Edward Fennell’s LEGAL DIARY

Diary news plus insights, commentary and appointments from the legal world

2 August 2024

Editorial contact: fennell.edward@yahoo.com

SHORT THOUGHT FOR THE WEEK: Lessons from History

Students of the history of rioting might will be struck by the parallels between what has been happening this week and events of two hundred years ago (Autumn 1830) in the Captain Swing Riots which flared viciously across all the southern counties. Then, what might be regarded as genuine grievances or concerns, exploded into mindless violence on a mass scale with the burning of farms, the destruction of agricultural machinery and countless acts of intimidation.

Subsequently there were mass trials and numerous death sentences and transportations. A key issue became who were the leaders and how should they be punished. “The law delights not in punishment; the object of the law is the prevention, rather than the punishment, of crime,” said the lead judge, Baron Vaughan, in one of his death sentence speeches. “And therefore it is that we have passed many anxious hours in examining the evidence as it affects each of your cases, for the purpose of enabling us to discriminate the degree of guilt which is affixed to each of you. … Those who are the first and foremost in an aggression of the laws, must expect to be made first. and foremost in the punishment; and such, after a close investigation into your cases, we find you to have been.”

No death sentences are likely after the current batch of riots – nor even transportation to Tasmania – but how the law deals out justice will be fascinating to observe.

The LegalDiarist

In this edition

+ LEGAL DIARY OF THE WEEK

– Helping Juries Come to Better Verdicts

– Field Alert! It’s Dangerous Out There

– Stevens & Bolton LLP Delivers the Goods

– PII Fears Unfounded

+ CONTRIBUTED ARTICLES OF THE WEEK

What the EU AI Act means for businesses operating within the EU and beyond, explains Jonathan Armstrong

The European AI Act risks stalling innovation, says Denas Grybauskas

+ LEGAL COMMENT OF THE WEEK

on the EU AI Act, the Assisted Dying Bill, Kyle Walker’s case, the new Labour planning regime, Non Doms.

+ APPOINTMENTS OF THE WEEK

at Boodle Hatfield

LEGAL DIARY OF THE WEEK

Helping Juries Come to Better Verdicts

With new questions being raised about the safety of Jeremy Bamber’s conviction (going back 40 years!) it is highly topical that according to a new book How Juries Work: And How They Could Work Better (OUP) there are “systemic weaknesses” in the way juries make decisions – and these are ‘likely to be contributing to the conviction of innocent people, failures to convict the guilty, and inequalities’.

According to new research the current legal rules involving procedure and evidence are not consistently designed based on robust evidence about how the juries make decisions – but the system could be reformed to function better.

“The procedure surrounding the modern jury is, in many ways, still grounded in common-sense and in tradition from as far back as the 1200s,” comments Dr Rebecca Helm, from the University of Exeter, who undertook the research. “However, today we have the knowledge and the data to allow us to design procedure to help the jury convict the guilty and acquit the innocent, and to do so in a way that does not exacerbate inequality in the criminal justice system.  

“Jurors, as human decision-makers, utilise their own intuitions to interpret case evidence and to reach a verdict. Although these intuitions are likely to be highly effective in allowing us to function in society, they also have predictable weaknesses particularly in the legal context. For example, intuitions are likely to be misleading where they arise in the absence of sufficiently representative experience or where they arise as the result of mental shortcuts which we are all regularly influenced by.”

“Jurors are particularly likely to make sub-optimal decisions when they are considering cases involving a part of society that they are not familiar with (e.g., people from a different socio-economic group), and where evidence is ambiguous or difficult to understand.”

A key recommendation, therefore, is that widening jury diversity and ensuring that contributions of individual jurors with most relevant experience are appropriately valued has the potential to enhance the performance of the process.

