Lawyer Monthly - January 2022 Edition

29 JAN 2022 | WWW.LAWYER-MONTHLY.COM 2022 TRENDS OUTLOOK: LITIGATION IN SCOTLAND to have had a huge impact on directors' liabilities because that remedy concentrates on inadvertent behaviour. There are, of course, numerous provisions in the Companies Act 2006 and the Insolvency Act 1986 which deal directly with deliberate conduct by directors (such as sections 212 or 213 of the 1986 Act on misfeasance and fraudulent trading respectively). Directors also have common law duties and if their conduct is not caught by legislation then it may still be a fraud at common law. There was also no suspension of the Secretary of State's powers to disqualify directors under the Company Directors Disqualification Act 1986 and the Rating (Coronavirus) and Director Disqualification (Dissolved Companies) Bill, which ensure that directors of dissolved companies who have exploited government-backed loans granted during the pandemic will not be absolved of liability. Taking early advice will be crucial for corporate officers who are concerned about their position as companies and third parties will start to take action in 2022. 3. Climate litigation is likely to start taking place in Scotland Class actions are now well up and running in Scotland (known as group proceedings) and it will be interesting to see whether the climate change litigation, which we have seen across Europe and North America over the last few years, will now come to Scotland. There is a good chance that it will, particularly with COP26 having been held in Glasgow in November, which highlighted Scotland as a leader in environmental matters. While some climate change litigation has focussed on getting governments to reduce emissions, such as the hugely successful litigation in the Netherlands by the Urgenda foundation, it seems clear that climate litigation is now entering a second phase where action groups are seeking to hold the polluters themselves to account for damages or reducing emissions, such as the Milieudefensie litigation against Royal Dutch Shell. Investors are also getting involved: claims by groups of investors seeking to hold companies or directors to account for failures to disclose material climate change risks may gather pace. Of course, whether Scotland becomes a jurisdiction of choice for climate litigation will depend partly on the domicile of the polluter. However, the cost of litigating in Scotland is not high compared to neighbouring jurisdictions and the streamlined process involved in group proceedings may see climate litigation becoming a feature of the Scottish legal landscape in 2022. 4. Contract disputes will not disappear While new types of litigation may arrive