UK Knowledge Collection | Litigation risk from generative AI use, mandatory mediation, and the 'shareholder principle' of privilege

Litigation being conducted in a variety of jurisdictions against developers of generative artificial intelligence (AI) tools is raising important questions as to whether these tools infringe third-party intellectual property or privacy rights. Our Insight considers the risk of legal claims being brought directly against users of the tools..

A significant ruling by the Court of Appeal has expanded the court's power to compel parties to take part in mediation or other forms of non-court-based dispute resolution procedures. However, it emphasised that parties should only be ordered to take part in alternative dispute resolution and mediation if it does not impair their rights to proceed to trial and is proportionate to achieving a settlement fairly and quickly – and at a reasonable cost.

A recent High Court decision has cast doubt on the justification for a long-standing principle of the law of privilege: that a company cannot assert privilege against its shareholders unless the documents relate to litigation between them. The judge accepted that he was bound by previous authorities and noted that the principle was now so well established that a Supreme Court decision would be necessary to overturn it. The decision may, however, be a useful starting point for parties seeking to overturn or limit the principle.

Our final webinars of 2023 include a look at the UK's changing regulation of the pharmaceutical industry, how commercial landlords can regain possession of land from squatters and trespassers, and financial promotions in consumer credit.

Recent Insights

Insurance broker negligence: what do brokers in the UK need to ask their clients?

A recent High Court ruling explored how far a broker is liable to its client if it failed to advise on the most appropriate terms.
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Promissory notes and loan notes in corporate reorganisations – uncertain terms in English law?

Promissory notes and loan notes are often used in group reorganisations to document a loan relationship, but because the terms are frequently used interchangeably, there is scope for misuse and misunderstanding.
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Generative AI litigation: a concern for users of AI tools?

The use of generative AI tools can give rise to varying degrees of direct and indirect litigation risk. Businesses should make sure that they understand how they and their employees are using AI tools to generate content in order to assess what risks could flow from that use.
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English High Court criticises and clarifies the 'shareholder principle' of privilege

The rights of shareholders to receive disclosure of company documents in corporate litigation is almost inevitably a contentious issue. It remains to be seen whether, if the chance arises, the higher courts will begin to alter the application of the principle, overturn it altogether, or seek to reaffirm it on a different basis.
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Mandatory mediation has been ushered in to England and Wales

Parties are encouraged throughout the litigation process to attempt to settle disputes, and this decision may encourage more litigants to explore settlement possibilities before being ordered to do so by the court.
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Events

Pharmaceuticals: are alternative routes to market worth the detour?
11 December | 09:30-10:00

How should companies navigate the regulatory system to bring medicines to the market, particularly as the UK system diverges from the EU model?
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Trespassers – how to mitigate risk and recover your land
13 December | 09:30-10:15

The next instalment of our property disputes series returns to a commercial landlord and tenant focus: examining how commercial landlords can regain possession of land from trespassers or squatters.
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Consumer Credit Act Academy | Financial promotions and unpicking the APR
14 December | 09:30-10:30

The fourth instalment of our consumer credit series takes a closer look at financial promotions and the annual percentage rate.
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