The Future Lawyer Weekly Briefing – W/C 26th August 2024

In this week’s briefing:

Data breaches and cyberattacks: 65% of law firms have suffered data breaches, and 35% of firms do not have cyber mitigation plans in place.

Higher Education Act: Is Labour demonstrating their low priority for academic freedom, over individual belief and feeling? Or are they simply keeping the politics away from academic institutions to retain their status as independent bodies?

Mediation vs. Litigation: Despite its shown efficacy in several instances, mediation’s whole potential in the UK is still undiscovered.

Mickey wants fair play: The union’s victory over Disney could help the labour movement by inspiring more workers to join unions and take up the cause of improving working conditions.

Mickey Wants Fair Pay

Article by Fatima Ahmed

Four unions representing over 14,000 Disneyland workers have overwhelmingly voted to authorise a strike in response to ongoing labour disputes within the entertainment industry. This action stems from months of stalled negotiations and allegations of labour violations by Disney.

Since April 2024, the unions have been engaged in negotiations for a new contract, but these efforts have been met with increasing labour complaints. The charges include numerous instances of unlawful discipline, intimidation, and surveillance of union members who wore union buttons at work.

These allegations are currently under investigation by the National Labor Relations Board, with a regional director set to determine if the case warrants a hearing. While strike authorisation is a common part of the negotiation process, if this strike goes ahead, it would be the first at Disney’s original resort in 40 years.

Critical Issues

Many Disney workers are standing up for the cast members who have been unlawfully disciplined for exercising their rights. The protective measures offered to employees by US labour law would be undermined if Disney was found to be infringing on these rights.

Relevant Legislation:

• Employees’ freedom to participate in union ‘publicity activities for employees’ humanitarian purposes is protected by Section 7 of the NLRA. This freedom includes the ability to form a union, join one, support one, bargain, and even take part in other mutual aid activities.
• According to Section 8(a)(1) of the NLRA, employers are prohibited from engaging in any form of discrimination, restraint, intimidation, or attempt to compel workers into not exercising their rights as outlined in Section 7.
• Regarding pay, hours worked, and other terms and conditions of employment, Section 8(a)(5) mandates that employers negotiate in good faith with the representatives of their staff. By holding up contract negotiations for months, refusing to make significant concessions, and failing to have productive discussions with the unions, Disney has arguably engaged in bad faith bargaining, contrary to Section 8(a)(5).

How and why a law firm would be involved

A commercial law firm might be highly beneficial to both the unions and Disney in regard to allegations that Disney engaged in bad faith negotiations and broke labour laws. In this situation, a firm could take on multiple responsibilities, including negotiating, helping with complex legal issues, and ensuring labour laws are properly adhered to.

The effects of the dispute for public relations are also significant. Accusations of Disney violating labour laws can seriously damage the company’s reputation, so it’s crucial for Disney’s legal team to protect the brand’s image.

They can do this by working closely with the public relations team to manage what’s being said about the situation, craft clear public statements, and ensure that their legal strategies are in line with the company’s overall plans. The legal team might also help communicate with the media, shareholders, and the public to minimise any negative effects from these allegations.

During negotiations with Disney, the union could be directly represented by solicitors, guaranteeing that Disney is negotiating in good faith and that the employees’ legal rights are respected. In order to make sure the wording is accurate and compliant with the law; they would also help with the drafting and review of proposals for pay increases and other contractual terms.

If negotiations fall apart or Disney seriously breaches the law, solicitors might take legal action against the company. This could include seeking a court order to force Disney to negotiate fairly or pursuing financial compensation for the union and its members. If a large group of employees is affected, the law firm might also consider filing a class action lawsuit to seek compensation for any losses caused by Disney’s actions.

Broader Societal Impact

The broader impact of Disney being accused of paying low wages and delaying contract negotiations can be quite significant, affecting both society and the economy.

Disney is a well-known brand with a reputation for family-centred entertainment. Accusations of underpaying workers and unfair labour practices can damage its reputation, causing public backlash and eroding consumer trust. Negative publicity might lead to boycotts or less support from people who feel Disney isn’t treating its employees fairly, which could hurt their revenue and market position.

Moving Forward

On the 24th of July a provisional agreement was struck. A contract lasting three years with the safeguarding of premiums, seniority raises, and large pay increases for all cast members. This was ultimately settled with following a vote on July 29th, which was contingent upon the cast members’ acceptance of the offer, which they eventually did.

