide for law enforcement and judicial co-operation on security-related matters following the UK's departure from the EU, in relation to the prevention, investigation, detection and prosecution of criminal offences and the prevention of and fight against money laundering and financing of terrorism.

Government consultation on proposed economic crime levy: The government may report back on the results of its consultation regarding the introduction of an economic crime levy on regulated businesses as part of its commitment to tackle economic crime.

The terms agreed will be implemented in part via Part 1 and relevant schedules of the European Union (Future Relationship) Act 2020, which received Royal Assent on 31 December 2020, although there remain substantial areas where further detailed working arrangements are still to be agreed. New and updated guidance documents have been published by the UK government. It is expected that additional resources will be published in the coming months.

Brexit and civil and commercial justice: At 11pm (UK time) the EU/UK Transition Period ended. And, despite limited mitigants in the UK/EU Withdrawal Agreement (“WA”), the essential picture for civil and commercial justice in the UK remained one of “no-deal”. This briefing considers the consequences of that scenario.

Law Commission to report on economic crime: The Government published its response to its call for evidence on corporate liability for economic crime in November 2020. As the findings of the Call for Evidence did not produce a clear consensus on how to proceed, the government concluded that further investigation was required before any decisions on reforms could be made.

The Law Commission has therefore been asked to conduct a review of economic crime, to examine whether the current laws are sufficient or whether new offences are needed to make it easier to prosecute crimes such as fraud, money laundering and false accounting, and to consider whether reforms are needed to better hold companies to account for criminal wrongdoing undertaken by them or on their behalf.

The Law Commission is expected to present recommendations for reform in 2021.

Supreme Court judgments and cases: It is anticipated that the Supreme Court will hand down a number of high-profile judgments in the course of 2021, including:

R (ex p KBR Inc) v SFO, which concerns whether the Director of the SFO can issue a notice pursuant to section 2(3) of the Criminal Justice 1987 requiring a foreigner to produce material held overseas.

Read more here… and here.
Okpabi v Royal Dutch Shell, which considers whether and in what circumstances the UK-domiciled parent company of a multi-national group of companies may owe a common law duty of care to individuals who allegedly suffer serious harm as a result of alleged systemic health, safety and environmental failings of one of its overseas subsidiaries as the operator of a joint venture operation.
In addition, in April the Supreme Court is due to hear the appeal Lloyd v Google LLC, a representative action which may open the way for opt-out class actions for privacy breaches.

Germany

Act on Sanctions for Associations: After years of discussion about a corporate criminal law for Germany, the government published the draft bill of a "Law to Strengthen Integrity in Business" in June 2020. Its key part, the Act on Sanctions for Associations (Verbandssanktionengesetz), proposes conceptual and comprehensive changes to the existing system. Despite criticism by the Bundesrat, the draft bill was submitted to the Bundestag in October 2020 with a view to a speedy adoption.

Patent litigation: The government is proposing a reform of the Patent Act, especially with regard to the claim for an injunction. Such claims shall be subject to a proportionality test, thereby bringing German patent law in line with technical and economic changes as well as international standards. The legislative process is expected to be finalised soon.

Supply Chain Due Diligence: The government is discussing a “Due Diligence Act” (Sorgfaltspflichtengesetz), which shall oblige companies to assess whether human rights violations occur in their supply chains. The lead ministries intend to present a draft law shortly and to complete the legislative process during this legislative period (i.e. by autumn 2021) but are experiencing a lot of headwind from the economy and other ministries. In parallel, the EU Commission also announced a legislative proposal on supply chain due diligence for early 2021, which is currently being prepared in a public consultation. Both legislative proposals shall include sanctioning mechanisms.

