Client Alert

UK Litigation - A Year in Summary

20 Dec 2021

This year saw the UK grapple with life after Brexit and, along with the rest of the world, the impact of the continued COVID-19 pandemic. As 2021 draws to a close, we round up the key events and developments from the year in UK litigation, arbitration, and business crime, investigations and regulatory spheres.


The transition period under the Withdrawal Agreement between the UK and the EU came to an end on 31 December 2020, leaving a somewhat uncertain future for civil judicial co‑operation post-Brexit. The Recast Brussels Regulation no longer applies to the UK and, on 28 June 2021, the European Commission refused to provide its consent to the UK’s accession to the 2007 Lugano Convention. To recognise and enforce English exclusive jurisdiction clauses (but not an asymmetric or non-exclusive clause) and English judgments, English courts will now have to rely upon the 2005 Hague Convention on Choice of Court Agreements, which the UK re-acceded to in its own right. While the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters may provide assistance in the future, it is still in the process of being ratified by the UK, which may take some time.

While there may be some uncertainty around enforcement of English judgments in Europe, the English Supreme Court continued to march forward, handing down a number of seminal decisions covering issues from COVID-19, to human rights, and class actions.

In January, judgment was delivered in FCA v Arch Insurers with the Supreme Court providing guidance on the meaning, effect, and application of common, non-damage business interruption insurance clauses within the context of COVID-19. The Court broadly found in favour of the FCA, holding that the insurers’ narrow interpretation of the relevant business interruption clauses was not viable. You can read more about the COVID-19 Business Interruption Insurance Test Case brought by the FCA in our January Client Alert.

On 12 February, the Supreme Court held, in the case of Okpabi v Shell, that the English courts have jurisdiction over claims advanced by a class of Nigerian claimants against Shell, a UK domiciled parent company, concluding that it was at least arguable that Shell UK owed a duty of care to communities affected by oil spills caused by its Nigerian subsidiary. It remains to be seen whether the substantive claim will succeed, but the doors appear to have been partially opened for parent company liability for infringing acts of its subsidiaries based on the principle of “significant control”. In a world where business and human rights violations and ESG are taking increasing prominence, the decision underlines the importance of parent company review and scrutiny of its corporate structure and overseas supply chains. For more detail, you can read our commentary on that case.

On 27 April, the Commercial Court dismissed a claim by the Danish tax revenue agency against a number of Defendants who were alleged to have participated in cum-ex transactions that had allegedly cost the Danish treasury to pay out over £1.5 billion in withholding tax refunds – the practice subsequently being declared unlawful. The Court re-affirmed that English courts have no jurisdiction to consider the enforcement of a foreign state’s penal, revenue, or other public law in striking out the claim.

On 21 July 2021, the High Court held, in Warren v DSG Retail Ltd, that an individual claimant who sought damages following a data security incident was not able to pursue claims for breach of confidence, misuse of private information, or negligence, finding that the claim had no real prospect of success. You can read our analysis of how this decision might affect the viability of such claims. Read on for an even more important decision in the Data Privacy space below.

Following a Supreme Court decision in December 2020 (see our previous alert), in August the Competition Appeal Tribunal granted the UK’s first Collective Proceeding Order since the UK’s collective action regime was introduced in October 2015 in the case of Merricks v Mastercard. The decision allows Mr. Merricks to proceed with collective “opt-out” proceedings for damages against Mastercard on behalf of an estimated 46.2 million individuals. Such claims are typically brought on an “opt-in” basis. It was thought that this decision may pave the way for future “opt-out” class actions in the UK. However, as we note below, these actions will not be as readily available as first anticipated following the decision in Lloyd v Google.

On 12 October, the Commercial Court delivered a landmark decision in Deutsche Bank v Busto di Arsizio holding that, if a UK Court is satisfied that a decision made by a court in a foreign legal system “does not represent the law”, the UK court can diverge from that authority. The court also held that the seniority of the foreign court that made the decision (in this case, the Italian Supreme Court) is irrelevant.

Finally, in November 2021, the Supreme Court unanimously dismissed the first “opt-out” class action brought in the UK outside of the competition law sector in Lloyd v Google. The claim had been brought on behalf of a class of four million iPhone users in the UK claiming approximately £3 billion for breaches of the UK’s Data Protection Act 1998 (based on an estimate damage of £750 per affected user). The court held that it was not possible to claim a uniform amount of compensation for an entire group without assessing the facts and circumstances of each individual member’s claim. The decision makes representative claims for data protection breaches far more difficult. We consider this decision’s implications for mass data protection claims in our client alert


This year began with the introduction of the 2021 ICC Arbitration Rules (the 2021 ICC Rules), which came into force on 1 January 2021. The 2021 ICC Rules contain a number of new measures aimed at addressing the ever-changing landscape of international arbitration and improving on efficiency, but do not dramatically change the ICC’s arbitration standards. As covered in our client alert, key revisions made by the 2021 ICC Rules include:

  • Clarification that arbitrators have an obligation to ensure effective case management;
  • An increased opt-out threshold for expedited arbitrations to US$3 million;
  • The introduction of express language on the disclosure of third-party funding; and
  • A call for a “greener” arbitration process.

