Litigation Trending - Ten predictions for 2022

It's that time of year again! As January swings around once more and 2021 already seems a distant memory, Ashurst's Commercial Litigation team has come up with their ten predictions for litigation trends in 2022. And this year, there's the added bonus of a glimpse into 2023…

1.  Lugano or Luga-yes?

A big question for 2022 is whether or not the European Council will vote in favour of the UK acceding to the Lugano Convention, which deals with issues of jurisdiction and enforcement of judgments across EU/EFTA Member States. The UK's chances of re-joining Lugano were knocked last summer, when the European Commission recommended that the UK not be permitted to join (see our briefing). 

There is a glimmer of hope, as the European Commission has separately recommended that the EU sign up to the Hague Judgments Convention 2019 (HJC), which is designed to provide a framework for the enforcement of judgments across different jurisdictions. If both the EU and the UK sign up to the HJC, it could help to facilitate the enforcement of judgments. That being said, the HJC will not come into force for any state until 12 months after ratification and it won't apply unless proceedings were commenced after the Convention was in force for both states. We anticipate that uncertainty around jurisdiction issues will continue in 2022.

2.  ADR no longer an alternative?

During 2021, the Master of the Rolls, Sir Geoffrey Vos, set out his vision for the future of dispute resolution: a streamlined online court process for the majority of civil cases. A key part of this vision is for ADR to no longer be regarded as "alternative". Mediated interventions should, in his opinion, be fully integrated into the process and Judges should not just "referee" a fight but "break it up".¹

However, not all disputing parties will want to play nice and may refuse mediated intervention: Vos's response is mandatory ADR. The Civil Justice Council is looking at when compulsory ADR will be appropriate and how it should be implemented. 

We don’t expect to see fully online integrated court processes by the end of 2022, but we do expect the courts to follow the "direction of travel" with regard to mandatory ADR. This was already evident at the end of 2021 when a High Court Master reportedly made an order for compulsory mediation in a high value case.²

3.  Disclosure Pilot in holding pattern

2021 saw changes to the Disclosure Pilot with new rules, aimed at streamlining the disclosure process and creating a simpler regime for less complex claims, which came into force in November. The Disclosure Pilot has been extended to 31 December 2022. This year will likely see further consultation in order to assess whether the pilot has actually saved costs or increased them, with a view to finalising the disclosure rules. We think that it is unlikely that the pilot will be extended again and given the work that has gone into the pilot we would be surprised if the current rules were dropped.

4.  2022: The year of the carriage dispute

2021 was the year of collective proceedings order (CPO) applications. In October 2021, we commented on a trend of collective proceedings spurred on by claimant-friendly judgments in Merricks v Mastercard, Le Patourel v BT and the two Gutmann claims in the Boundary Fares litigation. As we predicted, that trend continues with a further (third) CPO application issued by Mr Gutmann in late November 2021, making a total of six new CPO applications issued in 2021.

With the proliferation of collective proceedings comes the risk that the same class of claimants (or some of them) will be the subject of different, competing claims. When this happens, a dispute may arise as to which set of proceedings should have carriage of the duplicated claimant class(es): this is known as a 'carriage dispute'.

Carriage disputes are a common feature of mature class-action type regimes (e.g. the United States, Canada, Australia), but are not an issue which English courts have had to address thus far. This is about to change with two cases currently before the Competition Appeal Tribunal which present the risk of a carriage dispute. The first is comprised of Phillip Evans and Michael O'Higgins' parallel opt-out claims against a number of banks relating to Forex manipulation. The second is made up of the RHA and UKTC parallel claims arising from the Trucks Cartel. Both claims have already been heard by the CAT and judgment is expected in relatively short order.

The greater the number of collective claims issued, the greater the risk of rival opt-out claims and so, further carriage disputes. Many will be eagerly awaiting the Tribunal's forthcoming judgment in Evans/O'Higgins on this issue, which may be influential in shaping judicial attitudes in this jurisdiction as the collective proceedings regime continues to develop.

5.  Brevity is the soul of witness evidence

2021 saw the introduction of new rules on witness evidence in the Business and Property Courts, with a particular focus on brevity and a desire to reduce over-lawyering. Those rules have already come under judicial scrutiny and we expect that 2022 will likely see further commentary from the judiciary as to precisely how the new rules should be applied. Wider adoption of the rules is also likely. For example, the Competition Appeal Tribunal has now introduced its own practice direction which closely follows PD 57AC, and other courts may well follow.

6.  What now for data breach claims and the representation action procedure?

The much-anticipated judgment in Lloyd v Google was undoubtedly the big news story in the data breach sphere last year (read our briefing). Many will be watching keenly to gauge the impact of the Supreme Court's proposed alternative approach to representative actions. Of particular interest to many will be the reaction from funders, on whose support such group actions very often rely.

