LexisNexis

Legal and business news analysis - Global Insight December 2021/January 2022

Gig economy: Rider revolution forcing changes in legislation

Ruth Green, IBA Multimedia Journalist

As courts across Europe continue to grapple with employee classification rights in the gig economy, some jurisdictions are legislating in a bid to resolve this contentious issue in the food delivery sector.

In May, the Spanish Parliament passed legislation that compels food delivery platforms like Deliveroo, Uber Eats and Barcelona-based startup Glovo to classify all their riders as employees instead of self-employed freelancers. Companies were given until 12 August to comply with the new so-called ‘Rider Law’, which entitles riders to receive social security protections and other benefits like holiday and sick pay that are not normally afforded to self-employed workers.

The legislation was introduced in the wake of a Supreme Court judgment in September 2020, which ruled that riders for Glovo should be treated as employees. This decision followed a series of cases in Spain’s regional courts regarding the employment status of independent contractors working in the food delivery sector.

Apart from gleaning revenue from an increase in social security payments, the legislation was designed to prevent further litigation in this area, says Juan Bonilla Blasco, Co-Chair of the IBA Employment and Industrial Relations Law Committee and a labour and employment partner at Cuatrecasas in Madrid. ‘There was a misclassification case that went to the Supreme Court, but there were also tonnes of cases that were still looking to go to the higher-level court’, he says. ‘The government enacted this legislation to avoid thousands of cases that might come up in the future after the Supreme Court decision.’

However, Bonilla Blasco says it may prompt new claims over historic misclassification and is likely to lead to ‘significant business decisions’ for food delivery platforms. Deliveroo has already announced plans to exit the market. In a statement two weeks before the law came into force, the company said that ‘a disproportionate level of investment’ would be required to remain in a market with ‘highly uncertain long-term potential returns’. The company is undertaking an ongoing collective consultation process with its Spanish workforce.

The legislation requires platforms to be transparent with trade unions about the algorithmic formula they use to manage riders, assign orders and set fees for delivery services. However, there have been reports that some companies are modifying their algorithms to force riders into a bidding war over delivery fees. In September, Pepe Álvarez, the General Secretary of Unión General de Trabajadores – one of Spain’s leading trade unions – said the ‘need to regulate algorithms’ presented ‘a new challenge for the defence of workers’ rights’.

In late October, Portugal edged closer to approving similar legislation as part of a package of bills to regulate temporary and informal work, including via digital platforms and the gig economy. However, a week later Portugal's president announced plans to dissolve parliament after the national assembly rejected the government's proposed 2022 budget. The bill now awaits final parliamentary approval, which will only resume after the results of the general election on 30 January.

Like Spain’s Rider Law, if approved, the bill would bring another part of the workforce under social security protections, but there are concerns about its broader impact on Portugal’s employment landscape. ‘This will be left for the next government to legislate on,’ says Nuno Ferreira Morgado, co-head of the employment and labour practice at PLMJ Advogados in Lisbon, ‘but I can't exclude the possibility of many of these companies leaving the Portuguese market’.

He says there’s little market appetite for legislative change in Portugal, where to date there has been no contentious litigation in this area. ‘My concern is also that we don't actually need this legislation to apply the employment status to these employees because we already have the legislation in the Labour Code that covers all this and establishes legal presumptions sufficient enough to assess or assert whether or not these are employees or independent contractors’, he says.

Ferreira Morgado views the bill as an ‘imported trend’ from European countries like Spain and the Netherlands, where the growing litigation caseload has even prompted the European Commission to launch a public consultation on the ‘working conditions of platform workers’. He argues that, instead of enacting sweeping legislation, the UK’s case-by-case basis approach provides a ‘more balanced’ assessment of the needs of workers.

