This newsletter provides general information and is not intended to be comprehensive or to provide specific legal advice. Professional advice appropriate to a specific situation should always be sought.
- SFO Secures First Conviction of an individual for DPA Related Conduct
- Department for Energy Security and Net Zero Outlines Long-term Strategy
- UK Government Introduces Corporate “Failure to Prevent Fraud” Offence
- Review of the Arbitration Act 1996 Second Consultation Paper
- English High Court Approves Service By NFT Alone
- High Court rules the duty of disclosure goes beyond contemporaneous documents
- UK to Sign Singapore Convention on Mediation
1. SFO Secures First Conviction of an individual for DPA Related Conduct
Following 16 previous attempts at similar convictions, the Serious Fraud Office (“SFO”) secured its first conviction of an individual in connection with a Deferred Prosecution Agreement (“DPA”) in March 2023. This conviction is the only one of its kind despite the SFO entering into 12 DPAs since the scheme was introduced in 2014. However, this conviction came about as a result of a guilty plea, rather than from a contested trial and it therefore remains to be seen whether this conviction will form part of a wider trend of individuals being convicted as a result of conduct which is the subject of a DPA.
The week after this conviction, three former executives of a company which had also entered into a DPA were acquitted at trial after the SFO offered no evidence against them. The SFO stated it was not in the public interest to attempt to prosecute them, and recognized that challenges in disclosure were a factor in not offering evidence.
2. Department for Energy Security and Net Zero Outlines Long-term Strategy
The government has recently announced plans to ensure Britain’s long-term energy security, stable energy prices, and position as global leader in its net zero commitments. Some of the key features of the ‘Powering Up Britain’ campaign for the energy and infrastructure sectors include: a target of generating 5GW of power from floating offshore wind, which will form part of its increased target of generating 50GW from offshore wind by 2030; a list of 8 Carbon Capture Usage and Storage (CCUS) projects invited to proceed by the government, including three Industrial Carbon Capture projects, two Energy from Waste projects, one power CCUS project and two blue hydrogen projects; reiterating its commitment to nuclear energy through the launch of ‘Great British Nuclear’, responsible for the delivery of new and innovative nuclear projects such as Hinkley Point C and Sizewell C; and the creation of a new solar taskforce established to deliver a roadmap to achieve 70GW of solar by 2035.
3. UK Government Introduces Corporate ‘Failure to Prevent Fraud’ Offence
On 11 April, the UK government announced that it would introduce a new offense which would make companies criminally liable for failing to prevent fraud by their employees.
This offense will be tabled in the Economic Crime and Corporate Transparency Bill, and is an attempt by the government to increase the ability of prosecutors to combat financial crime. Businesses may face criminal action under this legislation if they are found to have insufficient measures in place to protect their employees from selling products to consumers under false pretenses, or if they have falsified accounts to mislead investors.
A company may be able to avoid liability under this legislation if they are able to prove that they put in place ‘reasonable measures’ to deter the offense. The Home Office stated that the offense will not be enforced until they have published guidance on what these ‘reasonable prevention’ measures are.
4. Review of the Arbitration Act 1996 Second Consultation Paper
On 27 March 2023, the UK Law Commission published its second consultation paper on the review of the (English) Arbitration Act 1996 (the “act”). It addressed the proper law of the arbitration agreement, the procedure for jurisdictional challenges to awards under Section 67 of the Act, and discrimination in arbitrator appointments. The Law Commission has proposed that, given the complexity surrounding the question of the proper law of an arbitration agreement in the absence of an express choice, reform is advisable and therefore a statutory rule should be incorporated into the Act stating that the law of the arbitration agreement is the law of the seat, unless the parties expressly agree otherwise in the arbitration agreement itself.
Regarding an amended approach to Section 67 challenges to awards on the basis of jurisdiction (the current law being that a challenge before the court comprises a full de novo hearing of the question, and does not consider the Tribunal’s findings), the Law Commission has maintained its view that Section 67 should not result in a full re-hearing, and should be by way of an appeal type of process. Regarding discrimination, the second consultation paper seeks comments on whether discrimination should be generally prohibited in an arbitration context; what the remedies for discrimination might be; and whether a standing exception be made such that it is always permissible to require an arbitrator to have a different nationality from the arbitral parties.
5. English High Court Approves Service By NFT Alone
The English Civil Procedure Rules allow for the Court to authorize service by means other than those expressly provided for by the Rules. As technological change and alternative forms of communication have become more commonplace, the Courts have proven themselves willing to authorize services by unconventional and non-traditional means – for example, in 2021, the Courts approved service by Instagram.
The Courts have now, for the first time, authorized service by non-fungible token (or NFT) alone, having recently approved service by NFT alongside a more traditional means of service (namely email). in Osbourne v Persons unknown and others  EWHC 39 (KB), the Claimant’s crypto wallet had been hacked by unknown persons and NFTs were transferred to different wallets. The Claimant sought an injunction to prevent any further transfer of these NFTs. As part of the injunction application, the Claimant obtained permission to serve the claim form on some of the Defendants by NFT alone, as there were no other means of service available on these Defendants. This judgment further evidences the Court’s willingness to keep up with technological changes and to innovate where traditional means of service are not available.
6. High Court rules the duty of disclosure goes beyond contemporaneous documents
The High Court has rejected an argument by the appellant that its duty of disclosure was limited to documents contemporaneous with the cause of action and did not encompass attendance notes of conversations created after proceedings had been commenced. in Morina and others v Scherbakova and others (Re Estate of Vladimir Alekseyevich Scherbakov)  EWHC 440 (Ch)the High Court held that within the limits of proportionality, the Practice Direction governing disclosure in the Business and Property Courts must be intended to achieve disclosure of all documentation likely to be relevant and important for the fair resolution of the claim.
The appellant relied on PD 51.U.7.3 (now PD 57AD.7.6) which provides: “Issues for Disclosure” means for the purposes of disclosure only those key issues in dispute, which the parties consider will need to be determined by the court with some reference to contemporaneous documents in order for there to be a fair resolution of the proceedings”. It was argued that there was a “sound policy reason” for limiting disclosure to “contemporaneous documents”, namely that such documents are a far more reliable source for a judge in resolving disputed issues than recollections of events that occurred many years earlier.
The Court agreed that contemporaneous documents will generally be preferred as a source of evidence to documents created after the event from memory but noted that there may be types of cases where the fallibility of memory is not a problem. If documents created after the cause of action were excluded from disclosure, that would in some cases result in excluding disclosure documents which are important for the fair resolution of the claim. The appellant submitted that disclosure of later documents could be sought via an order for disclosure for specific documents. However, the Court rejected this argument: the other party may not know of the existence of the documents in question and there was, in any case, no good reason why a second application should be required to achieve disclosure of documents which may be important for the fair resolution of the claim.
7. UK to Sign Singapore Convention on Mediation
The UK has recently announced that it will sign and ratify the Singapore Convention on Mediation, formally the United Nations Convention on International Settlement Agreements Resulting from Mediation (the “Conventions”). The Convention, which opened for signature in August 2019 and came into force in September 2020, currently has 55 international signatures and 10 ratifications.
The Convention is a multilateral treaty which sets out the framework for the enforcement of international settlement agreements resulting from mediation, similar to the role played by the New York Convention in respect of arbitration awards. It applies to international settlement agreements resulting from mediation, concluded by parties to resolve a commercial dispute. Once the UK becomes a signatory, the English courts will be able to directly enforce settlement agreements resulting from mediations around the world, without the need to restart litigation or arbitration proceedings.