Litigation Trending - the year that was 2021 - looking back at our ten predictions

At the start of the year, Ashurst's Commercial Litigation Team offered ten predictions for what the litigation space might look like in 2021. As the year draws to a close, we look back at how those predictions have fared.

1.  Prediction: Remote hearings (or hybrids) are here to stay

How did we fare? Remote and hybrid hearings were certainly a mainstay of court procedure in 2021. While in-person hearings did make a comeback as COVID-19 restrictions were eased, attendance was often limited. Indeed, in his speech for BAILII's Sir Henry Brooke Annual Lecture 2021, Sir Geoffrey Vos confirmed that the Courts are actively developing improved systems to facilitate remote and hybrid hearings going forwards.

2.  Prediction: An increase in cases regarding jurisdiction clauses following Brexit 

How did we fare? The chances of the UK's accession to Lugano slipped further away in 2021 with the European Commission's view that the UK should not be permitted to re-join (see our briefing). The Commission's view is that participation should not be offered to any third country that is not part of the internal market – although in making the final decision on this, the European Council may take a different view. However, this uncertainty has not (as yet) translated into an increase in cases on jurisdiction as we predicted. The courts saw the usual steady flow of cases on jurisdiction, but none particularly seemed to flow from the impact of Brexit. We have yet to see definitive guidance on whether asymmetric clauses are "exclusive" for the purposes of the Hague Convention on Choice of Court Agreements.

3.  Prediction: An increase in climate related litigation

How did we fare? 2021 has seen a rise in climate related litigation internationally. Many of these cases have been brought against governments, as a means of challenging acts, omissions or third party authorisations, and an increasing number are based on human rights principles. This trend is likely to continue as, in October, the UN's Human Rights Council voted in favour of a resolution to recognise the right to a safe, clean, healthy and sustainable environment as a human right. While not yet legally binding, this will likely bolster the arguments available to claimants in future human rights based climate litigation. Big corporates have also come under increased scrutiny this year. Most notably, in May, a landmark decision was made by the Dutch courts in a claim against Royal Dutch Shell plc, in which the Court ordered Royal Dutch Shell to cut its CO2 emissions by 45% by 2030 (compared to 2019 levels). It remains to be seen if (and on what basis) any similar claims are brought in the UK. ESG more generally has remained a hot topic. Regulators, such as the Competition and Markets Authority (CMA), have started to crack down on "greenwashing" by businesses, with a review of unsubstantiated/misleading environmental claims set to commence in January 2022. The CMA has published a "Green Claims Code" to assist businesses in complying with consumer law.  

4.  Prediction: Supreme Court to rule against "loss of control" damages in Lloyd v Google

How did we fare? The Supreme Court did indeed rule against "loss of control" damages in Lloyd v Google. You can read in more detail about the decision, and the practical consequences it may have for representative actions, in our briefing. 

5.  Prediction: The evolution of the class action landscape in the CAT post-Merrick

How did we fare? Since the Merricks certification decision in August 2021, there are signs that the emerging collective proceedings regime is gathering pace. This includes the first certification of a standalone claim in Justin Le Patourel v BT Group Plc and British Telecommunications Plc [2021] CAT 30 (see our article here). In October 2021, the CAT also granted CPOs in the two Justin Gutmann claims relating to rail fares, and there are a number of other CPO applications pending in the wake of the Le Patourel judgment. An area to continue to watch closely.

6.  Prediction: Another Financial List test case

How did we fare? 2020 saw the first judgment handed down in the Court's Financial Markets Test Case Scheme, five years after its introduction. While that case - which concerned business interruption insurance - undoubtedly demonstrated the ability and willingness of the Courts to use the Scheme to hear such claims quickly, there have been no further cases in 2021: neither Brexit nor the phasing out of LIBOR have (yet) thrown up any suitable issues. It will be interesting to see whether that changes in 2022, or whether we will be waiting another five years for the next test case.

7.  Prediction: An increase in insolvencies following the COVID-19 pandemic

How did we fare? Despite the UK suffering a significant economic downturn this year, the tsunami of insolvencies is yet to hit and there were about 10% fewer insolvencies in Q3 2021 than in Q3 2019 (pre-pandemic). 2021 has seen the introduction and/or extension of various government support measures (such as the Coronavirus Job Retention Scheme and the Recovery Loan Scheme) which have clearly helped stave off insolvencies. However, these measures are starting to be withdrawn and this withdrawal is coinciding with the re-imposition of restrictions across Europe as a result of the Omicron variant. Therefore, it may be that the predicted surge of insolvencies is just around the corner.  You can read about this topic in more detail in Ashurst's restructuring and special situations team's recent briefing. 

8.  Prediction: A rise in litigation-funded group actions 

How did we fare? The biggest development in the litigation funding market in 2021 was the Supreme Court's decision in Lloyd v Google. The approach that the Supreme Court took to construing CPR r 19.6, which it noted had practical and commercial issues, is very likely to impact the ability of claimants to bring funded opt-out claims and claimants will have to do more work to get CPR r 19.6 claims off the ground.

9.  Prediction: A new approach to witness evidence 

How did we fare? Reforms to witness evidence came into force in April. Initially affecting only the Business and Property Courts, they have recently been introduced in the CAT and similar reforms will likely be implemented across the rest of judicial system in due course. The impact of the changes is already being felt – and has already been tested in the Courts.

10.  Prediction: Further consideration of Disclosure Pilot 

How did we fare? The Disclosure Pilot continued to cause frustration among users despite the changes made in late 2020. To its credit, the Disclosure Working Group is listening and further changes were proposed in mid-2021 and came into force in November 2021. These included a streamlining of the process, a separate (and simpler) regime for less complex claims and a recognition that a more bespoke approach is required for multi-party cases. The pilot was also extended to 31 December 2022.

Not a bad outcome, even if we say so ourselves! Please keep a look-out for our predictions for 2022 which will be published shortly. In the meantime, best wishes for the festive season to all!

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