In June, Deliveroo General Counsel Chantelle Zemba told the IBA’s In-House Perspective magazine that she welcomed the UK’s Court of Appeal’s approach – which differed from other jurisdictions by classifying the company’s workers as self-employed. The judgment contrasted with a UK Supreme Court ruling four months earlier, which upheld a 2016 employment tribunal ruling that classified Uber drivers as workers, not self-employed contractors. Zemba says Deliveroo’s priority was about ‘operating the best model for our riders’ and ‘the model that gives them the most flexibility’. Many digital platforms suggest that workers relish the freedom of working flexibly.

Header image: MikeDotta/ Shutterstock.com


IBA Global Showcase presents diverse range of working sessions and expert interviews

Between 25–29 October, the IBA ran the Global Showcase – a series of high-profile expert sessions that discussed some of the biggest issues and challenges facing the global legal profession today.

This free-to-attend series highlighted the diverse work and achievements of the IBA’s membership in many key areas of policy and practice. The line-up included sessions specifically designed for key groupings within the membership. This was enlivened by a mix of interviews and discussions with leading commentators as well as plenty of opportunities for IBA members to network. In total, more than 2,300 registrants from 133 jurisdictions participated in the Global Showcase.

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The expert sessions included a Legal Practice Division showcase on ‘The role of corporate and government leadership in managing cyber risks’, which provided insight into the work of the IBA Presidential Task Force on Cyber Risks. Meanwhile, a session on ‘Lessons learned from Covid-19’ presented a constructive and vital assessment of Covid-19’s impact in key legal policy areas.

The IBA’s series of ‘A conversation with…’ interviews returned once more at the Global Showcase. Interviewees this year included Fawzia Koofi, the leader of a newly established political party called Movement for Change in Afghanistan, and The Rt Hon Lord Patten of Barnes CH, Governor of Hong Kong between 1992-1997.

Four annual IBA awards, supported by LexisNexis, were presented during the Global Showcase: the Outstanding Young Lawyer Award; the Pro Bono Award; the Outstanding International Woman Lawyer Award; and the Award for Outstanding Contribution by a Legal Practitioner to Human Rights.

Watch Global Showcase session recordings here


IBA Covid-19 Legal Policy Task Force releases report on optimising pandemic management

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In late October, the IBA Covid-19 Legal Policy Task Force released a report detailing the pandemic’s impact in key legal areas and providing concrete, actionable recommendations to improve pandemic management in the future.

The Task Force examined the impact of the pandemic on international legal systems, recognised the successes and failings of those systems in dealing with the outbreak and made practical guidelines for reforming existing laws or promulgating new legislation to improve the global response to pandemics.

Almudena Arpón de Mendívil, IBA Vice-President and a partner at Gómez-Acebo & Pombo in Madrid, co-chaired the Task Force. ‘At a time when more than five million people across the world have died from Covid-19, our new report goes beyond politics and makes suggestions to encourage the world’s policymakers to join forces to manage current pandemics and avert future ones’, she says. ‘Undoubtedly, as with many things in life, at the centre of a global response is law.’

Harry Rubin, Chair of the Technology and IP Transactions practice at Kramer Levin in New York, initiated the project. He says that ‘pandemics must be treated for what they are: border-defying existential global threats of the highest order. As such, they require a globally coordinated collaborative legal policy effort.’

Read the report here


Podcast: Focus on COP26

With the urgent action needed to address the climate crisis and the Covid-19 pandemic delaying 2020’s talks, the COP26 environmental summit in Glasgow in November was under close scrutiny. Shortly before the event, the IBA released an insightful podcast assessing the priorities, what might constitute ‘success’, and the long-term roles of both the state and the private sector in combatting the climate crisis.

The podcast featured David Boyd, UN Special Rapporteur on human rights and the environment; Kay Harrison, Climate Change Ambassador for the New Zealand Ministry of Foreign Affairs & Trade; Rick Saines, a partner at Pollination, a specialist climate change advisory and investment company; and Kelley Kizzier, Vice-President for Global Climate at nonprofit environmental advocacy group Environmental Defense Fund.

Listen to the podcast here

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IBA awards honour remarkable lawyers

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The IBA’s annual Section on Public and Professional Interest awards for exceptional contributions in the legal profession were virtually presented to the recipients during the Global Showcase event in October. The four awards are sponsored by LexisNexis.

