Topical legal current affairs - September 2024

Each month, Jake Schogger (ex-Magic Circle lawyer and founder of City Career Series) and Peter Watson (ex-stock broker, head hunter and founder of Watson's Daily) host a free webinar summarising the key current affairs and trends from the previous month, including insights from a business, markets and legal perspective.

The below articles are based on Jake's contributions during the September 2024 current affairs webinar. To register for future sessions, including our full range of free webinars covering applications, interviews, commercial awareness and internships, check out this page.

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This newsletter covers topical legal current affairs from September 2024, including the laws governing strike action, the rules around dynamic pricing, the areas of law that generate the most revenue, and developments regarding employee welfare. 

Please note that these articles do not constitute legal advice and should not be relied upon. They simply reflect the author's research and opinion.

Get ready for another wave of strikes now that Starmer has caved (Daily Telegraph, Ben Marlow) paints an altogether more negative picture of what the government’s done so far – denying that there are signs of growth emerging and claiming that the UK’s economic situation was so catastrophic that the government was forced to ditch winter fuel payments for pensioners (saving £1.5bn a year) whilst on the same day announcing a £10bn increase in spending to finance chunky pay deals for public sector workers. More strikes are in prospect in the immediate future – gas emergency workers represented by the GMB union, more rail strikes just as Aslef had agreed to a big pay deal and the BMA is now advising members to “bank” the government’s pay offer whilst preparing to have more strikes for another 26% rise (in addition to the one its already had) between now and 2028.

WHAT ARE THE LAWS RESTRICTING STRIKES AT THE MOMENT AND WHAT'S CHANGED/GOING TO CHANGE?

According to the Government, industrial action includes circumstances where workers go on strike, picket, or take other related actions that fall short of a full strike, such as refusing to do overtime.

Trade unions

A trade union cannot call for industrial action whenever it pleases. Before doing so, it must hold a vote that is open to all members who the union intends to ask to take industrial action, and a majority of those members must vote in favour as part of a properly organised ballot. 

There are a number of steps that must be followed to ensure a ballot meets the relevant legal rules. If enough members vote in favour, a trade union official or a committee with the legal right to do so, must tell the relevant members and their employer when and how industrial action will be taken.

However, members cannot be forced to take part in industrial action and can’t be disciplined by their unions for failing to do so.

Unofficial strike action

Note that if employees take unofficial action – for example participating in a strike in sympathy with people who work for a different employer – they won’t be protected by industrial action law, and could potentially be fairly dismissed (subject to their usual employment rights). 

If a trade union takes action without following the relevant legal rules, the union could face legal action or be fined, and employees who participated would not be protected from unfair dismissal.

Recent changes to the law

The previous Conservative government passed the Trade Union Act, which introduced a higher threshold that unions had to meet in order to legally call for strike action. 

For example, the act stipulates that there must be a minimum 50% voter turnout for a ballot to be quorate, and in certain sectors – for example, education, health and transport - 40% of the entire union membership has to support the action for it to be legal.

Rules were also introduced in 2023 to limit the impact of strike action by certain essential workers such as teachers, firefighters and train workers. According to the BBC, these rules would have forced train firms to run around 40% of rail services on strike days, with fire services required to crew 73% of fire engines. However, the rules have never actually been implemented during a dispute.

Labour now plans to scrap these rules, as well as the higher thresholds for ballots.

To access our links to sources / further reading recommendations, check out the blog post version of this article.

European Commission to investigate Ticketmaster’s ‘dynamic pricing’ (The Guardian, Josh Halliday) shows that the European Commission is now going to look into Ticketmaster’s ability to use dynamic pricing following the whole Oasis ticket fiasco. The EC is looking into whether the US giant has breached laws in the UK and Europe for price gouging – e.g. some Oasis tickets saw price increases from £135 to £350 for the same ticket. The CMA is also looking into this while Ticketmaster argues that it’s just doing something that airlines and hotels do. SO WHAT? Dynamic pricing for concert tickets is common in the US but quite new in Europe and the UK (and it’s actually not unlawful). What will be interesting to see will be whether the way that pricing was executed in this case had breached EU directives, for instance if the price increased after a consumer had put their ticket in an online basket.

