19 August 2020
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Baker McKenzie informs about the implications of COVID-19 for the future of Dispute Resolution

The outbreak of the global COVID-19 pandemic led to an increase in economic instability and uncertainty, which is likely to result in a growing number of disputes. International law firm Baker McKenzie provides the firm´s view on the types of disputes that will arise from the COVID-19 crisis on the short and on the long term. 

Some issues that trigger disputes in the short term involve: 

- Force majeure, frustration and impossibility: these dispute issues are on the rise, for example in response to quarantines, business closures, lack of staff able to work, cancellation of events and travel restrictions.

- Supply of goods: this issue arises due to problems with the supply chains for reasons such as transport delays, lack of staff or business closures.

- Compliance and investigations area: this key area is impacted strongly, regarding for example the monitoring of employees, with some possible risks that might arise in this area being anti-trust compliance, anti-bribery and fraud.

- Insurance disputes: disputes between insured and insurers are on the rise as well, regarding liability for COVID-19 related losses.

- Courts and arbitrations: various procedural changes to dispute resolution are noted resulting from the crisis, for example, a rise in “virtual hearings” or online trials.

In the medium term (referring to the next 6-12 months), a number of other dispute issues are expected to arise, including the following areas: 

- Insolvency litigation: financial disputes, including insolvency, are likely to increase as a result of the economic slowdown.

- Mergers & acquisitions: it is likely that many unfinished deals will not be terminated due to the uncertainty caused by the pandemic.

- Consumer claims and enforcement of consumer protection laws: companies have to face a huge number of consumer claims, especially within the travel and events industries.

- State support for companies, industries and economies: various EU member states consider support packages to limit the impact of the crisis on the economy.

- Claims arising from our reliance on technology: as the educational and working environment depends more than ever on the IT infrastructure, more claims might arise regarding the use of technology.

- Employment and pensions: possible dispute issues in this area concern sick leave or potential wage and hour violations.

- Export bans, e.g. of medical equipment: Some governments have implemented measures such as restrictions on certain kinds of protective personal equipment leaving their countries.

On the longer term, the impact of the COVID-19 pandemic could be noted in the following areas: 

- Courts and tribunals: there might be an increase in online courts and tribunals, as well as online mediation.

- Force majeure: there might be a rethinking regarding the force majeure concept, with changes in business contracts.

- Governing law and jurisdiction: very likely, contractual parties might also reflect on their governing law and choice of jurisdiction for agreements in light of COVID-19.

Copyright © The Impact Lawyers. All rights reserved. This information or any part of it may not be copied or disseminated in any way or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of The Impact Lawyers. The opinions expressed in this article are those of the authors and do not necessarily reflect the positions or policies of The Impact Lawyers.
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