This win is linked directly to workers showing their strength in the bargaining table, in the parks, and by standing in solidarity.

Here are the key points from the new contract:

• Three-Year Agreement: The contract will be in effect for three years.
• Largest Wage Increases: Most cast members will receive a total raise of $6.10 over the next three years.
• Higher Minimum Wage: By 2024, the base wage will increase to at least $24 per hour, with some roles receiving even more.
• Longevity Pay: Significant pay increases for long-term cast members, recognising their dedication.
• Better Attendance and Sick Leave Policies: Updated policies give cast members more flexibility to handle personal matters without worrying about disciplinary consequences.

The union’s victory over Disney could help the labour movement by inspiring more workers to join unions and take up the cause of improving working conditions and salaries.

Mediation vs. Litigation in the UK: Weighing the Real Costs and Benefits

Article by Nabhan Zarif Sayeed

Since the implementation of civil procedure rules (CPR), there has been a development in the use of alternative dispute resolution (ADR), particularly mediation, for the settlement of civil issues unrelated to family matters.

Pre-action protocols stipulate that parties either openly envisage alternative dispute resolution (ADR) or, in accordance with the practice directions on protocols, adhere to a legitimate approach designed to prevent litigation.

The court has the obligation to consider ADR as part of active case management when implementing the overarching purpose (CPR Pt 1.1).

Impact of ADR on Costs in Litigation

According to CPR Pt 44.3 (4)(a), while determining the appropriate cost order, the court must weigh every component of the case, including the behaviour of the parties involved. Specifically, according to CPR Pt 44.5 (3), one of the other variables to be considered is the level of effort expended throughout the proceedings in attempting to settle the disagreement.

44.5 (3) underlines a dilemma that any practitioner would undoubtedly have—will the decision not to pursue ADR genuinely impact the general principle that the prevailing party is entitled to its legal expenses in the case? That is indeed a possibility.

The Consequences of Refusing Mediation

In the event that a party prevails in court, the court has the authority to diminish or modify their right to reimbursement for expenses if it is determined that the party unjustly declined to participate in ADR.

Courts expect parties to explore ADR before proceeding to a full trial. Failing to engage in ADR might be seen as a lack of reasonable action, thereby impacting the court’s judgement on costs. Simply put, failure to use ADR may result in a decrease in the awarded costs for the prevailing party.

Case Study: Hickman v Blake Lapthorn

However, considering the case of Hickman v Blake Lapthorn [2006], the claimant sued solicitors and counsel for negligence after settling a traffic accident claim for significantly less than its value. Liability was divided between the two defendants, but a key issue was whether counsel’s refusal to mediate should impact the costs decision.

Despite encouragement from the solicitors and case management master, counsel resisted mediation, believing the claimant’s case was weak and that mediation would only add unnecessary costs. The court ultimately found that counsel’s refusal to mediate was not unreasonable.

Mediation and the Right to a Fair Trial

Jack J held that defendants should not be penalised on costs for refusing mediation if they believe the claim is overvalued. Forcing mediation might lead defendants to settle for more than they believe the case is worth, which would give undue leverage to claimants.

The judgment emphasised that mediation should not be mandatory, as that could infringe on the right to a fair trial under Article 6 of the European Convention on Human Rights. However, the case also highlighted that mediation could potentially save substantial costs if it helps parties reach an earlier settlement.

While mediation can lower expectations and facilitate resolutions, the court ruled that parties should not be forced into it, especially if the chances of success seem slim.

The Woolf Reforms and Mediation’s Adoption

By encouraging efficiency, proportionality, and ADR (notably mediation), the 1999 Woolf reforms intended to revolutionise civil litigation. Although mediation initially increased as a result of these changes, its adoption has stagnated and fallen short of expectations.

The judicial system in the UK is still competitive, and both the public and lawyers are reluctant and uncertain about mediation. The UK is lagging behind other nations, notably the US and Canada, where mediation is client-driven and integrated into the judicial system.

The Benefits of Mediation vs. Litigation

Mediation keeps relationships intact by giving parties authority over the resolution. It is speedier, less expensive, voluntary, and private. Litigation, on the other hand, is contentious, expensive, unpleasant, and often has unpredictable results.

