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The Importance of Pro Bono in Law
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Disability Inclusion in the Workplace: Insights from the B.E. Inclusive Event
July 22, 2024BRITISH GAS’S SURGE IN WINDING-UP PETITIONS
British Gas, a major energy supplier, has filed a significant number of winding-up petitions against small and medium-sized enterprises (SMEs) struggling with post-COVID financial challenges.
A winding-up petition is a legal mechanism that creditors use to initiate the forced liquidation of a company unable to pay its debts as they fall due. In the UK, creditors can apply to wind up a company, provided they can prove that it cannot pay a debt of at least £750.
The implications of this mechanism are severe. It often results in frozen bank accounts, disrupted operations, and the company’s dissolution, with its assets sold off to pay creditors.
What’s happening with British Gas?
Over the past two years, British Gas has filed 171 winding-up petitions against companies, a stark increase from the 51 petitions filed in 2021 and 2022. This surge is partly driven by skyrocketing energy bills, exacerbated by the Russia-Ukraine conflict, which has left many SMEs struggling to cope. The lifting of pandemic-era financial protections has further exposed these businesses to economic instability.
British Gas is not alone in using this legal measure; other energy suppliers have followed this trend to address outstanding debts and safeguard their financial interests. The large volume of petitions highlights the severity of debt issues in the SME sector.
As such, these businesses must understand the potential consequences and protect their interests, including proactively assessing their financial situation, developing realistic plans to address debt, and implementing robust cash flow management practices.
Despite rising customer energy costs, British Gas reported a tenfold profit increase in 2023, benefiting from higher bills. This financial success starkly contrasts many SMEs’ economic difficulties, fueling calls for an energy ombudsman to provide stronger protections for small businesses.
Consequently, organisations such as the Federation of Small Businesses (FSB) are urging the government to empower the ombudsman with greater authority to shield small businesses from aggressive actions by energy companies.
Impact on law firms
British Gas’s increase in winding-up petitions has implications for law firms, particularly those specialising in insolvency and restructuring law and commercial litigation.
Insolvency and restructuring law
Insolvency lawyers are now increasingly engaged in advising and representing creditors and debtors. They assist clients in filing or defending against winding-up petitions, evaluating a petition’s validity and determining the most suitable course of action for SMEs in the insolvency process.
Furthermore, these lawyers can help businesses develop restructuring strategies to navigate financial distress and mitigate the severity of potential repercussions. This may include negotiating debt restructuring or repayment plans with creditors or formulating alternative rescue plans to maintain business operations.
Commercial litigation
Disputes over unpaid energy bills have also increased demand for commercial litigators. These lawyers help clients pursue legal action to recover outstanding debts.
Additionally, they handle disputes over energy supply contracts, advise on contract breaches, and represent clients in negotiations or litigation to enforce or defend contractual rights.
– By Yman Abrate
THE PANAMA CANAL
Due to global warming in recent years, the frequency of El Niño events has increased, reducing the Panama Canal’s water levels with a risk that it may dry up soon.
Brief history
Initially, the French began work on the canal in 1881. Realising that they could not dig across the entire country due to the unstable terrain, which took the lives of 22,000 workers, the project was abandoned. In 1904, the U.S. reignited this ambitious project, relying on the pinnacle of engineering to create a lock canal instead of a sea-level one.
Various inventions were used to facilitate the canal’s construction. Completed on August 15, 1914, the Panama Canal aimed to facilitate global trade by connecting the Atlantic and Pacific Oceans.
Due to increasing global warming, there is a lack of rainfall caused by the rise in El Nino events. Recently, the lake has faced the risk of drought, which could stop using the Panama Canal.
Economic impact
The Panama Canal, a vital artery of global trade, facilitates 5% of the world’s trade and 40% of the U.S.’s imports and exports. This generates a significant 6.6% of Panama’s GDP, amounting to $ 4.32 billion in annual revenue. However, the increasing frequency of El Niño events due to global warming is taking a toll.
Each ship transit requires a staggering fifty-two million gallons of freshwater across all locks. The more frequent droughts, which used to occur once every seven years, now result in an additional $200 million expense for the canal’s annual costs.
The canal’s reduced capacity also burdens countries and shipping companies economically.