WHAT ARE/ARE THERE LAWS ON DYNAMIC PRICING? CAN IT BE BANNED? WHO CAN SAY THEY DON'T WANT IT?

The lead officer for fair trading at the Chartered Trading Standards Institute – Sylvia Rook - has recently confirmed that dynamic pricing is not specifically prohibited by consumer protection law.

In fact, it is common practice and generally accepted by consumers in other industries, for example the airline and hotel industries. However, this doesn’t mean that dynamic pricing can be implemented however a seller sees fit.

Misleading consumers

Under the Consumer Protection from Unfair Trading Regulations, traders are prohibited from misleading consumers regarding the price of goods and services, if doing so causes the average consumer to make a different transactional decision.

In the case of the Oasis ticket chaos, Sylvia Rook points out that many consumers would not have joined the queue had they known that the price would have increased by the time they were able to purchase. 

This, in turn, arguably indicates that at least some consumers were misled to the extent that they took different transactional decisions (i.e. decisions not to purchase after queuing with the intention of purchasing, or decisions to pay far more than they would have done if they were given time to properly consider the circumstances).

This is backed up by the huge volume of complaints submitted by consumers to the Advertising Standards Authority about misleading claims regarding ticket availability and pricing. 

Some said they had seen zero warnings that the original advertised price could rise so steeply, and then – having queued for hours – had a very short amount of time to decide whether to pay a significantly inflated price when they finally got to the front of the queue.

Consumer protection and competition law

So, what are the potential consequences?

According to Pinsent Masons, a commercial practice can fall foul of consumer protection law if material information is omitted or hidden, which suggests that the alleged lack of transparency from Ticketmaster may have breached consumer protection rules. 

Moreover, from a competition law perspective, if a business is dominant in its market - and is therefore able to use dynamic pricing to set excessive prices - there’s a risk it could face claims that it is abusing its dominant market position in breach of competition law.

To access our links to sources / further reading recommendations, check out the blog post version of this article.

Best performance for law firms since 2008 crisis (The Times, Jonathan Ames) cites research by The Lawyer which says that almost 50% of the UK’s biggest law firms posted record double-digit revenue rises over 2023 in the industry’s best performance since before the 2008 financial crisis! The best performer was Bond Turner (it did a lot of work in the “dieselgate” legislation where it represented thousands of clients with their diesel emissions claims), Kennedys Law (an insurance specialist, helped a lot by its US business) saw the biggest growth but DLA Piper remained at the top of the league table with Clifford Chance in second and A&O Shearman being in bronze medal position. Hogan Lovells, Freshfields Bruckhaus Deringer and Linklaters were then next biggest. SO WHAT? This sounds pretty impressive! When M&A starts to kick in properly then things could get even better!

WHICH LEGAL WORK GENERATES THE MOST REVENUES?

I’m not sure there’s really an answer to the question of which legal work generates the most revenues to be honest, as it really depends. 

At the lawyer level: hourly rates within a particular law firm – at least in my experience – don’t tend to differ based on the types of legal work being completed. An NQ working on a corporate due diligence exercise for 10 hours will likely earn the same money for a law firm as an NQ working on document review in connection with a dispute (subject of course to any special discounts offered to specific clients).

At the firm level: the practice areas that generate the most revenue will depend on the size of the respective teams, which in turn can depend on the law firm’s focus. A firm known for dispute resolution might make all – or most – of its revenue working on disputes, whereas a firm focused on corporate law might make most of its revenue advising on private equity and M&A deals.

Looking at specific client matters: large disputes tend to last a lot longer than corporate transactions (I worked on one that had being going on for many years!), so in this sense, bringing in one large dispute could mean a lot more revenue for a firm than bringing in one large transaction. However, a team might be able to work on many transactions in the time taken to take one dispute through the court and appeals process, so purely on a time basis, the combination of transactions could result in more revenue for a firm than the dispute.

