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

18 October 2024

Editorial contact: fennell.edward@yahoo.com

SHORT THOUGHT FOR THE WEEK: China Crisis

David Lammy arrives in China today for what is billed as hard talk over a range of contentious issues. Yet the see-sawing between the wish to confront and the desire to cuddle-up to Beijing is a balancing act increasingly difficult to maintain.

Meanwhile, Western law firms are starting to pack up and move out. The announcement that Skadden is to close in Shanghai and make cuts elsewhere is a clear indicator that the era of ‘onwards and upwards’ for China practices has come to an end. Obviously nothing like as seismic as Russia but nonetheless a sign that, after a couple of decades of Western law firms hoping they could make loadsamoney out of the former communist bloc, the trend is now seriously in reverse.

Yet neither China nor Russia have gone away. There may be a delay but the next iteration in the relationship with the two countries – from a corporate law perspective – awaits down the road. Whether lawyer Lammy will contribute anything to it remains to be seen.

The LegalDiarist

In this edition

+ LEGAL DIARY OF THE WEEK

– Play to the Whistle

– Birketts’ Big Breaks

– There’s a Welcome in the Valleys for AI

– No BrAIner

+ CONTRIBUTED ARTICLES OF THE WEEK

Money or Your Life? US Associates now choose life explains Tom Hanlon

Developments in Cybersecurity Regulation for Businesses Operating in the EU and UK by Jonathan Armstrong

+ LEGAL COMMENT OF THE WEEK

on the On-line Safety Act, transparency at Grindr, extending magistrates’ sentencing powers and school bans on smartphones.

+ APPOINTMENT OF THE WEEK

at Burlington

LEGAL DIARY OF THE WEEK

Attend to the Whistle

Next Monday marks the start of Whistleblowing Awareness Week and the tenth anniversary of the setting up of WhistleblowersUK. It is a topic which warrants relentless discussion because it asks questions about what kind of society we are – or want to be.

WhistleblowersUK is a not-for-profit organisation which provides information and assistance to over 3,000 individuals and organisations and is vocal in its demand for the reform of whistleblowing law. In particualr it is calling for calling for the introduction of an Office of the Whistleblower.

Significantly there is support for the idea from the All-Party Parliamentary Group for Whistleblowing as well as many independent sponsors and supporters. And to widen awareness and extend the debate there will be seminars, talks and receptions in Westminster along with with support and sponsorship from a range of MPs and other key figures.

“Protecting those who have the courage to speak out about fraud and wrongdoing is the right thing to do,” said Jo Gideon, Chair of Whistleblowers UK. “A duty of candour is only enforceable with the introduction of an Office of the Whistleblower. The time to introduce a Whistleblowing Bill is now if we are to avoid future miscarriages of justice such as Hillsborough, the Horizon scandal or the contaminated blood scandal. Our whistleblowing awareness week highlights the urgent need for legislative change.”

Georgina Hallford-Hall, CEO of Whistleblowers UK, added that, “Whistleblowing should be part of the DNA of our society. It is time to put an end to the culture that allows unscrupulous organisations and lawyers to put reputation above responsibility.  It’s time to normalise speaking up, investigate wrongdoing, and hold those responsible to account, and ban the use of Non Disclosure Agreements to silence whistleblowers.”

It may be that – given so many recent covered-up scandals – we might be heading towards a crucial moment in the status of whistleblowing.

You can contact Georgina Halford-Hall, WhistleblowersUK at 07860963947

Birketts’ Big Breaks

Birketts, the UK Top 50 London, East Anglia and Kent firm (plus a nod to the West in Bristol) is on something of a roll award-wise at the moment and chalking up the points like a top snooker player with a succession of cannons.

It all started at the end of last month when it claimed successfully the Norfolk and Norwich Law Society Excellence Award for its commitment to equality, diversity and inclusion. “It is so encouraging to see that the firm’s initiatives are bearing fruit and making a huge difference,” said Bernadette Baker, Chair of Birketts’ People and Culture Committee. “We set ourselves ambitious targets when it comes to being an inclusive law firm and we will continue to do so.” 

From there it was a move round the table to scoop the Contentious Wills & Probate Team of the Year – Boutique at The British Wills & Probate Awards. And after that it was just a short step to the Social Care Top 30 ceremony where it won the Legal Services Award.