Field Alert! It’s Dangerous Out There

Many of us have an idyllic view of English rural life – all peace, beauty and tranquillity and The Archers – but the hard truth is that it is the most hazardous workplace of all. According to the latest figures from the Health & Safety Executive (HSE), farming is now the most dangerous profession in the UK and specialist serious injury lawyer Lee Hart, a partner at Clarke Willmott, is leading a campaign to make the industry safer.

As Hart explains, while agriculture accounts for just 1% of the working population, 20% of all workplace deaths are in this sector. Very sadly 27 people lost their lives on farms in 2023/2024 – including two children. Meanwhile according to insurer NFU Mutual there were 937 farm accident claims in 2023/24 totalling more than £68m. Claims included those related to falls from height, trapped body parts and falling objects.

One of the most immediate concerns is the HSE’s decision to halt farm safety inspections.

“Farming is undoubtedly a dangerous profession and of course, accidents are going to happen,” says Hart. “But that aside, incidents are happening too frequently. The HSE issue helpful guidance and initiatives like Farm Safety Week are incredibly important to reduce accidents across the agriculture industry, but more needs to be done.

“It is concerning that the HSE has decided to put a stop to farm safety inspections, a decision which is likely to increase risks to the health and safety of workers in the farming sector. Whilst they will continue to investigate serious accidents or deaths, the halting of safety inspections, training and events could lead to an increase in serious injuries and lost lives.

“We need the HSE to work collaboratively with farmers to improve standards and prevent accidents occurring.”

Stevens & Bolton Delivers the Goods

James Waddell, Managing Partner

Is there challenging and satisfying legal life outside of the City? Well, the team at Guildford-based Stevens & Bolton LLP would probably say that there definitely is. The independent firm has just announced double digit growth in revenue, net profit and profit per equity partner (PEP) in the what was the firm’s 150th anniversary year. So, as the firm describes it, all is looking pretty good in the context of its continued commitment to being “A thriving independent law firm, with lawyers and business teams collaborating in one location to make a positive difference and to deliver ‘Excellence beyond the City’ for the firm’s clients, its people and the wider community”.

So while Stevens & Bolton’s roots are in Surrey this does not mean it is insular in its outlook – the firm’s international approach saw cross-border work account for over 12% of revenue across 48 different jurisdictions. Long-standing relationships with clients such as Papa John’s, Philips, Nintendo, Bunzl, Lonza, The Ardonagh Group and Samsung illustrate its reach. Significantly one of the most recent recruits to the management team is Doug Williams who joins as Chief Operating Officer having previously been at DLA Piper where he was International Head of Operations.

“We see strength in our full-service legal offering, our national and international outlook and in our all-equity partnership model,” said James Waddell, Managing Partner. “I am confident that by always improving, evolving and challenging ourselves to do better, we will continue to attract and retain clients and talented people to our firm.”

What this all goes to show is that for anyone becoming jaded by big City life there really is a future in law outside the M25

PII Worries Unfounded

Following a recent survey that large numbers of insurers are withdrawing from the solicitors’ PII markets – arising from a legal case which highlighted the ‘restrictive aggregation clauses’ in PII policies – Brian Boehmer, a Professional Indemnity Insurance Specialist and Partner at Lockton, has highlighted that ‘The point on aggregation is an incredibly important one.’

“The reality is as it stands, that due to recent case law it is abundantly clear that the insurers’ (along with most professional advisers’) understanding of the intention of the aggregation clause, is not one that is being executed by the courts,” says Boehmer . “These fairly recent cases have been great news for first excess layer insurers, but not so for primary insurers. These cases are however “outlier” events, whereby they have created losses to the primary insurers that go sideways rather than vertically. This means they are exposed to a potentially unlimited multiple of the limit of indemnity that they have provided, but of course each loss will be limited to each individual loss experienced by the end client.”

“While the results of this survey are quite alarming, the reality of what we’re seeing in the market paints a more positive picture. Given the amount of capacity in the market currently, coupled with our experience during the spring renewals and of negotiating renewal terms for clients in advance of their October renewal, we do not believe that there will be a mass exodus of insurers.”