Looking at types of clients: of course, more "commodified" legal work - such as drafting simple wills, conveyancing for your average residential property, and other work for private individuals - tends to be cheaper, as the target clients can't generally afford to spend tens or hundreds of thousands on legal fees (and the value they are deriving from legal advice doesn't really justify this level of spend). Similarly, routine legal work for smaller businesses tends to be simpler, meaning more firms can do it (so more firms are competing for the work), which often results in cheaper pricing. Massive, complex, multi-jurisdictional deals or disputes involving global corporates and investment funds require much more specialised experience and expertise, and an ability to throw a significant amount of legal resource at problems and processes. There are fewer firms able to carry out this type of work, meaning these firms can often charge more per hour (whilst the sheer number of hours needed to complete the work means the firms will inevitably generate much more revenue).

The market

Revenue also depends on the market. During times of financial uncertainty, there tend to be more restructurings and insolvencies, as well as disputes (because parties can be more on edge about counterparties defaulting on their obligations). At the same time, deal teams might be relatively quiet and therefore generate less revenue. 

The converse might apply during boom times!

Of course, these are all generalisations. The reality will depend massively on the firms, the nature of their clients, and the type of work being carried out. 

Check out our business of law firms course to access insider insights from various ex-City partners into how law firms operate as businesses, including firms' operating models, how they are managed, business development, client fee structures, profitability metrics, and how they remain competitive.

There was a lot of talk about employee welfare this week. The Mindful Business Charter, a mental health charity, is urging law firms to monitor the sleeping patterns of employees who might be struggling with their mental health but I wonder whether this will actually make things even more stressful. JP Morgan appointed a banker to oversee juniors’ wellbeing as concerns continue to rise about working conditions on Wall Street. Meanwhile, Deloitte announced that it would offer equal parental leave in an effort to help more women climb up the corporate ladder. From the beginning of next year, new fathers and mothers will get 26 weeks of fully paid leave. I think this is great – for big firms that have decent-sized teams that can cope with this – but I think it could be a nightmare for SMEs who won’t be able to cope with such long absences.

WHAT LAWS ARE THERE NOW REGARDING EMPLOYEE WELFARE?

In the UK, employers have a legal duty to protect the health, safety and welfare of employees.

For example, under The Workplace (Health, Safety and Welfare) Regulations 1992 (as amended), employers must provide employees with:

• Adequate welfare facilities (including, for example, drinking water and the right number of toilets);
• A healthy working environment (including a clean workplace with good ventilation, suitable lighting and a reasonable temperature); and 
• A safe workplace (including well-maintained equipment).

There are also more specific rules and obligations that apply where employees work in certain settings, for example rules relating to risk assessments where employees are expected to handle hazardous materials or work in dangerous environments.

Stress in the workplace

Moreover, employers are legally obligated to take steps to prevent or reduce work-related stress.

For example, according to ACAS, the Health and Safety at Work Act 1974 places a "duty of care" on employers to protect their employees from the risk of stress at work, whilst the Management of Health and Safety at Work Regulations 1999 requires all employers to make a "suitable and sufficient assessment" of the risks to the health and safety of their employees at work.

In addition, the Working Time Regulations stipulate that employees should not work more than 48 hours per week, alongside various other protections. 

However, employees are permitted to opt-out of this restriction, meaning the rule often lacks teeth in the types of high pressure/high workload environments that make the news. I still remember signing my own opt-out!

To access our links to sources / further reading recommendations, check out the blog post version of this article.

Peter Watson helped to deliver Commercial Law Academy's Discussing current affairs and industry trends course, which offers in-depth advice on how to research into and confidently discuss current affairs, including how to select which news stories to focus on, what to consider when reading the news, and how to structure your discussions in interviews.

The course also includes recordings of our monthly current affairs wrap-ups from Jan 2021 to present, an overview of legal industry trends and challenges, and an insight into how legal technology is changing the legal landscape. 

Note that this is just ONE of our EIGHT courses covering different aspects of commercial awareness.

As a reminder, Commercial Law Academy offers 23 in-depth courses, covering: insights into legal careers, firm profiles and interview insights, expert advice on writing applications and tackling psychometric tests, dozens of example (verified) successful cover letters and applications, resources to help you prepare for interviews and internships, example interview case studies, M&A and private equity, practical content to help you understand and confidently discuss commercial concepts and current affairs, plus tips on how to network, negotiate, deliver presentations and write professionally. Check out this animated explainer video for more information.