Of course you can’t win them all and the firm had to be content with lots of nominations but no trophies at Central & East Dealmakers Awards 2024. Still , a very good try and as we all know ‘Who Dares Wins’ (in the end, anyway). Next stop the ‘Silver Circle’?

There’s A Welcome in the Valleys for AI

Is AI going to be the saviour of the UK’s legal system? If it’s not then someone needs to come up with some other bright idea pretty quickly. Already in Wales the Counsel General, Julie James, has committed herself to technology. In her keynote address to the Legal Wales Conference in Pembrokeshire recently she called on the profession to be ‘part of the conversation’ about the future of the justice system with the use of new technologies ‘welcomed across the sector’.

“We need to find efficiencies in how we do justice. We need it to be quicker – without losing its core strength of fairness. Practices need to embrace technology and keep pace with changes in how the world does business. One thing I am particularly keen to see is practices and individuals not seeing each other as competitors but working collaboratively in the interests of justice.”

James indicated her ‘intention’ to work with ‘other governments and agencies’ to explore the power of AI to help people engage with and understand the law so they can find the right answers to real life situations.

So does that mean making AI available to the public to handle the bread-and-butter legal issues which many people have to face ? In short, is the James’ vision that an ‘AI lawyer‘ would become the first port of call for many basic legal queries?

“The law is the glue that holds a society together,” said James. “It is an expression of our common agreement to support each other – the very foundations of a stable democratic society. It is how we try to keep things fair, ordered, predictable. And yes, it can and should protect our most vulnerable. But it should apply universally to all, from poorest to richest.”

Sounds like an AI siren call to by-pass the lawyer.

No BrAIner

Talking about AI (and indeed by-passing the lawyer) earlier this month LexisNexis® Legal & Professional launched LexisNexis® TechDiscovery, an AI-powered tool designed to simplify patent research. Apparently this makes patent searches fast and intuitive, allowing both IP experts and business partners to find relevant patents using simple inputs.

You can see where this is going immediately. Talk about taking the grunt work out of the law, this is going to sweep away billions of chargeable hours at a stroke. Lawyers will be able to do searches based on single words, brief descriptions, or excerpts from patents, articles, or non-patent literature just like that. (As well, of course, as as reference patent numbers).

“LexisNexis TechDiscovery makes one of the world’s most comprehensive patent datasets accessible to everyone,” said Andrew Matuch, President for LexisNexis® Intellectual Property Solutions. “Using LexisNexis TechDiscovery, IP teams can deliver insights faster and more efficiently to support their internal stakeholders, while business partners across other functions like engineering, R&D, and business development can run quick searches to evaluate inventions, explore licensing opportunities, or assess M&A prospects—without the need to immediately involve their IP departments. The combination of AI and proven technology enhances both the accuracy and efficiency of patent research. LexisNexis TechDiscovery is just the beginning.

So is this a recipe for corporate harmony between departments who, maybe, never liked each other anyway? Or is it the starting shot of departmental civil wars over who gets to play with the AI?

CONTRIBUTED ARTICLES OF THE WEEK

Money or Your Life? US Associates now choose life explains Tom Hanlon

Everyone knows that work-life balance matters to young lawyers. According to LexisNexis, it is now the most important factor for those looking to move firms. Buchanan Law’s recent US Data Report found that almost 20 per cent of associate moves were due to lifestyle decisions.

Cemented in millennial thinking, this paradigm shift is even more prevalent among Gen Z lawyers. Post-pandemic, many young associates value lifestyle above all else – a new trend in the US. The pandemic was a major catalyst for change: people examined their priorities. The intensity of young lawyers’ working lives made their reappraisal more significant. Many concluded that law firms must rethink what work means to their employees.

Historically, ambition meant reaching partnership, and long hours were simply the means of fulfilling it. But for today’s new arrivals, enhanced lifestyle matters more.

Notably, we see more associates looking to move for that reason. The younger the lawyer, the more likely that work-life balance is their main prerequisite when choosing a firm. This phenomenon spreads beyond the US, as managing partners in London and across Europe will tell you that their young lawyers also crave a better work-life balance.

Graduates now have a fixed mindset: what can the workplace give to me, not what can I give to the workplace?

So, what can law firms do?