Well that’s a relief then!

CONTRIBUTED ARTICLES OF THE WEEK

What the EU AI Act means for businesses operating within the EU and beyond

by Jonathan Armstrong

Jonathan Armstrong is a co-author of LexisNexis’ definitive work on technology law, “Managing Risk: Technology & Communications”, and a Professor at Fordham Law School, where he teaches a postgraduate course on international compliance.

He says, “It’s been a long haul for the EU to get the EU AI Act into law, but they have finally done it and the new law comes into effect on 1 August 2024, albeit with transitional provisions which mean that it won’t be in full effect immediately. It’s quite a hybrid piece of legislation based on the EU’s greatest hits – a mix of influences from previous EU laws like product safety, competition, and GDPR.

“The new Act is not perfect, and it will suffer from some of the same issues as GDPR. There’s likely to be under-resourced regulators, patchy enforcement, and a struggle to keep up with innovation. However, it has already changed the thinking around AI risks and responsibilities both in the EU and further afield.

The EU claims it is the first-ever comprehensive legal framework on AI worldwide. However, it is important to note that before the EU AI Act, AI was not unregulated in the EU. The world of AI isn’t the Wild West.

Previous enforcement actions under GDPR include the Italian Data Protection Authority’s ban on the ReplikaAI chatbot, Google’s temporary suspension of its Bard AI tool rollout after Irish data watchdog intervention, Italian DPA fines for Deliveroo over AI algorithm use, and Clearview AI fines under GDPR, including from the Italian, French & Greek DPAs.

How can businesses ensure they comply?

“Preparation now is key. Organisations should assess their current use and planned use of AI systems. Conduct a compliance gap analysis and identify affected business areas.”

Building a bespoke Action Plan is essential. This includes training employees, raising awareness, and briefing boards on AI risks and opportunities. Board training is especially important – many boards just don’t have AI and technology skills on their current board. They’ll need to fix this to understand the risks and opportunities with AI. Opting out of AI isn’t an option either. Knowledge will be important.

Organisations need to take an inventory of their current AI systems to identify what AI systems are being used and their risk level. Additionally, drafting and amending internal policies and procedures on AI compliance, such as updating data breach plans to include EU AI Act reporting, is essential.

Preparing materials and notices to inform your customers of your AI use to meet transparency and other legal obligations, creating templates for required documents under the EU AI Act, and suggesting standardised clauses or addendums to add to your client and supplier agreements are also recommended steps. Legal advice is recommended to ensure all steps are covered.

How will UK businesses be affected?

The UK government’s position on AI regulation has evolved, with the Labour Government’s recent King’s Speech indicating plans for new AI legislation. This includes setting up a Regulatory Innovation Office to support existing regulators. The new law might be a simplified version of the EU AI Act.

Also, we shouldn’t expect the UK Government to wait and see what happens with EU enforcement when the EU AI Act comes fully into force. With capable people in government who understand AI, a willingness to regulate, and a healthy majority to get things done, the new government might move more quickly.

Jonathan Armstrong is a Partner at Punter Southall Lawand the co-author of LexisNexis’ definitive work on technology law, “Managing Risk: Technology & Communications”. He is a Professor at Fordham Law School, where he teaches a postgraduate course on international compliance.

The European AI Act risks stalling innovation, says Denas Grybauskas

In March of this year the European Parliament adopted the Artificial Intelligence Act, the world’s first comprehensive horizontal legal framework for AI. The intention of this groundbreaking act is to safeguard fundamental rights, democracy and environmental stability from the surge of high-risk AI. As the AI Act comes into force, however, the main business challenges will be uncertainty in its first years. Various institutions, including the AI office, courts, and other regulatory bodies, will need time to adjust their positions and interpret the letter of the law. During this period, businesses will have to operate in a partial unknown, lacking clear answers if the compliance measures, they put in place are solid enough.