The 2021 ICC Rules followed the publication of the London Court of International Arbitration’s (LCIA) 2020 Arbitration Rules, which came into effect on 1 October 2020, as discussed in our previous alert.

In February, the International Bar Association (IBA) published amended Rules on the Taking of Evidence in International Arbitration, including the insertion of an article providing that tribunals can order that evidentiary hearings be held remotely, at their own will or that of the parties. Going forward, parties wishing to exclude the possibility of a remote hearing may consider agreeing in the arbitration clause that a tribunal needs parties’ consent before one is ordered. Cybersecurity and data protection have also been added to the list of evidentiary issues, encouraging advanced discussions between the parties and arbitral tribunals on how these issues are to be treated. The IBA have also clarified that the tribunal may exclude, at the request of a party or on its own motion, evidence that has been “illegally obtained.” Further clarification of existing provisions by the IBA include that:

  • The tribunal does not have to consult with the parties when considering Requests to Produce;
  • Parties can submit second-round witness statements and expert reports to cover new factual developments; and
  • A tribunal-appointed expert does not have the power to resolve any disputes between the parties over information or access to information.

On the investor-treaty front, and as the effects of Achmea continue to resonate, the European Court of Justice (ECJ), in September, confirmed its position on investment claims brought under the Energy Charter Treaty, ruling that the investor-state arbitration clause of the Treaty is also not compatible with EU law. We had previously considered the likely impact of this decision in our blog post, and it will remain to be seen how tribunals (both in current and future disputes) now approach this issue – and indeed, whether the door has now been finally shut on intra-EU investment treaty disputes.

On 27 October, the Supreme Court provided further confirmation of the approach to determining the law that governs an arbitration agreement in Kabab-Ji v Kout. This follows the 2020 ruling in Enka v Chubb, that in the absence of an explicit choice of law by the parties, the law applicable to arbitration agreements will be the law governing the chosen arbitration seat. A more detailed discussion of the Enka decision can be found on our blog. In Kabab-Ji, the Supreme Court found that the governing law clause (that the Agreement was to be governed by the laws of England) was reasonably understood to denote all clauses incorporated into the contract, including the arbitration clause. Therefore, through application of the principles established in Enka, the law applicable to the arbitration agreement was found to be English law, as this was the governing law clause for the contract. This approach is to be contrasted with that applied by the Paris Court of Appeal, which rejected the application of English law to the arbitration clause, holding the arbitration clause to be legally independent from the main contract in which it is contained, and instead assessed the common intention of the parties and the circumstances of the matter. See further analysis of these contrasting rulings.

These cases are important decisions that reinforce London’s position as an arbitration venue of choice and the English courts’ pro-arbitration approach. They also serve as reminders of the importance of including an express choice of law provision in an arbitration clause, particularly where the seat of arbitration is not London, and where courts in other jurisdictions may take a different approach to determining what law would govern the arbitration clause.

Finally, and as the 2021 United Nations Climate Change Conference (COP 26) concluded in November 2021, the issue of “green arbitration” could not be more to the fore. There has already been significant commentary on the benefits of remote or virtual hearings and the impact that this could have on the arbitration process. Of course, change does not come without some challenges, and questions remain about whether justice can be properly served in a virtual hearing context. As we discussed in our blog post here, there is no doubt that green arbitration will be a focal point in the years ahead.

Business Crime, Investigations and Regulatory

The end of the Brexit transition period on 31 December 2020 ushered in the UK’s new autonomous sanctions regime under the Sanctions and Anti-Money Laundering Act 2018. Thirty-four UK sanctions regimes came into force at the outset of the new regime, with further sanctions being imposed throughout the course of 2021. The UK’s first sanctions under the Global Anti-Corruption Sanctions Regulations 2021 came into force in April and are designed to capture individuals or entities profiting from bribery and misappropriation of state funds from any country outside the UK, as well as from drug trafficking and colluding with terrorists. You can read our analysis of those Regulations.

As reported in our Quarterly Review, January also saw HMRC impose a record fine of £23.8 million on MT Global, a UK money transfer business, for breaches of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The fine was the largest that HMRC had ever issued and was imposed for failures in carrying out risk assessments, deficiencies in anti-money laundering policies, procedures and controls, and issues with record keeping.

