Legal and business news analysis - February/March 2018

Dubai moves to disrupt legal culture with future courts

Emad Mekay, IBA Middle East Correspondent

It’s not every day a court adopts the lingo of disruption more often associated with Silicon Valley startups. It’s even more surprising in the often stagnant and restrictive Middle East. But the Dubai International Financial Centre (DIFC) is launching ambitious plans to set up the first ‘Court of the Future’, a model whose proponents say will forever change the way commercial courts do business.

‘Courts have not been disruptive. We need a disruptive court,’ says Mark Beer, Chief Executive and Registrar General of the DIFC Courts. ‘We’ve got to break free from the atmosphere that we live in, thinking what we designed 200 years ago is right for today or tomorrow.’

What Dubai wants to do is combine the use of extensive technology to deliver justice more efficiently with pioneering court decisions that deal with commercial disputes arising from new, and often largely untested, technology. 

The final shape of the court is yet to be finalised. But the city-state of Dubai in the United Arab Emirates is brandishing its business-friendly credentials to ask for groundbreaking ideas that may help put a form to the ambition through an open-source forum. Consultations are being solicited from lawyers, technicians and entrepreneurs.

The 15 members of the Court of the Future are due to meet to review the body of information they collected. They will then share the results with other international courts.

By leading internationally, the image-conscious nation hopes to bolster its ranking in the World Justice Project Rule of Law Index over the next four years, and take stock from billions in new government investments that will go to innovation in the Arab emirate.

‘The young nation is doing what young people do, which is use the technology smartly, not regionally but internationally, creating the courts of the future,’ says Diana Hamade, Dubai-based Membership Officer of the IBA's Arab Regional Forum. ‘Things have changed dramatically in such a record time, and the future courts will deal with what commercial law now has to deal with, online commercial disputes and technology disputes.’

The effort is happening against a background of a much wider government-funded push to turn the UAE into an innovation hub with hundreds of millions of dollars in investments coming from the government. Dubai, one of the seven emirates of the UAE, recently said it’s revamping itself as a global venue of future innovations and hopes to complete its transformation by 2020. ‘We have been launching tech initiatives in Dubai and lots of money has been invested. The courts will not be the first and I personally see the value,’ says Hamade, who sits on some panels on the DIFC court.

The country has hired Microsoft to set up technology infrastructure in areas like registrations, filings, case management, and even trials. The aim will be for commercial dispute resolution to keep pace with a new ‘digitised, connected and virtual world’. According to the plan, court services, for example, can be ordered through social media or e-messaging platforms. Hearings will be held remotely, with video links to plaintiffs, witnesses and police officers.

More than anything else, proponents of the court aim for it to be recognised by international companies as the main setting for resolving issues posed by new innovations. Potential disputes as to who is liable for decisions made by artificial intelligence and robotics applications will come under the court’s jurisdiction. 

The court will answer questions arising from technology handling due diligence and will rule on liability in 3D products and regulations for the use of unmanned systems such as drones and driverless cars, as well as blockchain and its uncertain implications on legacy businesses. Dubai says it wants to put all its public documents on blockchain by 2020 and is likely to face legal questions as it does so. 

Reports of the project have generated enthusiasm locally and internationally. ‘The Courts of the Future Forum is a forward-looking effort to ensure the court system is prepared to address issues raised by the development of new technologies,’ says Dale C Van Demark, Vice-Chair of the IBA Intrusive Technologies Subcommittee. ‘If effective, this should result in greater certainty for business and the legal community that the court system will effectively evaluate these issues.’

Experts acknowledge that the plan raises interesting questions such as how justice will be defined where technology has been fully deployed to resolve disputes. The same concern stands with ‘integrity’ – a concept held dear by most people in the legal profession – and whether one could practically codify ‘integrity’ in technology.

Hamade says humans will still be the real power behind the system. ‘Technology will provide the system, but again it is humans who will feed it the rules and procedures to apply it,’ she says. ‘Same goes for integrity, and I think systems may have the integrity better than many judges if it is fed the info properly.’

Van Demark tells Global Insight it was important to make a distinction between competence and speed that technology can bring on the one hand, and legal decision-making by technology on the other. ‘Automation can help create efficiencies, but judicial or tribunal decision-making in the hands of artificial systems raises significant issues – the comfort we, as individuals, have in referring decisions to automated systems; the quality of the systems, considering the data that they use or have access to; and the ability to ‘check’ those systems,’ he says. 

‘Artificial intelligence systems do face an integrity issue, depending on the use case. The concern comes from the quality of the data being utilised, the quality of the training of the system, and the maintenance, possibly, of the system. Codifying integrity into these sectors will require thoughtful and creative analysis – which the Forum may be in a position to begin.’

Law firm diversity policies ‘found to be wanting’

YOLA VERBRUGGEN

A groundbreaking report by the IBA’s Legal Policy and Research Unit (LPRU) calls on law firm management to take ownership of diversity policies, which it says ‘have been found to be wanting’, and to ensure that law firm structures are subject to review.

Nearly 6,000 women and men responded to a global survey exploring why women continue to face barriers to the most senior positions in commercial law firms.

