Insights

Compensation claims for data breaches have become increasingly common in the UK in recent years. However, 2021 may come to be seen as a turning of the tide, as the English Courts made a number of decisions that will substantially reduce the scope of such claims and/or make them less attractive to funders. This alert looks at a few such decisions and their potential consequences.

The last two years have seen three landmark decisions of the UK Supreme Court on arbitration agreements and procedure. This alert summarizes those decisions and their implications.

Compensation claims for data breaches have become increasingly common in the UK, and are often issued in the High Court (Media and Communications List). However, the High Court’s recent judgment in Warren v DSG Retail Ltd [2021] EWHC 2168 (QB) may signal a reversal of that trend. At the very least, unless reversed on appeal, the decision will substantially reduce the scope of many such claims.

On the 28 June 2021, the European Union (EU) adopted two adequacy decisions which permit the free flow of personal data from the EU and the European Economic Area (EEA) to the UK. The adequacy decisions are given under the EU General Data Protection Regulation (GDPR) and Law Enforcement Directive (LED), and include the EU’s assessment of the UK’s data protection standards. The decisions are necessary because EU data protection law limits transfers to a third country (the UK became a third country as a result of Brexit), and under the EU – UK Trade Cooperation Agreement the transition period was due to expire on the 30 June 2021.

On June 4, 2021, the European Commission (EC) issued its long-awaited updated standard contractual clauses (SCCs).  The publication of the SCCs is an important moment for the global business community because they allow companies to meet the requirements of the European General Data Protection Regulation (GDPR) when transferring personal data from the European Union (EU) to non-EU countries.

On 5 February 2021, the U.K. Supreme Court unanimously ruled that the Serious Fraud Office (SFO) does not have the power to compel a foreign company that has no registered office or fixed place of business in the U.K. to produce documents held outside the U.K. under section 2(3) Criminal Justice Act 1987 (CJA). This means that where the parent of a U.K. company is a foreign company which has no presence in the U.K., the SFO will not be able to require it to produce documents held outside the U.K. even if those documents are sought in connection with an investigation relating to its U.K. subsidiary. The decision may act as a brake on the SFO’s powers of investigation at a time when fraud is increasingly cross-border and the alternative routes for gathering evidence are slower and more cumbersome.

In this alert we briefly address the impact of Brexit on jurisdiction and governing law clauses in commercial contracts.

Shortly after its important decision on the governing law of arbitration agreements in Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38 (as covered in our recent alert here), the U.K. Supreme Court has handed down another judgment long awaited by arbitration participants and practitioners – namely, Halliburton Company v Chubb Bermuda Insurance Ltd [2020] UKSC 48, which is set to become the leading authority on arbitrators’ duties of impartiality and disclosure. 

The London Court of International Arbitration (the LCIA) released an update to its Arbitration Rules, which took effect on October 1, 2020 (the 2020 Rules). While the LCIA has characterised the 2020 Rules as a “light touch”1 update on the 2014 edition of the rules (the 2014 Rules), there are some notable developments which bring the 2020 Rules in line with modern practice and other institutions’ rules.

Last week was another important week for privacy professionals: the European Data Protection Board (EDPB) issued its long-awaited recommendations on the so-called “supplementary measures” together with recommendations on the European Essential Guarantees for surveillance measures. Not to be outdone, the European Commission (EC) issued its even-longer-awaited updated standard contractual clauses. The first and third document are open for feedback until November 30, 2020, and December 10, 2020, respectively.

In a landmark decision set to become the leading authority on the governing law of arbitration agreements, the U.K. Supreme Court recently handed down judgment in Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38. The judgment brings some much-needed certainty on how English courts will determine the law applicable to arbitration agreements in future cases. 

At 9:30 a.m. Central European Time, privacy professionals around the world were refreshing their browsers to read the long-awaited judgment of the Court of Justice of the European Union (CJEU) principally addressing the viability of Standard Contractual Clauses (SCCs) and the EU-U.S. Privacy Shield (Privacy Shield) as means to transfer personal data from the European Union (EU) to the United States (U.S.).

In May 2020, the UK Cabinet Office published a document entitled “Guidance on responsible contractual behaviour in the performance and enforcement of contracts impacted by the COVID-19 emergency.” The Guidance is available here. Its stated purpose is to encourage parties whose contracts have been affected by COVID-19 to act responsibly and fairly, to support the government’s response to COVID-19, and to protect jobs and economy.

In our previous alert An English Law Perspective on COVID-19 and Contractual Disruption concerning force majeure events we noted that “beyond reasonable control” can mean that a business is expected to run itself well. In a recent case,1 the English High Court has issued a timely reminder that parties will not be able to rely upon force majeure clauses if they have not taken reasonable steps to guard against the particular event or circumstance in question.

Business disruptions caused by the global COVID-19 pandemic have demonstrated the importance of including clauses in contracts to appropriately govern the parties’ rights and obligations when such disruptions occur. Even as many U.S. jurisdictions begin the process of loosening the restrictions imposed to stop the spread of the pandemic, it is to be expected that business disruptions will continue. Accordingly, before you enter into any new contracts, you should consider carefully the force majeure and/or hardship clauses you include to address such business disruptions.

Reports are coming in thick and fast that both courts and international arbitrations are adapting to the remote-working climate. This alert gives a synopsis of the proposed burgeoning tools, rules and recommended practices for virtual hearings emerging from the arbitration community, which is becoming increasingly comfortable with video conferencing. It further drills down on the critical issue of award enforcement in light of these developments and the COVID-19 pandemic.

COVID-19 has and will naturally lead many contracting parties to consider declaring that a force majeure event has occurred when performance becomes impossible or significantly more difficult. But that is not the only way in which contracts may be affected by the current crisis. In this article, we consider force majeure and a range of other contractual clauses in which risk may have been planned for and allocated between the parties, and which are likely to be highly relevant during the current crisis, as well as other remedies.

The 13 March 2020 Queen’s Bench Division Media and Communications List judgment in Alexander Aristides Reid v Katie Price [2020] EWHC 594 (QB) has added to the body of case law on damages for breaches under data protection legislation. Mr Reid was awarded £25,000 under the Data Protection Act 1998 (DPA 98) and other causes of action.

The COVID-19 pandemic is unprecedented in modern times, and its economic impact is likely to be measured in years rather than months.  Against that backdrop, in our recent bulletin, An English Law Perspective on COVID-19 and Contractual Disruption, we provided guidance to businesses on invoking and responding to force majeure clauses.

While most courts are closed except for emergency matters, and parties in litigation are scrambling to determine how to amend their case schedules and respond to the uncertainties resulting from the COVID-19 outbreak, the arbitration world has emphatically responded: “The show must go on.” The flexibility of arbitration shines bright during this time of uncertainty and economic volatility, and allows for the conception of creative solutions for parties to resolve their disputes with minimal disruption.