Increased shipping costs
– There will be increased shipping costs owing to longer routes taken around the southern tip of Cape Horn or the Cape of Good Hope, owing to significantly higher fuel costs and longer travel times.
Customers will endure higher freight rates, affecting the price of imported goods in the UK and leading to inflationary issues.
Supply chain disruptions
– Longer shipping routes equate to delivery delays, especially for industries relying on just-in-time delivery systems.
– The UK would experience a shortage of certain goods, especially those sourced from countries that regularly use the Canal for goods shipping.
Impact on trade
– The UK will likely face higher costs when shipping to other countries on the Pacific side of the Americas and Asia, making their products less competitive.
The energy sector
– The disruptions could affect energy supplies and prices, leading to higher costs for businesses and consumers.
The insurance sector
Cargo is insured in case of loss and damage on standard terms like the Institute Cargo Clauses (A). Longer sea routes are considered more dangerous, which inevitably means shipping companies will pay higher insurance premiums, which they will pass on to customers.
Legal impact
Contractual issues
Between 13,000 and 14,000 ships cross the canal annually, causing delays and accidents that damage cargo. Consequently, the Panama Canal’s turbulent operation directly impacts future sale contracts dealing with delays and extra costs. To mitigate such circumstances, revised clauses of delay, vessel detention, and force majeure are inserted into contracts.
Under English law, frustration is only accepted if it can be proven that the performance of the contract has become impossible. Where performance is delayed or becomes much more expensive, this will not apply.
Some considerations in sales contracts include the attribution of liability for additional expenses related to the carriage of goods, whether such costs can be escalated or passed down the contractual chain, and whether any demurrage clauses apply. Where the latter is found, insurance claims for damage during loading and unloading cargo can be sought.
Renegotiations of shipping and supply contracts will be necessary to account for increased costs and transit times.
Trade agreements
– Trade routes will probably be reassessed to account for the new realities, and as such, renegotiations to assess change in cost structures and delivery times will be necessary.
Regulatory changes
– Shipping regulations and standards will likely be revised to address the logistical challenges of longer sea routes.
– Increased fuel consumption is inevitable, leading to higher emissions. Stricter environmental laws may be required to mitigate these consequences.
Dispute resolution
– The disruptions caused by the change in the Panama Canal could increase costs and lead to a rise in litigation as parties seek redress from delays, increased costs, and non-performance.
Overall, the drying up of the Panama Canal would have profound economic and legal implications in the UK and worldwide. To mitigate these impacts in the UK, adaptation through strategic planning, investment in infrastructure, and potential regulatory changes must occur. The same could be said for other countries likely impacted.
Otherwise, we will continue to observe the adverse effects of poor preventative strategies as is currently unfolding.
– By Stefan Iacobescu
APPLE INTELLIGENCE – “AI FOR THE REST OF US?”
Apple’s recent integration of Apple Intelligence is a strategic manoeuvre that has boosted its competitive advantage. The voice-controlled personal software, which is available on the latest iPhone, assists with various administrative tasks. This implementation has given Apple a competitive edge, keeping it on par with industry leaders like Google, Microsoft, and Amazon.
The AI market is experiencing exponential growth, with a projected compound annual growth rate of 37.7% until 2030. In this context, Apple’s commitment to transparency and prioritising user privacy cannot be overstated.
Sustaining these principles is crucial in the face of AI’s emerging challenges and threats.
The “personal virtual assistant.”
With a significant age disparity of 50% between Gen Z and late Millennials, Apple Intelligence caters to a diverse audience. It offers an inclusive, user-friendly and accessible technological service. Positioning itself as an “intelligence that understands you”, Apple Intelligence offers personal virtual assistance for all.
Apple’s latest devices empower customers to accomplish numerous personal tasks facilitated by Apple Intelligence. Features like Genmoji and Image Playground allow users to curate images based on descriptions. Additionally, Siri offers enriched conversations and contextual understanding, enhancing user experience.
Integrating OpenAI’s ChatGPT into the operating system also expands Apple Intelligence’s capabilities. It ensures accurate and knowledgeable results across various apps.
Issues
“Built with privacy at the core?”