One business compliance risk that is not being discussed lies in the fact that the AI Act will affect not only firms that directly deal with AI technologies but the wider tech community as well. Currently, the AI Act lays down explicit requirements and limitations that target providers (i.e., developers), deployers (i.e., users), importers, and distributors of artificial intelligence systems and applications. However, some of these provisions might also bring indirect liability to the third parties participating in the AI supply chain, such as data collection companies.

Most AI systems today are based on machine learning models that require an abundance of data for training to ensure that the model has an adequate contextual understanding, is not outrightly biased, and does not ‘hallucinate’ its outputs. Today, AI developers are looking for ways to scrape as much publicly available web data as possible. Although the AI Act does not target data-as-a-service (DaaS) companies and web scraping providers, these firms might indirectly inherit certain ethical and legal obligations.

A prime example is web scraping companies based in the EU who will have to ensure they do not supply data to firms developing prohibited AI systems. If a company willingly cooperates with an AI firm that, under EU regulation, is breaking the law, such cooperation might bring legal liability. Moreover, web scraping providers will need to install robust know-your-customer (KYC) procedures to ensure their infrastructure is used ethically and lawfully, ensuring an AI firm is collecting only the data they are allowed to collect, not copyright-protected information.

Another broad compliance-related risk that I can foresee comes from the decision to grant some exemptions under the AI Act for systems based on free and open-source licences.There is no consolidated, single definition of ‘open-source AI’ and it is unclear how the widely defined open-source model might be applied to AI. This situation has already resulted in companies falsely branding their systems as ‘open-source AI’ for marketing purposes. Without clear definitions, even bigger risks will manifest if businesses start abusing the term to win legal exemptions.

The AI Act has the potential to establish trust across the industry but may also be detrimental to innovation across the technology industry. Organisations must be on their toes, as they may face penalties in the millions for severe violations involving high-risk AI systems.

Denas Grybauskas is Head of Legal at Oxylabs

LEGAL COMMENT OF THE WEEK

TOPIC: The EU AI Act

COMMENT BY: Jason Raeburn, Intellectual Property and Technology Litigation Partner, Paul Hastings

“Now that the EU AI Act has come into force, UK tech firms need to be geared up for change. The Act will require businesses to have an in-depth understanding of its regulatory requirements and be primed and ready for implementation – especially for those aiming to scale up to a global market.

“Given its ‘extraterritorial effect’, compliance will be mandatory for many UK AI systems, including those with outputs utilised by users in the EU, which means firms will be required to make significant investment in compliance measures (and engineering changes) to avoid hefty penalties.

“Due to the broad scope of the EU’s regulation, UK tech businesses will inevitably face friction as the Act comes into force, especially for those involved in high-risk AI applications.

“The Act’s risk-based approach means that higher-risk AI systems will encounter more rigorous compliance demands, with severe penalties for non-compliance. For UK tech firms, this will likely have a huge impact on operations and strategic planning.”

TOPIC: Lord Falconer’s Assisted Dying Bill: Ethical Commentary

COMMENT BY: Professor Iain Brassington, The University of Manchester

“As a Private Members’ Bill, this does not enjoy government support – but, importantly, neither has the government taken a stance against it.  And the public mood, perhaps shaped by high-profile campaigns in the media, is much more amenable to the idea of assisted dying for at least some adults than it has been in the past.

Unlike many previous attempts to legalise or decriminalise assisted dying in the UK, there is no requirement that the person whose life will end be suffering from their condition: all that matters is that they are terminally ill.This is to be welcomed, since means that agents can seek assistance to die in order to avoid suffering, and therefore avoids the charge that – by forcing people to suffer – the proposals are inhumane.

On the other hand, someone who finds his life to be burdensome but who is not expected to die from a medical condition will still have no recourse to assistance.  Thus someone who is suffering terribly from an injury and who has no prospect of that suffering ending would not be able to seek assistance under this proposed law.