The Outstanding Young Lawyer Award, in recognition of William Reece Smith Jr, was this year bestowed upon Michael Polak, a barrister at London’s Church Court Chambers and Director of Justice Abroad; the Pro Bono Award was presented to Geoff Budlender, a founder of the Legal Resources Centre, the first public interest law centre in South Africa; the Outstanding International Woman Lawyer Award, in recognition of Anne-Marie Hutchinson, was given to Beth Michoma of Kenya, who was recognised for her work advocating for the rights of women and girls and people with disabilities; and the IBA Award for Outstanding Contribution by a Legal Practitioner to Human Rights was jointly given to lawyers Ludmila Kazak and Maxim Znak of Belarus.

In November the IBA announced law firms Baker McKenzie, Clifford Chance, IMMMA Advocates and DLA Piper as 2021 winners of the IBA Group Member Awards for Europe and Africa. The awards were given in recognition of these law firms’ exceptional support and contributions to the work, projects, key objectives and aspirations of the IBA.

Baker McKenzie executed an extraordinary internal campaign promoting the IBA, highlighting the Association’s work in advancing the rule of law and tackling access to justice issues, Clifford Chance incorporated the findings of the IBA report Us Too? Bullying and Sexual Harassment in the Legal Profession into an internal diversity and inclusion campaign across its global network of offices, and IMMMA Advocates and DLA Piper co-sponsored and supported IBA events in Africa on harassment and sextortion, in particular raising awareness that sexual exploitation is a global issue woefully lacking representation as a criminal practice in law.

The awards were presented at the 4th London Law Firm Management Conference on Thursday 18 November 2021 by IBA Deputy Executive Director Tim Hughes.

Find out more about the SPPI Awards

Find out more about the Group Member Awards


New IBA report sets out principles for dealing with mental wellbeing crisis in the legal profession

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In late October, the IBA published Mental Wellbeing in the Legal Profession: A Global Study, a report identifying worrying mental wellbeing trends across the profession and which provides ten principles for legal workplaces and organisations to help address the crisis.

The report follows the first-ever global surveys examining the mental wellbeing of legal professionals at both an individual and institutional level. It draws on data collected from almost 3,500 surveyed legal professionals and more than 180 legal organisations.

The findings confirm, for example, that the mental wellbeing of legal professionals is a cause for global concern, and that the crisis has a disproportionate impact on women, young people, those who identify as an ethnic minority and those with disabilities.

The co-chairs of the Task Force that led the project – Steven Richman, a member at Clark Hill PLC, Princeton, and Deborah Enix-Ross, a senior advisor in the International Dispute Resolution Group at Debevoise & Plimpton, New York – stated: ‘The report is a call to action. It is our hope and intention that it will be used around the world to further the work of implementing practical solutions to what is a global crisis.’

The Task Force thanked the work of the IBA Legal Policy & Research Unit in conducting the international surveys behind the report.

Download the report here


Podcast: Sustainable mining

In this episode of the IBA Legal Policy and Research Unit’s (LPRU) Sustainable Law in Action podcast series, Jonathan Hoch, Head of Legal and Commercial at mining company Anglo American, speaks with the LPRU’s Sara Carnegie and Maria Pia Sacco about how Anglo American has become a leader in sustainable mining, with sustainability increasingly becoming a competitive advantage.

The conversation continues with IBA President, Sternford Moyo, who sheds light on the link between poverty, human rights and natural resources, highlighting the importance of engaging with local communities and rightsholders. Finally, Stéphane Brabant and Maria Angelica Burgos talk about the role lawyers can play in promoting ESG factors, the importance for CEOs in obtaining a social licence and the link between corruption and human rights violations.

Listen to the podcast here

Find out more about the series

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Brexit: UK assesses implications after failing to accede to Lugano Convention

Lucy Trevelyan

In late June, the European Commission formally blocked the UK’s accession to the Lugano Convention. The Convention would have offered a similar framework to the Brussels Regulation (recast), which ceased to apply in the UK post-Brexit. Both ensure that parties’ contractual choice of jurisdiction is enforced and that judgments from EU Member States’ courts are enforceable across the EU.

