Publications

In recent years, construction and engineering businesses have faced a whole storm of headwinds. CMS, in partnership with YouGov, asked in-house lawyers about the biggest challenges of managing disputes in this environment - and how those challenges can be met.   Sixty-second summaryThe evolving nature of construction risk will see changes to standard contracts and negotiation positions. It may also bring more disputes, particularly where those changes lag behind project realities. Fewer than half the businesses we surveyed reported that the in-house legal or contract management team is always consulted at the start of a project to identify areas of risk and to establish appropriate risk management strategies. Most in-house lawyers believe their businesses could improve the way in which risk is managed during projects - often in a number of important ways. Despite the potential benefits, only 17% of the in-house lawyers we surveyed are using AI in disputes or contract management. Some say they will never use it. Most in-house lawyers believe their businesses have a lot of scope to improve the way that project risks are managed. AI has the potential to be a game-changer in this area by optimising processes, planning, scheduling and other elements of case management and by revolutionising the way a business handles its portfolio of contracts. 

The CMS Data Protection Group is pleased to launch the 5th edition In the six years since the GDPR came into force, this powerful framework to protect personal data has certainly helped to raise awareness and encourage compliance efforts – just as the European legislator intended. At the same time, the risk of fines of up to EUR 20 million or 4% of a company’s global annual turnover can also lead to fear and reluctance or ignorance about compliance issues. We still believe that facts are better than fear. This is why we continuously update our list of publicly known fines in the GDPR Enforcement Tracker and established the GDPR Enforcement Tracker Report as an annual deep dive approach to provide you with more insights into the world of GDPR fines.

Hypothesis: Tribunals generally have the power to make early determinations, but are reluctant to do so because of due process paranoia  Recent years have seen many arbitral institutions update their rules to include procedural mechanisms aimed at increasing efficiency in arbitral proceedings. Efficiency is often held out as one of the advantages of arbitration over litigation, both in terms of time and cost, but effective procedural tools are essential to ensuring that arbitration maintains this ‘edge’ over litigation.  One such tool is an 'early determination' pro­ced­ure. Based on our own experience, and in light of the considerable focus in recent years on the issue of ‘due process paranoia’, we hypothesised that tribunals generally have the power to dispose of cases at an early stage, but are reluctant to do so. In order to investigate our hypothesis, we analysed the rules of 29 arbitral institutions from around the world. Our results are below, together with our views on what the results of that analysis mean for arbitration’s promises and aspirations as to efficiency. Results: the rules of the majority of arbitral institutions do not explicitly empower tribunals to make early determinations of an entire claim or defence An ‘early determination’ or ‘early dismissal’ procedure allows a tribunal to reject unmeritorious claims or defences at an early stage of proceedings, avoiding the wasted time and cost of pursuing and defending matters that need never see a final hearing. Given the widespread adoption of summary judgment procedures in court processes, particularly in common law jurisdictions, the inclusion of early determination procedures in arbitral rules is crucial if arbitration is going to go toe-to-toe with litigation in the efficiency stakes. Only 9 of the 29 arbitral institutions we considered have an express early determination provision in their rules allowing for summary disposal of an entire claim or defence.[1] Our analysis shows that the rules of these 29 institutions broadly fall into four categories: 

Consumer brands and retailers are moving through a transformative era marked by significant macroeconomic challenges, rapid digital evolution, and an escalating commitment to sustainability. Our an­nu­al Tak­ing...

A data-driven review to analyse disputes activity to identify where, and how, banking disputes are being determined in 2024 and what might lie ahead. With over 1,000 new claims, the Banking and Finance sector topped the rankings for the number of High Court claims filed in any sector in 2023.

The Building Safety Regulator (BSR) has recently reminded developers of building work in England, whether involving a higher-risk building (HRB) or not, of the required steps they must take to ensure...

The CMS Corporate/M&A Group is pleased to launch the 16th edition of the European M&A Study

Managing communications on projects: Legal operations and project management are the keys to success This paper focusses on three of the major communication skill gaps that occur during legal projects and how these can be addressed with the help of a legal operations & project management team (LOPM Team). The proposed solutions cover the implementation of new practices, project processes and improved communication approaches.

How AI can unlock value and spot hidden IP traps in M&A transactions | 6 min read Imagine you’re looking to acquire or invest in an IP-rich business which has a portfolio of patents. How do you know if those patents are actually worth anything? Do you know if they are valid? Do you know if anyone is infringing them – thereby eating into the target company’s technology exclusivity? Do they even secure the company’s core in­nov­a­tions?Ar­ti­fi­cial intelligence (AI) driven solutions that are now on the market can help you identify key value opportunities and identify potential hidden skeletons. Key contacts   Joel Vertes, Intellectual PropertyToby Sears, Intellectual PropertyLouis Glass, Technology M&A and VC