For a quicker, less costly conclusion, mediation is chosen by many parties in dispute; yet, lawyers could challenge the choice in the hopes of setting a positive precedent in court.

Notwithstanding its advantages, mediation requires genuine engagement from all involved parties, and its success is contingent upon the mediator’s competence to enquire into inadequacies within a secure setting. Over 80% of cases mediated by ADR Group settle on or shortly after the mediation day, according to statistics that confirm its efficiency.

Early Neutral Evaluation (ENE), a different ADR procedure that has gained popularity, allows parties an unbiased assessment of their case. Unlike mediation, ENE consists of an evaluator (often a retired judge) who contributes in facilitating resolution by offering a non-binding judgement of the merits of the dispute.

The Future of Mediation in the UK

Despite its shown efficacy in several instances, mediation’s whole potential in the UK is still undiscovered, mostly because of deeply rooted adversarial tendencies.  However, since mediation delivers substantial time and cost savings, lessens the workload on courts, and encourages just and reasonable outcomes, it ought to be an essential part of the legal system. Widespread adoption would benefit and streamline the judicial system in the United Kingdom.

Higher Education Act: Labour Halts Freedom of Speech on UK Campuses

Article by Shiven Chudasama

In May 2023, the Higher Education Act passed through parliament and came into full effect on August 1, 2024. Some days prior to this, the appointed Education Secretary Bridget Phillipson, under the new Labour government, halted the policy in an attempt to repeal controversial powers.

In the initial Tory policy, the previous government intended to propose this plan to strengthen freedom of speech on UK university campuses. However, for the Labour Party, as a traditionally left-wing party with liberal motives, the democratic right of individual liberty and freedom seems too right-wing for the Labour.

What does this mean for the legislation now, and why is Labour repealing it? What does this mean for a UK student’s academic freedom? How might the law intervene to protect them?

Why is Labour repealing it?

One of the primary reasons according to Phillipson was financial, as well as the political nature of university campuses. If the Act were to be in place, and a case by a student was made against university staff or Student’s Unions (SU’s) as a violation of academic freedom or of freedom of speech, institutions may face heavy burdens in legal fees and financial compensation.

While this could potentially happen, such an extreme result seems unlikely. Democracy, and the academic freedom which follows, is a byproduct of living within a free and democratic nation like the UK. So, to some extent, the Act seems futile and attempts to politicise an institution independent of government.

Further, Phillipson argues that “For too long, universities have been a political battlefield”, using the apolitical argument that universities should remain objective of professional academic training. She regards the Act as enabling an increase in hate crimes, as it would permit making inflammatory remarks towards one’s identity and belief.

In closer partnership with the OfS (Office for Students), Phillipson will work with Universities UK to see a pause and a repeal of this legislation. But with the bureaucracy granted more power, and power being taken away from universities regarding their policies on academic freedom, is this a step forward in providing liberty to students on campuses, or just another instance of unjustified government intervention?

Academic Freedom and the Law

Academic freedom and its relationship to the law dates to 1988, a piece of legislation put forward by the third Thatcher government. The legislation clearly states the right to ‘question and test received wisdom and put forward new ideas and controversial or unpopular opinions without placing themselves in jeopardy of losing their jobs or the privileges they may have.’

So, the Higher Education Act seems like a quick move by the Tory government for some false action. The free flow of ideas, debate, and thought are crucial for discussion, progression, and cooperation in society. No free society is founded on linear thinking but only on the diversity of thought and ideology.

The recent changes concern many areas of law. Employment law may be the first area to become relevant, when firms and chambers seek to protect and defend university staff as well as students.

Moreover, if the issues reported escalate, the constitutional discussion on individual liberty and freedom may require the expertise of lawyers with public and administrative specialism. In the same vein, the point of defamation comes in through tort law if an academic staff member or student takes the case forward to protect their reputation.

Greenwoods LLP, a UK-based corporate and commercial law firm with a specialist in employment, advised universities and higher education institutions on how to prepare for the Act.

They advise higher education institutions to review governing policies and documents to ensure that circumstances regarding harassment at work and academic freedom do not overlap and interfere with the right to freedom of speech. This has generally been the recommendation of several other firms and organisations.

The OfS has been working on guidance points for academic institutions to follow, although this may have also been halted since recent news. Greenwoods’ article further examines non-compliance with the HE Act, explaining that issues regarding hate crimes and harassment, as well as calls for the cancellation of individuals, will result in more complex cases.

