| Hello and welcome to The Global Lawyer!
I’m Krishnan Nair, deputy editor at Law.com International - one of a team of editors along with Paul Hodkinson and Lisa Shuchman bringing you aweekly summary of the important news and trends affecting the global legal industry.
Law.com International continues to grow and is now producing more content from around the world than ever before. Not all the coverage can be packed into this briefing so visit our site to see the full range of stories from Asia Pacific, Europe, Latin America, Middle East and Africa, North America and the U.K., written by correspondents in each region.
This week, I'm talking about:
- The European Union's landmark court battles with Apple and Facebook
- The major disputes breaking out across the world
- What firms are doing to survive the economic downturn |
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| Tech Tussles
Two of America’s great tech titans, Apple and Facebook, battled the might of the European Union in two landmark cases, whose outcomes will have ramifications for hundreds of thousands of businesses worldwide. But while Apple will be cracking open the champagne, having saved itself from a €14 billion tax bill, Facebook will have no doubt deployed all its legal and compliance armoury to get to grips with a decision that has all but upended U.S.-EU data relations.
Apple is no stranger to great big multi-billion dollar disputes. And they don’t come much bigger than last week’s hearing, the culmination of a four-year legal tussle between the tech behemoth and the European Commission. Our new Brussels correspondent Linda A. Thompson reports how the EU’s second highest court ruled that a tax deal struck between Apple and Irish tax authorities - almost two decades ago - did not violate EU state aid rules.
To put this into simpler terms, it means that Apple will not have to pay a €13.1 billion tax bill (with €1.2 billion in interest) to Irish tax authorities. The decision will have caused some embarrassment to the Commission, which made the order back in 2016—at the time chronicled as a rare example of a state authority strong-arming a major multinational. It also marked a major victory for Apple’s lawyers, Freshfields Bruckhaus Deringer.
In her second major story of the week, Linda writes about the European Court of Justice striking down the ‘Privacy Shield’—a major data protection deal agreed between the U.S. and the EU just four years ago. This all but ends the EU’s special data relationship with the U.S., to which, under the shield, it granted privileged access to EU customer data. But with the shield lifted, some 5,000 U.S. companies, including Facebook, now find themselves on the same flat footing as any other non-EU entity.
Teasingly, the court did afford a silver lining, allowing U.S. companies to continue to lawfully transfer European customer data to other parts of the world. Still, for Facebook, it all means more head-scratching—or in other words, more money on legal. |
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| The World at War
‘Counter-cyclical’. ‘Inversely proportional’. Just a couple of examples of the terms applied to the disputes world. As we all know, in times of great strife, there is always an uptick in work for disputes lawyers. And though the Apple and Facebook litigations certainly top the billing, there were legal clashes around the world, no less heated and, arguably, just as consequential.
Our South Africa correspondent Jennigay Coetzer writes about the ages-long dispute between Ethiopia, Egypt and Sudan over a $4.5 billion dam known as the Grand Ethiopian Renaissance Dam, designed to control the flow of the gigantic Nile river which both Egypt and Sudan depend on for their water supply.
But the dispute turns on who owns the water and what legal recourse Egypt would have if its water is cut off or severely restricted by the filling of the dam. Sadly, with the warring factions no closer to reaching a ceasefire, it seems the dispute is set to roll on for years longer, leaving in its wake yet more political and economic turmoil.
Indeed, court battles are more often than not bitter, exorbitant affairs. That’s why, with increasing regularity, parties are turning to arbitration—generally viewed as litigation’s more sober sister, where costs are lower, decisions are always binding, and crucially, onerous courts are avoided.
But even on this more serene plane, there is fierce competition over which jurisdiction can claim dominion over all others. London, New York, Paris, Singapore and Hong Kong have established reputations as destinations of choice for arbitrating parties. But, our Middle East correspondent Peter Shaw-Smith asks, could the United Arab Emirates soon be the global frontrunner?
With huge willingness, and seemingly fathomless cash reserves, the UAE is helping the Middle East establish itself among the elites of world arbitration, anchored in a willingness to be open and competitive, and amenable to adopting established international protocols.
Elsewhere in the world of disputes, Freshfields Bruckhaus Deringer successfully overturned a multi-million pound fine and a two-year ban levelled by the Union of European Football Associations (UEFA) against English football club Manchester City. And in the latest instalment of a near-decade long dispute, Dechert agreed to pay the Eurasian Natural Resources Corporation (ENRC) £225,000, after both sides reached an agreement regarding document disclosure on their long-running dispute. |
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| Surviving the Downturn
The pandemic continues to grip nations and lives everywhere in the world. And, as the ground shifts beneath their feet, businesses of all sizes and shapes are striving to regain their footing. In the legal world, as in the wider business world, this translates as personnel cuts, closing offices, and cutting pay.
This week, U.K. reporter Meganne Tillay got the scoop on transatlantic law firm Bryan Cave Leighton Paisner cutting 40 lawyer and staff positions across its global business, but softening pay reductions so that lawyers and staff earning $40,000 and will see a 7.5% haircut.
The development also sees BCLP shut its, albeit small, Beijing base, which comprises one partner and two associates.
And what’s provoking this drastic action? Well, one cause, as we wrote about last week is declining M&A activity. But, it seems, clients are also being careful with legal spend and even typically spendthrift private equity firms in both the U.S. and U.K. plan to cut their legal bills, according to a survey of in-house counsel.
U.K. reporter Hannah Roberts explains that, alongside the drop in M&A, the pandemic, and dwindling fundraising deal volumes, improved procurement skills, and a desire for greater billing transparency have induced such firms to slash external legal costs.
We’re seeing business after business fall victim to the pandemic. But perhaps the worst hit industry is aviation. Amid the news that British Airways is retiring its entire fleet of iconic Boeing 747s, and that plane manufacturer Airbus is to cut 15,000 jobs, beleaguered airline Virgin Atlantic may be on the cusp of a £1.2 billion rescue deal, assisted by Allen & Overy.
And just as we’re seeing light at the end of this lockdown-shaped tunnel, it blinks away again. In Australia, a second wave of outbreaks put paid to any return to work plans.
Our Australia reporter Christopher Niesche writes that local and international law firms have pushed back their plans to reopen their Melbourne offices as the southern Australian city battles a resurgence of COVID-19 virus. |
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