A number of other judgments last year show a trend in the Courts taking a more robust approach to data breach claims. Whilst this approach may be welcomed by some as providing further ammunition to fend off nuisance claims, others may instead see it as imposing restrictions on the ability of individual data subjects to seek redress for breaches affecting their personal data. Taken together with the impact of Lloyd v Google on representative actions, we predict a downturn in data breach claims this year (see our Data Protection 2021 Roundup webinar in November 2021 for more details). However, the practical limitations of the current representative action regime may strengthen calls for legislative reform in this area and this will be something to watch out for this year.

7.  Dispute Resolution funding trends

Last year was another busy year for the litigation funding market and 2022 looks set to be equally so. But, we wanted the insider's view so we invited Rosemary Ioannou, a director at Fortress Investment Group, back for another year to let us in on her predictions:

Commenting last year, I observed a marked increase in the use of dispute resolution funding by large corporates and other well-capitalised organisations. This trend has continued. Perhaps most notably the trend has evolved beyond single case funding, into sophisticated portfolio funding solutions for law firms and their corporate clients. These portfolios can be tailored to meet the specific funding requirements of law firms and their clients, making the commercial terms and speed with which funding can be deployed increasingly attractive, managing cash flows and, ultimately generating greater returns.

Group claims in the competition space are developing at pace, with certification of the claims brought against train operators and BT (both of which are funded)  in the Competition Appeal Tribunal clear evidence of this. This trend is set to continue both in the UK and across Europe, with all eyes on the Netherlands as the new Dutch collective action regime beds in.  Alongside competition claims, claims in the ESG space and broader consumer redress actions are set to grow at pace through 2022 and beyond. The VW emissions and Uber drivers claims (again, both of which are funded) are good examples of the breadth of litigation in this space, with funding providing the necessary capital for such claims to be brought.

8.  The Quincecare duty back in the spotlight

Of the many cases pending before the appeal courts in 2022, two caught our eye – both concerning the Quincecare duty. The Quincecare duty² requires a bank to refrain from executing a customer's instructions if the bank has reasonable grounds for believing that those instructions may be an attempt to misappropriate the customers' funds. Once rarely used, there has been a spate of cases over the past three years which have brought it back into the spotlight, raising some concerns amongst financial institutions that this would lead to an avalanche of decisions against them. To date, with the exception of the 2019 Supreme Court judgment in Singularis v Daiwa⁴, this has not yet been the case. These upcoming cases will therefore be of particular interest to financial institutions. 

First, Stanford International Bank Ltd v HSBC Bank plc⁵. This is a claim brought by the liquidators of Stanford International Bank, an investment bank involved in a Ponzi scheme, against HSBC. The liquidators argue that HSBC breached its duty and failed to check money was being properly paid out from its accounts. The appeal is awaiting a hearing by the Supreme Court.

Second, Philipp v Barclays Bank UK plc⁶. This is a claim brought by Mrs Philipp, who was the subject of APP fraud, against her bank (see our briefing on the High Court decision). Mrs Philipp alleges a breach of the Quincecare duty by the bank. The High Court ruled that the duty did not extend to protecting the claimant from her own actions where no suspicious circumstances had preceded the instructions. The outcome of Mrs Philipp's appeal is likely to be of interest to financial institutions with retail customers. The appeal is due to be heard by the Court of Appeal on 8 or 9 February 2022.

Looking further afield: an eye on 2023

Looking further afield, 2022 will likely see the groundwork laid for two significant legal changes in 2023. 

9.  Changes to procurement rules

First, procurement. The Government has now published the response to its consultation on procurement changes, and the proposals are due to take effect in 2023. You can read more about what is happening in our briefing, but the impact on tenderers and contracting authorities could be significant. From a litigation perspective, however, the proposed cap on damages will not be implemented.

10.  Judicial Review and Courts Bill

Second, judicial review. The Judicial Review and Courts Bill is currently making its way through Parliament and will likely see significant news coverage in the early part of 2022. Whilst any changes will come into force in 2022, the reforms will not likely be tested in the courts until 2023. Before that, though, the first judicial review of the Government's post-Brexit trade policy will be heard in February.

Authors: Jon Gale (Partner), Sophie Law (Senior Associate), Tim West (Senior Associate), Max Strasberg (Senior Associate), Aaron Marchant (Solicitor), Catrin Southgate (Solicitor)

1. Comments made in his speech Mediated interventions within the Court Dispute Resolution Process, Dublin Oct 2021.
2. As reported in LegalFutures: High Court makes “first” compulsory ADR order in commercial case, 15 Dec 2021.
3. Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363
4. [2019] UKSC 50
5. On appeal from the Court of Appeal: [2021] EWCA Civ 535
6. On appeal from the High Court: [2021] EWHC 10 (Comm)