Money is partly to blame, as associate compensation structures are largely automatic. Tying compensation to individual performance would help with a variable bonus element, and young lawyers who choose to work more than others should know they will be rewarded. Equally, those who choose not to should know what they are missing. Firms also need to identify potential partners much earlier, as currently, many firms start assessing associates after six or seven years. Instead, they could separate people into another track after the second or third year.

So what should be the advice for candidates

Every young lawyer has ambition. But partnership ambitions are increasingly scarce. So, do not be afraid to stand out as someone who is genuinely ambitious, who wants to go above and beyond, and achieve something exceptional.

Opportunity exists to distinguish yourself from the rest: to become a partner, make money and achieve great things. You still care about lifestyle and a work-life balance; but given the opportunity, you want to stand out. If you can differentiate yourself, especially as a junior or mid-level associate, partners will notice. Inevitably, there is a huge caveat: everyone must do what best suits them.

Tom Hanlon is a director at specialist legal recruitment firm Buchanan Law

Developments in Cybersecurity Regulation for Businesses Operating in the EU and UK by Jonathan Armstrong

In the light of the recent cyberattack on Transport for London (TfL) the need for stronger cybersecurity measures is evident. As reliance on technology grows, so too does the risk of cybersecurity breaches. UK Government data revealed in April that half of all businesses (50%) experienced a cybersecurity breach or attack in the past year.

To address these threats, the EU’s second Network and Information Security Directive (NIS2) – which focusses on cybersecurity – is now coming into force this week introduces new responsibilities for businesses and governments alike.

What is NIS2?

NIS2 builds on NIS1 but seeks to rectify areas of inconsistency, and provide more specific and defined requirements and applications, while also expanding the scope and strengthening cybersecurity measures. Importantly, it introduces personal liability for senior management, a key shift from NIS1. The key aspects ofNIS2 include:

+  NIS2 applies to businesses and organisations (both public and private) categorised as ‘Essential’ or ‘Important’. Both categories have the same cybersecurity management and reporting requirements but are subject to different supervisory and penalty regimes.

+  The Directive has extra-territorial scope, meaning that a wide range of technology providers, such as cloud service providers, online marketplaces, managed service providers, and social network platforms, will be subject to NIS2 if they offer services to EU Member States, regardless of where they are established.  This will mean that many UK businesses will also have NIS2 compliance obligations.

Potential Penalties

Essential and Important entities must report any incident with significant impact on their services to a competent authority or CSIRT (Computer Security Incident Response Team) without undue delay. Failure to comply can lead to penalties, including:

• Administrative fines of up to €10 million or 2% of total worldwide annual turnover for essential entities.
•  Administrative fines of up to €7 million or 1.4% of total worldwide annual turnover for important entities.
•  Personal liability for senior management, with Member State authorities having the power to hold individuals responsible for breaches and even impose temporary bans on executives.

To conclude 

Though the UK is no longer bound to implement NIS2 following Brexit, some UK entities with business in the EU will be subject to the Directive. While the EU’s approach under NIS2 is more rigorous, UK businesses should be prepared for legislative changes that will also affect their operations. It is recommended that they seek specialist advice to ensure they fully understand how NIS2 applies to them.

Jonathan Armstrong is a Partner at Punter Southall Law

LEGAL COMMENT OF THE WEEK

TOPIC: The possibility that platforms could face large fines if they fail to comply with the Online Safety Act

COMMENT BY: Lucy Blake , Partner, Jenner & Block

“Policing the internet requires a global effort, and the UK is not alone in passing and considering new legislation.  For example, the EU adopted the Digital Services Act in 2022 which imposes compliance and transparency obligations on in-scope platforms designed to protect against the spread of illegal content and protect users’ fundamental rights. In the US, the U.S. Senate passed the Kids Online Safety Act (KOSA), which intends to create a “duty of care” requiring platforms to take reasonable steps to prevent harm to minor users, including limiting addictive features and offering the ability to opt out of personalised algorithmic recommendations. “Child online safety will continue to be a topic of interest and with countries around the world looking to legislate to tackle online harms, consistency will be key.  And, whilst noble in their intentions, the online safety laws in the UK, EU, U.S. (and elsewhere) have been criticised for a lack of clarity and specificity as to the obligations on platforms, leading to a risk that companies may limit free speech by over-moderating.  