Apple prioritises privacy and strives to understand individual interests while safeguarding user data. For instance, Apple’s creation of the Private Cloud Compute ecosystem ensures limited access to sensitive data. It also prevents query information retention and promptly deletes unnecessary data.
Nevertheless, securely processing private AI in the cloud presents challenges, as it requires unencrypted access to personal data for machine learning models.
The partnership with OpenAI’s ChatGPT raises questions about data collection, particularly for users linking their ChatGPT subscription with iOS and macOS accounts. While Apple Intelligence emphasises data privacy and security, the advancements in the field carry the potential risk of privacy invasions that have not yet been encountered.
“Applying the technology responsibly.”
Apple’s commitment to data protection and responsible technology application remains, but substantiating these claims remains challenging.
Stamos, Computer Science Lecturer at Stanford University and former chief Security Officer at Facebook, states, “They’re promising a level of transparency that nobody’s really ever provided. […] It’s hard to totally prove at this point, but what they’ve laid out is about the best you could do to provide this level of AI services running on people’s private data while protecting their privacy.”
To fulfil the promises of the Worldwide Developers Conference (WWDC), Apple must ensure responsible behaviour in AI integration. Despite marketing Apple Intelligence as “AI for the rest of us”, concerns about inclusivity arise due to persistent transparency and accountability issues when deployed to millions of iOS and macOS users.
Furthermore, non-technical users need assistance in understanding the implications and potential impact of AI. Service providers often lack transparency, withholding specific details about their AI software stack. This lack of transparency makes it challenging for users to verify the integrity of connected services.
To maintain user trust and uphold its commitment to responsible AI usage, Apple must address transparency and accountability challenges. This will equip users to make informed decisions regarding their interactions with AI-powered technologies.
Impact
Legal
Apple’s iOS and similar platforms must comply with distinct antitrust obligations outlined in the EU’s Digital Markets Act (DMA), which regulates digital platforms within the European market.
Yet, the recent partnership between Apple Intelligence and ChatGPT raises concerns. Large language models like ChatGPT are exempt from regulation under the DMA since they are not classified as “core platform” services. While Apple assures privacy through customer opt-ins, the impact of Apple’s iOS antitrust obligations on ChatGPT remains unclear.
Apple Intelligence’s impact on the legal sector is expected to be limited. Most legal professionals rely on specialised tools and software optimised for non-Apple devices for tasks such as legal research, document management and case analysis. Nonetheless, the innovation-driven law firm BCLP stands out by offering new trainees access to advanced technologies like iPhones, raising the possibility that other law firms may follow suit.
The potential benefits of Apple Intelligence for new trainees in their daily legal practices are still uncertain. But, if Apple products gain broader adoption in the legal industry, integrating Siri and other AI features could potentially revolutionise the daily operations of legal practitioners.
Nevertheless, addressing privacy concerns and maintaining a careful balance when handling sensitive data while utilising Apple Intelligence is crucial.
Economic
Apple Intelligence has captured the attention of stock market investors, propelling Apple shares beyond the significant milestone of $200. The forecasted developments for Apple Intelligence are expected to drive high-margin growth in Apple’s Services division and potentially lead to a market capitalisation of $4 trillion.
Apple’s entry into generative AI has significantly impacted industries and the economy. It has created numerous job opportunities in AI development and related fields, but its true impact has yet to be unveiled.
Consumer
Apple Intelligence aims to revolutionise users’ lives by learning habits and preferences, becoming an invaluable tool for daily tasks. With vast practical implications, it can assist individuals with disabilities and provide swift access to hard-to-find information.
Apple Intelligence, initially available on select models like the iPhone 15 Pro and iPhone 15 Pro Max, will also be accessible on the upcoming iPhone 16, set for release this autumn. This is a compelling incentive for users to upgrade and enjoy the enhanced personal benefits. It may also encourage consumers to choose higher-priced phones to access the transformative features of Apple Intelligence.
Consequently, Apple Intelligence promises to address concerns about privacy, technological responsibility and transparency. Nonetheless, the actual implementation and equilibrium of these principles have yet to be witnessed.
It is vital to observe how Apple translates its intentions into action while balancing protecting user privacy and ethical practices.
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By Unique Beckford