Neither would a person who is terminally ill but who – for whatever reason – is unable to administer the means to their own death be covered by its provisions; §4(4) states that the “final act” of administering the life-ending medication must be made by the person whose life will end (although §4(4)(c) allows an attendant to assist the patient up until that final act: one may predict some very fine-grained wrangling about how one differentiates the final from the penultimate act).

This represents a very strong set of claims about personal autonomy; however, it is not at all clear whether any jury would convict a person whose actions were motivated by a desire that someone remain alive; neither is it clear whether the public interest would ever be served by a prosecution being brought in the first place.”

TOPIC: The England footballer Kyle Walker’s battle in the family court with his former mistress, Lauryn Goodman, over child maintenance payments.

COMMENT BY: Lesley Smythe, family lawyer and partner, Lowry Legal

“The centre of this case – as it is in all similar claims under the Children Act – is the true needs of the children. The court has criticized Lauryn Goodman who has been found to have deliberately exaggerated her claims for her own benefit. This is not what the financial provision under the Children Act is for.

“From the comments the mother has made, it is clear she has been motivated by wanting to hurt the father and his wife. I strongly advise clients against using children as weapons in legal disputes – a stance that the vast majority of family lawyers would agree with.

“Kyle Walker isn’t an open cheque book, as he has said in evidence. He has four other children who are financially dependent upon him as well. The court will have taken this into account when weighing up its decision.

“It is clear that given the sums of money the father has already paid, and the fact that he already supports his older child with Ms Goodman, that he accepted his responsibility. The house that he has paid for will revert to him once the youngest child is 18, as per the law.

“Lauryn Goodman didn’t get what she wanted and the judgment is very critical of her. There is a potential for an application for costs to be made against her given her unreasonable stance.”

TOPIC: The New Labour Government’s proposed reforms to the National Planning Policy Framework and other changes to the planning system

COMMENT BY: Ben Standing, Partner specialising in planning and environmental law, Browne Jacobson

“It’s welcoming to see the new Government waste no time in unveiling its plans for reforming the planning system, but it must ensure it works in close collaboration with the local authorities that will execute this new regime, rather than forcing something on them.

“The proposals point to a whole-system upheaval, but it must also consider whether any system can function effectively without the necessary people and skills, which are in high demand in local government due to insufficient funding over a prolonged period.

“Time and again, we hear from local planning authorities that they are having to consider the merits of large, complex developments that require specific expertise to handle a wide range of planning and legal issues.

“Their inability to call upon this resource is bringing the planning system to a gridlock and prevents councils from regularly updating local plans, which is why only a third have a plan that is under five years old.

“We would therefore urge the Government to tackle this issue in co-ordination with its proposed revision of the National Planning Policy Framework (NPPF). We would like to see new funding announced for local authorities and a focus on accessing the necessary training. Perhaps a dedicated central resource of specific skills could be made available.  

“The combination of more resource, along with an NPPF that clearly sets priorities for specific issues, should allow the planning system to be quicker and more consistent in its outcomes.”

“Increasing the housing targets combined with pressure to produce new local plans should result in more housing allocated sites. Allocated sites ought to have an easier ride through the planning system, meaning increased certainty.

“But if local plans are not updated there will be disconnect between the allocation housing numbers in the out-of-date local plans and the new mandated targets. That will encourage developers to appeal planning refusals.

“Identifying sites for allocation will put pressure on recipient local communities and the green belt, so increasing the housing targets will be controversial.

“Increasing the affordable housing targets is welcome where there is a shortage of affordable homes. However the right balance needs to be struck. The existing model requires these are sold to registered providers of social housing at a discount from market rates. These so called ‘section 106 units’ are part of the ‘planning gain’ arising from the grant of planning permission. Sharing that planning gain is a zero sum game: if affordable housing increases, what will suffer? Contributions to fund education or infrastructure? The land owner’s uplift? A reduction in developer’s profit would be a poor outcome if that resulted in otherwise viable housing schemes not coming forward.”