“Content moderation and platform governance decisions require a complex and fine balance between users’ rights to free speech, privacy and safety.  As well as consistency, global companies need tangible and actionable direction to help them navigate their legal requirements.”

TOPIC: The demand that Grindr should provide greater transparency over how it will protect user data while developing its AI capabilities

COMMENT BY: Chaya Hanoomanjee, Managing Director, Austen Hays

“A UK class action against Grindr with a potential 15,000 claimants has demanded the app provide greater transparency over its plans to use and process private data in developing its AI ‘wingman’ functionality.

“Grindr has historically failed to safeguard its users’ privacy,” said the class action against Grindr earlier this year. Now it plans to place user data at greater risk by developing AI chatbots that will potentially be trained on everything from a user’s preferences to their private conversations.

“So far, Grindr has failed to recognise its past mistakes, despite several regulatory and court findings. Since the claim was announced in April 2024, the potential number of claimants has risen from 650 to more than 15,000. According to the claim, Grindr shared users’ personal and sensitive data – including highly sensitive information such as HIV status – without user consent.

A recent ruling by the Court of Justice for the European Union against another social media platform found that data relating to someone’s sexual orientation, race or ethnicity, or health status are classed as sensitive, and therefore carry strict requirements for processing under EU data protection law.”

TOPIC: The proposal to ban smartphones in schools in England by law, through a Safer Phones Bill.

COMMENT BY: Ane Vernon, Partner, Payne Hicks Beach 

“The increased debate to ban mobile phones in schools comes shortly after the DfE’s new guidance earlier this year.  This encouraged schools to ban phones at school, but left it to individual schools to create their own policies.  

No-one denies the potential for harm caused by excessive phone use or the risk easy access to inappropriate or harmful online content poses. I see many examples where phones and easy access to social media apps contribute or cause to serious misconduct issues at school – bullying, sexting or circulation of inappropriate conduct are rife.

However one needs to remember that phones are also used for safety on the way to and from school, they are a device used for learning tasks (especially in cases of limited access to libraries/ access to search engines) and also to help with educational needs, for medical reasons (e.g. diabetes monitoring), religious reasons or because of a child’s situation at home (e.g young carers).  In discussing proposed legislation to ban phones from schools these considerations should not be overlooked.

In practical terms a parent-led ban needs buy-in from the school to be effective and enforceable.  To this end, policies need to capture transparently and precisely what is allowed and what is not, and enforcing of the rules need to be consistent.   Additional powers to Ofcom, as proposed may be a welcome new regulatory oversight, but any system is only as good as it can be enforced.  Ultimately, schools and parents must continue to educate children on online safety and responsible use of phones and any device providing access to online content. Any legislation or regulatory power will operate more effectively if the underlying rationale is widely understood and supported.” 

TOPIC: The extension of Magistrates’ sentencing powers

COMMENT BY: David Bowles, RSPCA Head of Public Affairs

“We all want to see the system deliver justice, including for animals, as quickly and efficiently as possible. This is a welcome move that will empower magistrates to give tougher sentences for some of the worst cases of animal abuse they hear about. In aiming to clear court backlogs, this move may also mean many of the animals we have in our care while cases progress could ultimately be rehomed to loving new owners sooner.”

APPOINTMENT OF THE WEEK

BURLINGTONS

Leonard Scudder (left) has been appointed as Head of Litigation at Burlingtons. Previously a Dispute Resolution Partner at Knights he also had experience as a Partner at Berkeley Rowe where he was particularly involved in dealing with arbitration and insolvency work at the Dubai International Financial Centre.

With a strong track record of winning cases for claimants and defendants using innovative strategies to meet clients’ objectives and expectations, Scudder is widely recognised for his work in obtaining urgent injunctive relief across all sectors. Meanwhile, over the past decade he has has been involved in many high-profile matters, representing UHNW individuals, businesses and start-ups, both in the UK and internationally, across a wide variety of sectors ranging from the music industry to oil and gas.

“We are so pleased to welcome Leonard to Burlingtons,” said Deborah Mills, the Senior Partner and Owner of Burlingtons. “He brings such broad expertise in litigation matters and will undoubtedly prove a vital component of our cross-disciplinary offering to individuals and businesses.”

It is expected that Scudder will enhance the firm’s capabilities in commercial litigation, reputation protection, and international arbitration.

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