The resulting report, Women in Commercial Legal Practice, states that the term the ‘feminisation of the legal profession’ is both a misnomer and misleading. While for some years, women have outnumbered men in law schools, their representation as equity partners in law firms is often less than 20 per cent.

Carolina Zang, a managing partner with Zang, Bergel & Viñes Abogados and Chair of the IBA Law Firm Management Committee Projects Working Group, says: ‘Some firms still have to understand the enormous value women can bring and deliver, and we need as many allies as possible to make this happen at all levels… we must recognise all voices all of the time, especially as we strive to be more authentically inclusive.’

‘Diversity policies, introduced ostensibly to help women in the workplace, after 30 years have been found to be wanting. This is hardly surprising given they were designed to address the problem of women, not the workplace,’ says the report. Diversity policies ‘are designed to help women – and others – fit into the existing workplace, rather than reviewing the structure of the workplace that exists to identify inbuilt discriminatory barriers.’

Though flexible working arrangements are available in most law firms, the LPRU report shows that women and, to a lesser extent, men are afraid that asking for flexible working might damage their career prospects. Women also said they often do not feel supported by clients, colleagues and management.

The report also sets out proposals to improve the retention of women lawyers. For example, to ensure the advancement of women in commercial law firms, sponsorship is essential, says Jane Ellis, Director of the LPRU. ‘The process for initially joining a law firm is reasonably transparent and, once you’re in, mentorship helps you navigate a law firm and the profession. Sponsorship, however, is even more important to career progression in a firm,’ she says.

‘Unfortunately, the sponsorship process is less formal and more opaque. Senior lawyers often identify with younger lawyers if they recognise themselves in them and that usually means senior male partners relating to younger men, and sponsoring them instead of young women.’

Equal opportunities for women to progress in law firms is not just a moral obligation, but there is a compelling business case as well, says Alexander Schwarz, Co-Managing Partner with Gleiss Lutz. ‘It is not only about better teams or a question or fairness, there is also an economic argument. We cannot go on like this. We are losing so many women on their way into partnership or counsel. We need to be better in keeping women with us,’ he says.

The research also found ‘alarming levels of bullying and intimidation’ in a profession that prides itself on upholding the rule of law and justice. About 50 per cent of women and 30 per cent of men said they had experienced either bullying or intimidation. Compared to other regions, this issue affects women in Africa the most, as does discrimination based on ethnicity.

Of the female respondents, 67 per cent said they experienced discrimination based on their gender, as opposed to ten per cent of men.

Sexual harassment and discrimination due to family responsibilities were also significantly higher with women.

In its final recommendations, Women in Commercial Legal Practice calls on law firm management to take ownership of diversity policies and ensure that law firm structures are subject to review, because ‘such an approach is critical to identifying the structural barriers that impede the progress of women – and others.’

View the report. It will be launched at 18:00 on 21 March at Norton Rose Fulbright in London, where a distinguished panel will examine the report’s key findings, followed by networking drinks. To register your attendance, email LPRU@int-bar.org

In memoriam – Jan van de Ven

Jan van de Ven, who was Chair of the IBA Section on Business Law – the precursor of the Legal Practice Division – between 1984 and 1986, passed away on 10 December 2017, aged 87.

Jan was a giant in many senses. He was 1.98 metres tall and had an impressive voice. ‘Inside, he was all disarming carefulness and bigheartedness,’ says Willem Calkoen, who served as Chair of the Section on Business Law in the mid-1990s.

Van de Ven chaired the Business Organisations Committee in 1976 for three years, before becoming Secretary of the Section for 1980–1981.

But it was as Chairman of the Section that he made arguably his greatest impact, overseeing a maturing of the business committees and structural changes that benefit the IBA to this day.

‘IBA members knew Jan as direct, emotional, highly involved, socially minded and visionary,’ says Calkoen. ‘In 1986, he discussed with the Chair of the then Section on General Practice that the two sections might merge. This finally happened 18 years later with the formation of the Legal Practice Division.’

A Review Committee which van de Ven headed from 1983 has a lasting legacy. It highlighted, for example, the need for ‘fresh blood’ on committees and also called for increased opportunities for member participation.

He was also the first Section chairman to organise a conference in the Far East. This was the 7th Biennial Conference held in Singapore in 1985. The IBA extends its sincere condolences to van de Ven’s colleagues, friends and family.

Podcasts: Julian Assange on Russiagate and the ICC’s role in global justice

In the first of two new IBA podcast releases, WikiLeaks founder Julian Assange rebuts suggestions that he was involved in collusion between Russia and the Trump campaign.

With Special Counsel Robert Mueller's inquiry into 'Russiagate' intensifying, Assange defends the decision to leak thousands of Hillary Clinton's private emails ahead of the US elections.

He also attacks the corrosive nature of mainstream media reporting, and explains why all judicial systems have their breaking point.

The second new podcast assesses the achievements and challenges of the International Criminal Court (ICC) in bringing an end to impunity for atrocity crimes.