Hypothesis: The total sum in dispute spiked and settled in line with arbitration caseloads[1]  In our first report exploring arbitration topics as part of our ‘data driven disputes’ campaign, we saw arbitration caseloads spike in 2020 and 2021 due to the COVID pandemic and other international geopolitical issues. The numbers have since settled back down. In this third report, we look at whether the Total Sum in Dispute[2] followed the same trajectory as the Arbitration Caseloads, with a spike in 2020 and 2021 before stabilising. We also considered whether the average value of an arbitration dispute (the Mean and Median Sum in Dispute) changed in response to those same global dynamics and, if so – how? Our starting point was to consider whether fire-fighting the effects of COVID-19 and the financial crisis may have forced many small and medium sized-en­ter­prises (with correspondingly small and medium-sized disputes) not to pursue arbitrations when they otherwise might have done. This could have artificially inflated the Mean Sum in Dispute for arbitrations registered in 2020-2021, given that only large and more financially stable organisations would be in a position to bring their typically (albeit not always) larger disputes. In the process of testing our hypotheses, we discovered that there was a noticeable lack of data on disputes values published by arbitral institutions, and where data is available, there is a significant lack of uniformity in terms of what is reported and how it is reported. In our view, this is a cause of concern, as institutions should be striving for transparency and accountability, not only as an end in itself, but also to helps arbitration users when selecting an institution to administer their disputes. Greater transparency would also allow institutions to consider global trends and identify how best to position themselves and their services. Research and methodology In order to conduct our analysis, we carried out desk research and qualitative interviews: Trajectory of total sum in dispute vs arbitration caseloads – regional disparities As noted above, there was a significant discrepancy in the amount of data that was publicly available in relation to the Total Sum in Dispute as compared with the institutions’ caseloads. However, we did observe that despite the overall increase in arbitration caseloads globally, the Total Sum in Dispute did not follow the same trend globally, only in Europe. As shown in the graph below, most of the major European institutions saw the Total Sum in Dispute increase (for instance, the ICC’s Total Sum in Dispute increased from USD 37bn in 2017 to USD 101bn in 2022). However, in the APAC region, the statistics show an overall decline in the Total Sum in Dispute over the past five years (with the exception of CIETAC, which consistently saw growth over the last five years from USD 10 bn to USD 17 bn, save for a slight dip in 2020). Given that APAC was the best performing market in terms of the number of arbitrations filed in 2022, one might have expected a correlating increase in the Total Sum in Dispute. However, as shown on the graph below, both SIAC and HKIAC, the two major institutions in APAC, did not see any significant growth in the Total Sum in Dispute overall. The SIAC did see a spike in 2019-2020, and this may be due to increased cases as a result of the COVID-19 pandemic, which has since stabilised. Unfortunately, there is not enough data available from institutions from other regions to discern a trend in terms of dispute values outside of Europe and Asia. The ICDR-AAA publishes data on Total Sum in Dispute and this has been fluctuating, at USD 8.2bn in 2018, dipping to USD 4.8bn in 2019, increasing to USD 6.1bn in 2020, and dipping to USD 4.2 bn in 2022. Largest players In terms of arbitral institutions with the highest dispute values, ICC is at the top of the table with a Total Sum in Dispute of US$ 37 bn – US$ 112 bn over the period 2017 to 2022, followed by CIETAC with US$10.11 bn – 17.85 bn over the period 2017 to 2022. ICDR, DIS, HKIAC, and SIAC make up the next category of institutions, with Total Dispute Values falling in the US$ 4bn – US$ 8bn range over the period 2017 to 2022. Most other institutions have a Total Sum in Dispute Value of US$ 2bn or less, such as SCC, VIAC and SAC. Impact on SMEs and average dispute values Only five of the institutions that we analysed report the Mean Sum in Dispute, while only two report the Median Sum in Dispute. Due to the scarcity of data on the Mean or Median Sum in Dispute, we were not able effectively to test our second hypothesis on whether average dispute values did indeed spike alongside caseload numbers in 2020/2021 and then settle back down. However, in APAC, the fact that (a) there was an increase in case numbers and (b) the Total Sum in Dispute declined suggests that the Mean Sum in Dispute in APAC fell, contrary to what we hypothesised. Scarce and inconsistent data on dispute values As is evident from our analysis above, our ability to identify trends around dispute values has been limited by the fact that many arbitral institutions do not publish data on dispute values, and where such data is publicly available, there is a lack of consistency across institutions in how this data is reported. Most institutions that publish data on dispute values provide the Total Sum in Dispute[3], a handful provide a breakdown of those administered by the institution[4] and some include counterclaim amounts[5]. Some institutions only report on the Median Sum in Dispute[6], while others indicate the percentage of cases within different ranges[7]. Only five of the institutions we analysed report the Mean Sum in Dispute[8], whereas only two report the Median Sum in Dispute[9]. Bodies such as the International Federation for Commercial Arbitration Institutions[10] are exploring the possibility of institutions harmonising the way they arrive at and report their statistics. Such standardisation would certainly help users, though it does not yet seem to have gained much traction with the arbitral institutions. A call to action for arbitral institutions The broader conclusion from our analysis is that institutions should strive towards greater transparency and consistency in reporting the Total, Mean, and Median Sum in Dispute, as well as the general spread of cases.

Does your business have or is it ready for digitalisation and digital assets? Digital assets are transforming the world of business. Not just technologies in the news, like AI and crypto currencies, but a whole world of technological advances, from digital twins and extended reality to smart contracts and token­isa­tion. For tech businesses and those already using such technology to develop and market new products, much of this is core activity and relatively well understood – although legal and regulatory uncertainties remain, and potential pitfalls still exist for the unwary. But other business leaders, often less familiar with the territory, have to manage an increasingly complex assortment of issues that never troubled their predecessors, ranging from protecting their brand in the metaverse to deciding whether they should tokenise their shares or accept payments in crypto currencies. This section of Bandwidth looks at issues around the development and regulation of a wide variety of digital assets, and discusses how businesses can embrace them to innovate and evolve.

Navigating the business landscape in Scotland and beyond presents numerous challenges. From escalating costs to talent scarcity, evolving regulations, and technological advancements, alongside political uncertainties. At CMS Scotland, we are committed to working with our clients to support them with these complexities.