Parallel Proceedings: Spring 2021 update

The ongoing impact of COVID continues to prepare the ground for an uptick in parallel proceedings. There are now clear indications of increased fraud and other improper conduct, and we expect to see a rise in related actions arising from a range of other events in the current environment, including data breaches, insolvencies and disruptions to employment relations. Meanwhile, the end of the Brexit transition period has introduced uncertainty in the framework for civil disputes between UK and EU parties, which has increased the risk of parallel civil proceedings.

We summarise below a number of the key legal developments relevant to parallel proceedings over the past six months. See our parallel proceedings microsite for further insight into the issues that arise when an incident leads to multiple legal proceedings and/or enforcement actions.

In this issue:

Impact of Brexit on multi-jurisdictional proceedings

The end of the Brexit transition has brought significant changes to the framework for disputes between parties in the UK and parties in the EU, with effect from 1 January 2021. These changes have reduced the level of certainty in the way that jurisdiction clauses in favour of the English courts will be recognised across the EU, increasing the risk of parallel civil proceedings being run in the UK and the EU. Read our article here, in which we summarise the main areas of uncertainty and the prospects for further developments.

Parallel proceedings under Lugano and Brussels Recast

The English courts have been kept busy with issues relating to the application of the Brussels Recast Regulation and the Lugano Convention. Although both Brussels Recast and Lugano no longer apply to proceedings commenced in the UK after the end of the Brexit transition period, they remain relevant to proceedings initiated before 1 January 2021 and it is yet to be seen whether the UK will be successful in its application to rejoin Lugano. Read our overview of the recent authorities here.

Civil proceedings arising from a major data breach

Enforcement activity by data privacy regulators has picked up in 2020 and a number of major investigations into high-profile data breaches have concluded in recent months. This in turn has led to a rise in follow-on civil litigation arising from major data breaches, a trend which we expect to continue. In the UK, a recent Court of Appeal decision has prompted a wave of opt-out representative class actions, although we await the Supreme Court’s final say on an appeal to that decision as to whether such actions should be permitted. Read our full article on these developments here.

Section 90A FSMA claims

Investor actions brought under s.90A FSMA against UK listed companies which publish allegedly misleading market information are increasingly a feature of UK litigation. Such claims can introduce a range of specific challenges where there are ongoing or concurrent criminal or regulatory proceedings. In view of this trend, we have published a series of articles looking at s.90A FSMA claims in detail. See our further overview here.

Extra-territorial investigations

The Supreme Court has held that the SFO cannot use its powers under s.2 of the Criminal Justice Act 1987 to require a non-UK company to produce documents held outside the UK. The judgment may also impact the extra-territorial reach of other UK investigating authorities and have further repercussions for parallel proceedings arising from similar events to those under investigation. See our summary of the practical implications of the KBR judgment here.

Collateral use

The rules regarding the use that can be made of material disclosed or served in civil proceedings, including in support of parallel actions, can be complex and often counter-intuitive. The English courts have delivered a number of recent judgments that have clarified the scope of these rules and provided a reminder of the risks of failing to comply with the rules. See our full article on these developments here.

Access to court documents

In the latest instalment of the Dring litigation, the English High Court has further clarified the rights of non-parties to litigation to obtain documents from the court file. These principles must be considered both by non-parties looking to use court documents in related proceedings and for litigants with specific concerns about non-party access to such documents. See our full overview here.

Publicity of FCA Decision Notices

A recent decision of the Upper Tribunal has emphasised the difficulties of restricting the disclosure of statements made in an FCA Decision Notice. Such notices may contain adverse statements that can both cause reputational harm and contain information and admissions that may support and impact related proceedings. See our full article on the implications of this decision here.