Disputes Yearbook 2022: Technology disputes
As part of the acclaimed Disputes Yearbook, Legal Business interviewed members of our disputes team exploring the litigation landscape and what RPC brings to the table.
How would you describe RPC’s technology disputes practice?
It's booming. There is so much going on in the tech sector and in tech disputes at the moment and we're right at the forefront of it. We've been building our tech team for many years and everything is coming together. It's a really exciting time for RPC and everyone involved in tech.
We have a broad technology disputes practice, which sits within our market-leading TMT group. We look after everything across the transactional and advisory side, all the way through to the disputes side, whether that be Court proceedings, arbitrations, expert determinations, mediations, or trying to resolve issues before they escalate. That broad spread of technology work reflects the way technology just pervades everything we do now. In the past, TMT might have been a separate team that handled technology contracts for technology companies or their customers. Now of course technology impacts all clients and industries, and it’s a core part of RPC and what we do.
That breadth of practice and experience is also reflected on the disputes side. We have a fantastic team, a mix of home-grown RPCers and those from other firms who are attracted by the RPC culture, great clients and great work. We do lots of work with Big Tech companies, with the media industry (including data privacy-related work), in the retail and consumer sectors – with many technology companies now being very consumer-focused, and in insurance/financial services. Our work also covers what we might regard as the more 'traditional' technology work, such as tech projects, outsourcing and digital media, through to more recent developments, such as AI, cyber breach and crypto-related issues. As you would expect, much of our work is international and there is a growing focus on regulation.
What have been the growth areas for the technology disputes team over the last 12 months?
As mentioned, there is lots going on at the moment, but there are a few areas of very significant growth that I would highlight. In Big Tech, we are seeing increasing regulation in the sector across multiple jurisdictions, including on competition, data and consumer issues and that in turn is driving related litigation. In the UK, we see that particularly in relation to collective proceedings and other group actions.
There's a huge amount of regulatory scrutiny in the technology sector. Looking at the Competition and Markets Authority (CMA) in the UK, you see how active they have been, not only in relation to Big Tech, but many other consumer-facing technology companies. There are similar approaches being taken in many other jurisdictions, including the EU and the US, and increasing coordination between regulators.
'Follow-on' damages claims, for instance, after a competition regulator finding, are well established, but we are increasingly seeing related claims against the background of regulatory review. For example, we are instructed on the Google Play UK litigation, both in respect of the claim brought by Epic in relation to its Fortnite game and the prospective UK consumer class action brought by Ms Coll - both are in the UK's Competition Appeal Tribunal. The Merricks decision has led to a huge growth in UK collective proceedings, which is particularly relevant for consumer facing tech businesses.
Data privacy continues to be a very active area notwithstanding the outcome of Lloyd v Google. We acted for techUK, as one of the successful third-party interveners in that case, but notwithstanding that decision there's still active litigation going on in the data privacy field and I think that will continue. Our 24/7 award-winning cyber breach response service, which has now handled in excess of 500 incidents, also continues to grow year on year.
We are also increasingly active on crypto issues and we see this as one of the areas that will be very busy in the coming months and years. RPC is one of the founding members of CFAAR, the leading crypto-fraud and asset recovery group, that was founded with a number of law firms and other professionals last year. We also expect to see a new wave of ESG-related disputes, and this will include tech disputes where technology investments and projects are being deployed to meet ESG goals.
What is the impact of the Lloyd v Google decision on data privacy litigation?
This was obviously a keenly-awaited decision and the big question was whether this was going to open the floodgates for representative actions for misuse of data claims. Lloyd v Google judgment firmly rejected the basis of this class action and the concept of "loss of control" damages under the relevant legislation, an outcome that was warmly welcomed by data controllers - including the UK tech sector, as well as the insurance market - who were exposed to very significant potential liability arising from data claims. That probably means we will not see representative actions in that form being brought before the UK courts and a number of related claims were discontinued following Lloyd. That said, we do know that claimant law firms and litigation funders are looking at alternative ways to bring these types of data claims and we continue to advise on such matters.
There are also a number of very significant privacy-related disputes still going on. A lot of that work has arisen in the media sector. RPC, which has the leading UK media defendant practice, has a huge amount of experience in that space. We continue to be instructed on phone hacking litigation and also acted in the recent Supreme Court case ZXC v Bloomberg. These data privacy/misuse of private information matters, while they are primarily in the media sector, will continue to inform how these will be tested in the tech sector.
What is driving the focus on privacy and data protection matters in the tech space?
Some of it is as a result of regulation, some of it is the nature of the business models. We are all so used to receiving free digital services and in return we make certain data available to technology companies. Because some of these technology businesses have very successful products and services, and large numbers of users, they have access to large amounts of data. There is also increased regulatory scrutiny on user data, and how that interacts with competition and consumer protection issues, particularly in the UK and the EU.
We also have a very active disputes and litigation funding market in the UK at the moment. For example, the recent proposed UK consumer class action against Meta characterises the use of personal data by Facebook as an abuse of a dominance competition claim to bring the claim within the UK's collective proceedings regime. That is only possible because of these litigation funders, who are prepared to come forward and fund these claims because when you aggregate the UK consumer claims together, it creates a sufficiently high-value claim that is worth funding. So, it's all of those factors coming together: increasing regulation, the nature of these 'one to many' business models, an opening up of the collective proceedings regime post-Merricks, and the backing of litigation funders, all of which drives this focus and major litigation that's coming down the track.