In February, the UK Supreme Court handed down its judgment in R (on the application of KBR, Inc.) v Director of the Serious Fraud Office, dealing a blow to the Serious Fraud Office’s (SFO) ability to require disclosure from foreign companies. The Supreme Court held that notices issued under section 2(3) of the Criminal Justice Act 1987 do not give the Director of the SFO the power to require the production of material held by foreign companies that do not have a registered office or carry out business in the UK. Following the decision, the SFO will be increasingly reliant on requests for Mutual Legal Assistance to obtain documents from companies without a presence in the UK, as we note in our client alert on the decision. 

From a compliance perspective, March was a significant month following the European Parliament’s vote for new EU laws requiring companies to conduct environmental and human rights due diligence within their value chains, paving the way for effective Environmental, Social, and Governance (ESG) initiatives. The proposed rules are envisioned to apply not only to businesses incorporated within the EU, but also to non-EU companies that have access to the EU internal market. The European Commission was due to present its legislative proposal for a new Directive later in 2021; however, this appears to have been postponed.

In a significant step for the UK in shaping its financial services regulatory framework following its transition out of the European Union, the Financial Services Act 2021 received royal assent in April. From a financial crime perspective, it is noteworthy that the Act amends the UK’s insider dealing regime and extends the maximum criminal sentence for market abuse offences from seven to 10 years’ imprisonment. For further analysis of the Act, please see our client alert.

April also saw the high profile collapse of the SFO’s case against two former executives of Serco Geografix Limited, following failures in the SFO’s disclosure of evidence. The former Serco executives had been charged with false accounting and fraud by false representation in relation to representations made by Serco to the Ministry of Justice between 2011 and 2013. This followed a lengthy SFO investigation into Serco, which resulted in deferred prosecution agreement (DPA) and Serco being fined £19.2 million for falsifying accounting records. You can find more detail in our Quarterly Review.

The SFO found greater success in the summer, entering into three DPAs in July. The first, with the construction engineering company Amec Foster Wheeler Energy Limited, concerned the use of corrupt agents across the world in the oil and gas sector. Amec will pay £103 million under the DPA. You can read more about the Amec DPA in our Quarterly Review here. The SFO entered into further DPAs with two further UK-based companies, which the SFO has not named for legal reasons. According to the SFO, the DPAs share a common statement of facts and relate to the payment of bribes in relation to contracts worth millions of pounds.

October was also a successful month for prosecuting authorities. On 4 October, Petrofac Limited, a major UK-based service provider to oil and gas producers, was ordered to pay £77 million following a four-year investigation by the SFO. Petrofac pleaded guilty to seven counts of failing to prevent bribery contrary to section 7 of the Bribery Act 2010, admitting that former senior executives of the Petrofac Group paid bribes totalling £32 million to win contracts worth £2.6 billion in Iraq, Saudi Arabia, and the United Arab Emirates. This case was covered by our Quarterly Review.

In addition, on 19 October, the Financial Conduct Authority (FCA) announced that it had fined Credit Suisse £147.2 million following “serious financial crime due diligence failings” in relation to loans that the bank helped arrange for the Republic of Mozambique from 2012 to 2016. The FCA found that three employees of the bank received kickbacks of approximately US$53 million in connection with the loans, that a significant proportion of the loan monies were misapplied or misappropriated, and that the bank failed to adequately assess and scrutinise the financial crime risk associated with the loans. For our further commentary on the fine, see our client alert.

On 10 December, the Court of Appeal overturned the bribery conviction of Ziad Akle, a former executive of energy consultancy, Unaoil. According to the Court of Appeal, the SFO had failed in its disclosure duties and had refused to provide the defence with necessary documents to run their case. The documents had “a clear potential to embarrass the SFO in their prosecution of this case”. The Court was also highly critical of the SFO’s dealings with David Tinsley, a private investigator who was seeking to secure sentences that were more favourable for other individuals involved in the case. These factors, the Court held, undermined Akle’s right to a fair trial. You can find further detail in our Quarterly Review.

Looking forward to next year, the UK’s new national security regime is set to commence in January 2022. Under the National Security and Investment Act 2021 (NSI Act), the Government has the power to scrutinize and potentially block acquisitions and investments in sensitive sectors on national security grounds. The NSI Act includes a mandatory notification regime for certain “high risk” sectors, such as artificial intelligence and energy, and a voluntary regime for transactions outside of these sectors. The Government estimates that up to 1,800 transactions may be notified each year. We analyse the impact of the NSI Act in further detail in our client alert.

We are grateful to the following team members for their contributions: trainee solicitors Haania Amir, Jonathan Bryant and Emily Duffy.



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