Conclusion

By repealing the Higher Education Act, is Labour demonstrating their low priority for academic freedom, over individual belief and feeling? Or are they simply keeping the politics away from academic institutions to retain their status as independent bodies?

Data breaches and cyber-attacks: Surprising complacency from the legal industry?

Article by Rajan Hothi

Data breaches have emerged as one of the most alarming problems for law firms in recent years. It has been found that 65% of law firms have suffered data breaches, a statistic made even more concerning by the fact that 35% of firms do not have cyber mitigation plans in place.

The findings signify that many law firms are not adapting to the modern-day problem of cyber-attacks and, in turn, the need for improved cyber security. There have been several high-profile data breaches, leading to law firms suffering grave consequences.

Notable instances of data breaches for law firms

Perhaps one of the most well-known data breaches suffered by a law firm in recent years was Kirkland & Ellis’ May 2023 breach. When advising on a Mergers and Acquisitions (M&A) deal, a data breach suffered saw the personal data of over 11,000 individuals impacted. Amongst the personal data was social security numbers and passport numbers, showcasing the gravity of these breaches.

Whilst these breaches are extremely problematic for individuals unlucky enough to have their data breached, they have also generated further problems for law firms. In the case of Kirkland, it was served with a class action lawsuit in the US over allegations that the May 2023 breach was not relayed to the claimants until October that year.

Therefore, it is evident that data breaches have significant repercussions for law firms. Not only are sensitive information compromised, but law firms are also opened up to potential lawsuits.

Are law firms prepared for data breaches?

With data breaches clearly presenting significant challenges to law firms, the expectation would be that firms are taking the initiative to guard themselves against this challenge. However, this has not proven to be the case. 65% of law firms have suffered a cyber incident, but Cert-UK found that an alarming 35% of firms do not have a cyber mitigation plan.

The statistics clearly showcase an alarming theme of complacency across the legal industry when it comes to data breaches. Despite proving to be extremely problematic and costly for law firms, a worryingly large number of firms have not implemented mitigation plans.

To make matters worse, cyber-attacks are developing in their complexity, meaning that cyber mitigation plans not only need to be implemented, but must be regularly updated.

AI tools and cyber-attacks

The use of generative AI in the legal industry has developed significantly in recent years. A 2023 Wolters Kluwer report found that 73% of lawyers were planning to implement generative AI into their work over the next year, showcasing the increasing desire for generative AI in the legal industry.

However, it has been noted that this lure for generative AI can result in further cyber-attack issues for law firms. James Doswell has previously suggested that whilst law firms would look to use generative AI to manage and analyse their security, attackers could attempt to train these security mechanisms for nefarious reasons. Consequently, it is key that law firms ensure that their AI implementations stand firm against attackers and cyber-attack attempts.

Why must law firms act now?

1.) Artificial Intelligence:

A 2018 report by the National Cyber Security Centre stated that 40 out of 100 of the biggest UK law firms used AI systems on active files, a number that would have no doubt increased since. However, potential threats emerge from AI systems.

The report noted that well-crafted phishing emails are an example of one cyber-attack mechanism that can result from AI implementation and growth. Therefore, the growth in implementation of AI by law firms can see novel cyber-attacks emerge.

2.) Law firms are attractive targets:

Law firms are likely to attract cyber-attacks due to the sensitive information they often work on. Firms that specialise in certain sectors, or represent certain clients, could be prone to cyber-attacks by individuals who hold a particular ideology.

Moreover, and likely a more common reason, many law firms hold a large amount of money. Law firms represent a more attractive prospect than many other industries for potential attackers, which increases the need for law firms to have strong mechanisms in place to mitigate the risk.

3.) Costs and reputational damages:

Cyber-attacks are not cheap for law firms. In 2022, it was estimated that the cost of a data breach in the UK was £3.36 million; however, due to the sensitive nature of legal work, this figure is likely even higher for law firms.

A Solicitors Regulation Authority report on 40 law firms found that £4m of client money was stolen from 23 law firms, resulting in 18 firms having to contribute £400,000 of their own money to cover the losses.

Whilst the financial consequences are extremely damaging, these firms will no doubt have suffered reputational damage which harms future business and relationships with existing clients. Therefore, it is clear that cyber-attacks and data breaches result in severe financial and reputational consequences.