TOPIC: The New Labour Government’s proposed reforms to the National Planning Policy Framework and other changes to the planning system

COMMENT BY: Ben Standing, Partner in planning and environmental law, Browne Jacobson

“It’s welcoming to see the new Government waste no time in unveiling its plans for reforming the planning system, but it must ensure it works in close collaboration with the local authorities that will execute this new regime, rather than forcing something on them.

“The proposals point to a whole-system upheaval, but it must also consider whether any system can function effectively without the necessary people and skills, which are in high demand in local government due to insufficient funding over a prolonged period.

“Time and again, we hear from local planning authorities that they are having to consider the merits of large, complex developments that require specific expertise to handle a wide range of planning and legal issues.

“Their inability to call upon this resource is bringing the planning system to a gridlock and prevents councils from regularly updating local plans, which is why only a third have a plan that is under five years old.

“We would therefore urge the Government to tackle this issue in co-ordination with its proposed revision of the National Planning Policy Framework (NPPF). We would like to see new funding announced for local authorities and a focus on accessing the necessary training. Perhaps a dedicated central resource of specific skills could be made available.  

“The combination of more resource, along with an NPPF that clearly sets priorities for specific issues, should allow the planning system to be quicker and more consistent in its outcomes.”

TOPIC: Labour’s new policy on non-doms and the IHT protections offered by excluded property trusts being ditched

COMMENT BY: Basil Dixon, Partner at Payne Hicks Beach

“They have only been in power for three weeks, but Rachel Reeves has just fired the starting gun for what promises to be a hectic 9 months of decision-making and planning for non-doms, who have been in a state of anxious limbo since Jeremy Hunt called time on the non-dom regime last March. The policy paper published on 29 July gives the first proper indication of what the new regime will look like under Labour and whilst we will have to wait until the Autumn Budget for the detail, it looks like much of the Conservative plan has been retained but with certain key elements have been tightened-up. MOST significantly, as rumoured, Labour are ditching the IHT protections offered by excluded property trusts with this move looking set to cause consternation in the non-dom community, which is already deeply concerned about the expansion of the IHT regime to keep people in scope for ten years after leaving the UK. Unprecedented numbers of non-doms have been looking at leaving the UK. Labour is gambling that they will not. We are about to find out if that call is correct. One thing is for sure though, with only 9 months to make decisions, non-doms need to start planning now. Time and good advice will be at an absolute premium and waiting until the Autumn to get going may be a decision that people end up living to regret.”

APPOINTMENT OF THE WEEK

Boodle Hatfield

William Rollin (left) has joined Boodle Hatfield as a Partner in its Family & Divorce practice. Previously with Charles Russell Speechlys, Rollin’s practice covers all areas of matrimonial finance and family law, including resolving relationship breakdowns and proceedings in relation to private children matters. He is described as ‘an experienced and robust litigator, adept at pulling together the right team to ensure that the process generates the best outcome for his client’.

Rollin is particularly interested in complex financial issues and arrangements in respect of pensions and has significant experience in advising on matters where which involve personality disorders and / or illnesses including addiction. He is a trained and committed advocate of the benefits of the Collaborative Process, along with other forms of dispute resolution such as hybrid mediation, Private Financial Dispute Resolution appointments and arbitration.

“I am thrilled to be joining a firm with such an outstanding reputation, heritage and dynamic client base,” says Rollin. “It is an exciting time as the demand for high quality, international family law is growing. The team is strongly positioned to meet the ever-changing needs of our sophisticated client base.”

We hope that you have found this edition of the LEGAL DIARY interesting (and even useful). If so, please circulate it to colleagues.

In any case, please continue sending your diary-type stories, legal comment and insights plus latest appointments to fennell.edward@yahoo.com

And over the weekend let’s hope for MORE Medals and LESS Riots.