Hong Kong SAR

Supplemental arrangement concerning mutual enforcement of arbitral awards between the Mainland and Hong Kong (the “Supplemental Arrangement“): On 27 November 2020, the Supplemental Arrangement was signed. After implementation, which is awaited and anticipated in 2021, if any award debtor has assets in the Mainland as well as in Hong Kong, the award creditor may file applications for recognition and enforcement of the award with the relevant courts of the two places concurrently. This is a major improvement from the existing Arrangement, under which enforcement applications cannot be made to the courts of both Hong Kong and the Mainland concurrently. Only when recovery at one place is insufficient to satisfy the total amount awarded can the award creditor apply to the courts of the other place for enforcement. The Supplemental Arrangement also empowers the enforcing court to grant freezing orders and injunctions against the award debtor prior to the court accepting the enforcement application.

Italy

New class action law to come into effect: The postponed new law is expected to come into force in May 2021. This revised version of the collective redress regime provides a wide range of persons with homogeneous rights with the means to obtain compensation for damages deriving from conduct perpetrated by undertakings (imprese), and entities providing public services or utilities, in carrying out their respective business activities.

Civil procedure reform: A section of the Recovery Plan presented by the Italian Government is dedicated to the reorganisation of the justice system, with the objective of ensuring the reasonable length of trials and lawsuits through new and simplified proceedings, including by limiting pleadings and hearings and maximising the use of technology.

A draft Delegation Law requiring the Government to enact wide-ranging civil procedure reform is already being considered by the relevant parliamentary committees. The draft Delegation Law aims to improve the efficiency of civil procedure, both at first instance and on appeal, as well as reviewing the legal framework governing alternative dispute resolution methods.

Luxembourg

Arbitration: On 15 September 2020, the Luxembourg government published its draft law 7671 to modernise the Luxembourg arbitration rules. Its objective is to create a streamlined arbitration regime offering the advantages of flexibility, speediness and confidentiality, and representing a valid alternative to the local courts. The text is largely inspired by and aims at consolidating both the French procedural rules and the UNCITRAL Model Law.

Civil procedure reform: Given the rise in the number of disputes, draft law 7307 was introduced to implement a new and improved civil procedure. This project brings, amongst other changes, new deadlines for the investigation process. While this could hasten the resolution of a dispute it could also be detrimental to the parties who need to gather evidence and counter their opponent’s arguments in a now limited time period.

Class action: In anticipation of the EU directive regarding consumers rights, Luxembourg introduced draft law 7650 regarding collective redress in September 2020. When introduced, this new procedure will enable a single action to be introduced when the same trader breaches a provision of the Consumer Code affecting the interests of a group of consumers.

Protection of enterprises and modernisation of bankruptcy law: Draft law 6539 aims to reform the current legal framework by: (i) providing conservatory measures and legal instruments to prevent financially distressed companies from being declared bankrupt should their financial problems be detected at an early stage; and (ii) favouring turnaround options rather than liquidation of distressed companies.

Mainland China

PRC blocking statue: On 9 January 2021, the Ministry of Commerce People’s Republic of China (“MOFCOM”) issued the Order No. 1 of 2021 on Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation and Other Measures (the “Order”). The Order seeks to provide a framework to “counteract the impact on China caused by unjustified extra-territorial application of foreign legislation and other measures, safeguard national sovereignty, security and development interests, and protect the legitimate rights and interests of citizens, legal persons and other organisations of China”. The Order requires PRC citizens, entities and organisations to report to MOFCOM within 30 days if they are impacted by foreign sanctions that seek to impact activities with a “third State”. If MOFOCM considers the foreign sanctions involve “unjustified extra-territorial application”, it shall issue a prohibition order “to the effect that, the relevant foreign legislation and other measures are not accepted, executed, or observed”.

Netherlands

Dispute Resolution and inquiry proceedings: On 22 December 2019 the consultation period ended on a legislative proposal aimed at (i) improving access to the Dutch courts by expanding the grounds to force buy-outs by or sell-outs to co-shareholders in shareholder dispute resolution proceedings, and (ii) reducing the required stock exchange value for shareholders to request inquiry proceedings before the Dutch Enterprise Chamber to EUR 20 million for all listed companies. No legislative proposal was tabled in 2020. Further action is expected in 2021.