Do you think we will see more of these cases repackaged after Lloyd v Google to fit, for example, into competition actions?
Yes, we think so, because Lloyd v Google was brought under a CPR 19.6 procedure and the decision on the relevant data legislation makes future claims on the same basis more difficult. Although there are a number of ways to deal with Lloyd, such as the suggestion of a bifurcated claim where you seek to establish liability and then assess damages afterwards, that doesn't seem to work for litigation funders.
So, we might well see Meta as a test case for whether such data claims will be certified and can be pursued on that basis.
We do think that we will see a lot more of collective proceedings generally, because the procedure and the calculation of aggregate damages are more attractive to a representative claimant and the litigation funders than the CPR 19.6 approach, at least as the law currently stands.
What has been the impact of COVID on tech disputes?
The tech sector, generally, is booming. That drives more investment in tech and in turn that means that sometimes investments do not pay off.
We are seeing a huge amount of investment in tech, including the adoption of new technologies and new platforms where infrastructure needed to be upgraded. Many of those projects go very well, but some will not. When they don't go well, that obviously drives traditional tech disputes relating to failed projects and implementation. A lot of those issues and disputes are still around, particularly in sectors which perhaps were a more behind the curve on their tech investment.
In some sectors, we are seeing that the pandemic has been a catalyst to bring a lot of this technology investment forward. So in an industry that we at RPC know very well - the insurance sector - we are seeing a huge amount of investment into technology from the large, incumbent businesses, and also from insurtechs, start-ups and the like.
What have been some of the biggest regulatory changes over the past 12 months?
On Big Tech, we are seeing legislators and regulators, particularly in the EU, UK and the US, becoming much more active, not just on competition issues, but also on data and consumer issues. In the UK, the CMA has announced that it will be setting up a Digital Markets Unit (DMU), although it is waiting for statutory enactment. The Online Safety Bill is also currently before Parliament.
In the EU, the European Parliament and Council have reached provisional agreement on the Digital Markets Act (DMA) last week. Agreement on the Digital Services Act (DSA) is expected shortly. The EU is also increasing consumer protection through the 'Omnibus Directive'.
We're seeing a number of regulators and governments at the same time say: "This is an area we need to regulate more." We're also going to have the added complications of the UK going its own way to an extent after Brexit. It certainly appears that we will have a much more regulatory interventionist approach. Whether or not this will in fact benefit consumers or improve the UK and European tech sectors remains to be seen, but it is likely to drive further follow-on and related claims concerning competition, data and consumer issues in the tech sector.
Have you seen an increase in technology companies using international arbitration over litigation?
Yes, arbitration is certainly a real growth area for tech disputes and it is something that we see a lot of – not just out of our UK offices, but also out of our offices in Singapore and Hong Kong, which are hubs for technology disputes and arbitration in Asia. Often these larger tech projects are international in scope, so arbitration is well-suited to resolve those disputes. This also means that our arbitration and technology disputes specialists can work alongside each other and local lawyers to support the arbitration, wherever the venue and whatever arbitral rules apply.
We also find that arbitration is particularly attractive for the larger suppliers and some customers, because if there are any difficulties with delivery of the project, it's confidential, so you are not airing your dirty linen in public through the courts. We also see alternative jurisdiction provisions where appropriate - for example, problems with project delivery might be subject to arbitration, but if there is a simple payment dispute this may subject to court proceedings.
What distinguishes RPC from other firms?
We have a really strong team and a very open, collaborative way of working. That means that our technology disputes practice benefits from the fact that RPC is a full-service firm, with a real focus on tech. The way the technology market is moving also plays to our strengths.
We're a leading technology firm; we've been recognized as Legal Business' TMT team of the Year two years running in 2020 and 2021. We are a leading disputes firm of course – we were listed as the top defendant law firm of 2021, with the greatest volume of defendant actions in the UK High Court among all law firms. We have the joint most 'Cases of the Year' over the last 3 years, and are in the top 5 firms for overall days in the UK Courts since January 2020. We are also the leading UK media defendant firm, which brings in all that data privacy experience, and we have almost twice the number of court days in the Media and Communications List compared to any other firm.
We are also a leading consumer and retail firm, which we have done for years. When many of the large firms left consumer behind because it wasn't lucrative enough for them, we remained as one of the leading consumer, advertising and marketing firms. That market-leading consumer work, which we've secured from working with all these leading brands over the years, and all of the consumer regulation work that we've done, is now hugely valuable, because you need to understand the consumer landscape to do this litigation work well.
We've worked with litigation funders, both for and against them, for years. This has included on claims against the investment banks where we've acted with litigation funders, but also where we've defended some of the biggest group litigation in the UK courts, such as the Ingenious film finance litigation.
We've got all that experience, both from the disputes side, but importantly also from the advisory side, that most firms just don't have. The litigation boutiques do not have that rounded full-service technology and commercial offering, while the larger firms do not have that depth of day-to-day consumer work and specialist data privacy experience that we've got. So we have a really good mix of experience and expertise, which provide a great fit to the current trends in tech disputes.
This interview was first featured in the Legal Business Disputes Yearbook 2022.