Commercial parties engaging in UK-EU litigation will now have to navigate the requirements of different national regimes on jurisdictional and cross-border enforcement issues. The 2005 Hague Convention on Choice of Court Agreements offers some protection to exclusive jurisdiction clauses, though not to any other kind of jurisdiction clauses. Whether it applies to contracts entered into before 1 January 2021, when the UK rejoined independently, is also uncertain.

‘The door is not yet shut on Lugano, although it seems that any chances of accession in the short term are slim to say the least’, says Elizabeth Williams, a partner at Simmons & Simmons in London.

Practical problems caused by the UK’s rejection will be added time and expense, and increased scope for error, says Lucinda Orr, Chair of the IBA Young Litigators Forum and a partner at Enyo Law in London.

Previously, if a defendant preferred to defend a claim in the UK, but was sued in an EU or Lugano state, it was reasonably certain the foreign court could be convinced to decline jurisdiction in favour of the UK, says Leigh Crestohl, a partner at Zaiwalla & Co in London.

‘Now, in the absence of any international obligations on foreign courts to decline jurisdiction in favour of the UK, UK parties litigating on the continent will be subject to the domestic private international law rules of the foreign court, as applied to any other third country’, he explains.

‘The delay and additional legal costs occasioned by satellite disputes over jurisdiction will be a significant risk to which parties in the remaining EU member states are now exposed when sued in England or, for that matter, suing a defendant in England that may have a compelling argument in favour of another forum’, adds Crestohl.

Jurisdiction clauses could be enforced via anti-suit injunctions, however. These are orders from courts or tribunals which prevent a party from commencing, or continuing, proceedings in a jurisdiction or forum other than that agreed in the contract.

‘The return of the anti-suit does offer some potential advantages to English litigants – eg, ensuring a contract setting out exclusive jurisdiction of English courts cannot be circumvented or undermined, and preventing abusive and vexatious proceedings from being issued in a foreign court, as well as enabling a pre-emptive strategic move of preventing enforcement of an overseas judgment’, says Orr.

Additionally, says Crestohl, international parties looking to litigate in the UK court may find it easier to do so than under the previous, rigid Brussels Regulation (recast). ‘Many may find that to be an advantage which outweighs the risk or costs of a subsequent dispute over jurisdiction.’

A party holding a UK judgment who now wishes to enforce it in a foreign state will have to comply with the rules of that foreign state which apply to any third country.

‘Where the holder of a foreign judgment seeks to enforce it in the UK, the procedure can be challenging’, explains Crestohl. ‘The UK has bilateral agreements with a small number of common law states which ease the process of enforcing judgment internationally, however this does not include any of the members of the [Brussels Regulation (recast)] regime.’

To enforce a foreign judgment in the UK at common law, a party will have to issue a fresh claim in the UK to sue on the judgment, but only judgments for a final and definite sum of money may be enforced in this way. This is not available for a judgment for a sum to be assessed, nor for non-monetary remedies such as an injunction.

The foreign judgment must also have been made ‘on the merits’, which excludes judgment given in default where a defendant has not engaged with the foreign court, says Crestohl. ‘It may be possible for the judgment creditor to obtain summary judgment once it has issued its UK claim, but there will always be more opportunities for a judgment debtor to raise issues and create delays.’

An alternative for the UK is to opt for international arbitration as a means of resolving international commercial disputes, given that arbitration is not affected by any EU rules.

‘Arbitration allows [parties] to have [English] law applied without having to be concerned about matters of jurisdiction in a private international law sense’, Crestohl says. ‘Arbitration awards are also readily enforceable around the world, since virtually all significant trading nations have signed the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958.’

In the future, the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, concluded in 2019, will, once ratified, establish an international framework for the recognition and enforcement of judgments.

Image: European Commission Headquarters building. symbiot/Shutterstock.com

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