ICC President, Judge Silvia Fernández de Gurmendi, Chief Prosecutor, Fatou Bensouda and Registrar, Herman von Hebel (pictured) examine the ICC's global aspirations, its focus on the rights of victims to participate and seek reparations, and the threats by some states – including major powers – to withdraw or pull back their support.

Fifteen years on from its inception, the court has so far indicted more than 40 individuals for genocide, crimes against humanity and war crimes.

View the new releases and the IBA’s full podcast offering

US presidency: Can the green rollback be rolled back?

Michael Goldhaber, IBA US Correspondent

President Donald Trump announced last autumn that America’s Environmental Protection Agency (EPA) aims to rescind its Clean Power Plan rule. It was intended to be the linchpin of America’s compliance with the Paris Climate Agreement, though the legislation is yet to take effect. Environmentalists, not just in America but globally, are hoping the courts can save the plan.

The key question is whether the seminal legislation – the Clean Air Act, which dates back as far as 1963, and has received thorough amendments in 1970 and 1990 – permits the Clean Power Plan’s creation or destruction.

This question is already being litigated in the DC Circuit Court of Appeals by the Trump administration and a group of fossil fuel-friendly states headlined by West Virginia, versus a coalition of green non-profits and pro-regulatory states led by New York.

But, President Trump’s lawyers have asked the DC Circuit to stay this case until the EPA actually rescinds the Clean Power Plan.

In the meantime, two schoolboys and a green non-profit, represented by the renowned anti-cartel lawyer Michael Hausfeld, have stepped forward with a bold strategy.

In a suit filed in Philadelphia for the Clean Air Council, Hausfeld argues that President Trump’s rollbacks of global warming policy violate constitutional rights to the enjoyment of life and property, as well as violating the government’s duty as a ‘public trustee’ to protect natural resources.

‘We want the court to officially recognise the due process right to a life-sustaining climate,’ says Robert Routh of the Clean Air Council. It should declare that ‘the government can’t undermine the modest protections we currently have’, and broadly recognise ‘the need to use good science in rulemaking’.

In contrast to the DC Circuit Clean Power Plan suit, ‘we’re not looking at one act in isolation,’ says Hausfeld. ‘We’re looking at the aggregation of cumulative acts that are being taken to minimise scientific understanding and [to slow] the advancement of the United States to prepare for climate change.’

Hausfeld’s suit also seeks to enjoin the Trump administration from any future rollbacks of climate change policy. That might, for instance, cover a loosening of fuel standards, a reconsideration of the finding that global warming endangers public health, or the promised withdrawal from the Paris Climate Agreement.

The Philadelphia children’s suit broadly resembles a 2015 climate action filed by children in Oregon known as Juliana v US. Each invokes due process and public trust to attack global warming policy. But, while the Oregon plaintiffs argue the government has an ‘affirmative duty to protect,’ says the Clean Air Council’s Joe Minott, ‘we argue there’s a duty not to endanger – not to undo what’s already in place’.

Hausfeld elaborates: ‘Both deal with climate change, with whether what is being done is sufficient,’ he says. ‘Juliana is looking at what’s been done over the past half-century and saying it’s not enough. We’re looking at a short period of history and saying, “Wherever we were on 20 January [2017], that was the floor. If you go beneath that floor without anything but junk science to support it, you’re increasing the dangers.”’

In seeking to persuade courts to take the momentous step of protecting the climate through constitutional law, the Philadelphia strategy claims two advantages. First, the US has a long line of jurisprudence on the inadequacy of junk science in the context of excluding evidence at mass tort and antitrust trials. The complaint notes that the US government acknowledged global warming as early as 1965, and the plaintiffs aim to expose the EPA’s unscientific basis for its rollbacks through document discovery.

Second, US courts are historically loathe to force an agency to go further when it is already moving forward. Courts tend to be more comfortable prodding regulators when they are either standing still or moving backwards. In short, Hausfeld believes that ‘it’s a clearer, more forceful claim when the government affirmatively acts to place people in danger – particularly based on junk science’.

John Cruden is President of the American College of Environmental Lawyers and served as Assistant Attorney General for the Environment and Natural Resources under both President Barack Obama and President George W Bush, leading on both the Deepwater Horizon and Volkswagen litigation.

Though describing himself as ‘very sympathetic’ to their suit’s goals, he views the strategy with scepticism. ‘This case and Juliana both have a positive effect in the sense that they focus people’s attention on important and vital issues, though I frankly don’t expect either case to be successful,’ he says.

Cruden says Clean Air Act rules can only be challenged in the DC Circuit under the terms of the statute. While Cruden agrees that courts are generally bolder when the EPA has failed to act, he thinks it essential that each statute in question has imposed a responsibility to act. A broader ground for decision is unlikely, he says, because the courts have squarely rejected the idea of a federal public trust doctrine, and the current Supreme Court is highly unlikely to embrace a new constitutional right to a clean environment.

For his part, Hausfeld believes that the deepening of an existential climate crisis obligates advocates to think outside the box, and judges to rule creatively. That the plaintiffs will face Republican-appointed judges leaves them unperturbed. Global warming ‘is not a Democratic or Republican issue,’ says Minott. ‘Most Republicans are fully cognisant of the science.’