Climate change litigation: Judgment is expected in early 2021 in four hearings which took place in December 2020 relating to an action brought by Friends of the Earth Netherlands (“FEN”) against a major oil company. In 2019 the Dutch Supreme Court upheld a court order for the Dutch State to reduce Dutch greenhouse gas emissions by 25% by the end of 2020. FEN is claiming the oil company must make substantial reductions of its CO2 emissions or it will be violating its duty of care by knowingly undermining the world’s chances of reaching its target to reduce global warming to 1.5°C. In addition, FEN alleges the company is violating Articles 2 and 8 of the European Convention on Human Rights (the right to life and the right to family life), because it continues to contribute to climate change with its investments in fossil fuels.

Revised 2021 NAI Rules: The NAI Arbitration Rules 2015 are currently under review. The 2021 Rules are expected to be launched by 1 March 2021. The changes will include a number of progressive and forward thinking amendments to meet the increasing needs of arbitrators, counsel and parties with respect to the time efficient and cost efficient administration of cases.

Portugal

Approval of the National Strategy to Combat Corruption 2020-2024: The Portuguese Government has recently approved the National Strategy to Combat Corruption 2020-2024, which clearly identifies seven priorities to combat corruption in Portugal. This document was recently under public consultation and is currently waiting to be voted on in the Parliament.

Russia

The Ministry of Justice has proposed a new draft bill regarding mediation in Russia: The Draft Bill reforms are intended to encourage the wider use of mediation in the business community and provide for more formal procedures. The Draft Bill proposes the following main amendments: More formal requirements for mediators; new rules on mediation settlements; and the imposition of new confidentiality obligations on the mediator. Mediation will also be introduced for criminal proceedings. Despite the fact that some of the above provisions may be changed before the law is adopted, the clear intention in Russia now is to make mediation more popular and effective for business.

Singapore

Amendments to the SIAC Rules: The Singapore International Arbitration Centre (“SIAC”) is considering revisions to its arbitration rules (“SIAC Rules”) following a public consultation exercise which started in July. The amendments are expected to deal with the consolidation of claims and joinder, expedited and emergency arbitration procedures and new technology as well as keeping pace with general trends in international arbitration rules. The revised SIAC Rules are likely to be released in the third quarter of 2021.

Spain

Key amendments announced to the Civil and Criminal Procedural Laws: It is expected that during 2021 the Civil Procedural Law will be amended to increase the efficiency of the proceedings (with numerous changes in enforcement proceedings) and favor ADR methods to avoid litigation. In addition, the appeal system at the Supreme Court level will be significantly streamlined.

In relation to the Criminal Procedural Law, a complete overhaul is foreseen, being the most discussed amendment the provision of Public Prosecutors with the lead during the investigation phase in criminal proceedings.

UAE

Revised DIFC-LCIA Arbitration Rules 2021: The Dubai International Financial Centre-London Court of International Arbitration (DIFC-LCIA) Arbitration Rules 2021 entered into force on 1 January 2021. The revised rules include new provisions that promote efficiency and speed in the conduct of arbitration proceedings. Key changes include: express authority to an arbitral tribunal to decide on early dismissal of claims manifestly outside of the tribunal’s jurisdiction or that are inadmissible or manifestly without merit, and to limit pleadings and witness testimony and dispense with a hearing; extending the tribunal’s power to consolidate arbitrations and run concurrent proceedings; granting the LCIA Court itself authority to consolidate proceedings prior to the formation of an arbitral tribunal; expressly authorizing virtual hearings and electronic signing of awards; and new wording that an arbitral tribunal will “endeavour” to issue its award within three months of the last submission.

Global

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English law

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Italy

Luxembourg

Mainland China

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Singapore