Following the release of the report, A&O partner Mark van Brakel said that whilst the profession has not experienced a significant wave of pandemic-related litigation claims, lawyers need to be on alert as we move towards a new normal.

“Our experience is that parties have largely found practical ways to manage the risks to their business, albeit the contractual and financial strains caused by the pandemic have led to some new and complex questions arising in existing law. This has highlighted several key issues for lawyers,” he said.

“More than ever before, lawyers must stay very close to their clients and the circumstances in which they find themselves, due to the evolving and insidious nature of COVID. There has not been a ‘big bang’ event causing tangible losses where lawyers come in to pick up the pieces and attribute blame for losses.

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“Lawyers are helping the most in the day-to-day problem-solving and management of issues – contract management and understanding the contractual processes (and compliance) – is particularly important given disputes are likely to manifest in the longer term,” Mr van Brakel added.

As interaction with counterparties is now done by virtual means, disputes that would previously be resolved with personal interaction and relationships are more likely to arise. This requires lawyers to fully understand their client’s business and its interconnections with other sectors that have also been impacted by the pandemic, according to Mr van Brakel.

“In terms of actual disputes, impacts on supply chain logistics has been the most common issue, and in respect of some very significant and complex supply transactions, such as LNG cargoes. These cases have tested the boundaries of contractual provisions around performance terms, force majeure, frustration, and material adverse change. 

“It also appears that the formal disputes will emerge as part of the ‘long tail’ of COVID. Pharmaceutical, health care, and governmental direction/regulation of COVID circumstances are also likely to be the areas where controversies and losses will occur, and disputes will follow,” he said.  

“Lawyers need to be flexible and adapt quickly, using technology to stay ahead. We saw this within months of the commencement of the pandemic with greater informality in parties’ dealings and interactions with decision-makers – virtual hearings took place over significant matters and have become the norm. The development of apps to deal with the new norm of dislocation is likely to proliferate, and lawyers need to be conversant with these tools to be competitive.”

Similarly, lawyers working in the ESG space need to be able to quickly adapt to new factors and be able to “broaden their perception of how disputes may arise and be pursued,” said A&O partner David Jenaway.

“As ESG considerations gain further prominence throughout the business world, they are increasingly becoming a subject of various litigation strategies. For litigation lawyers in particular, this has led to a need to focus on gaining an understanding of the broad range of factors that are captured by the terms ‘ESG’.

“Whilst recent media focus has largely been on climate change issues, in reality, ESG is a broad that captures many forms of ‘good corporate citizenship’ (including human rights and employee relations, and financial crime and corporate governance). Many of these factors intersect in the operation of business, and it is important for lawyers to be abreast of the various issues and developments so as to spot the potential opportunities and challenges for clients.”

As claimants are often not motivated by commercial rationale but rather a desire to create societal and behavioural change, ESG issues are often different to corporate issues – which requires lawyers to “embrace different tactics and strategies to further their clients’ interests,” added Mr Jenaway.

“Of course, prevention remains the best cure. So, in addition to identifying how to deal with new and unique disputes, it is incumbent upon lawyers to spend time thinking about what creative and developing areas of disputes and risk may arise from the increased ESG focus. This will enable those lawyers to advise clients on how to minimise their potential risk or exposure in those areas.

“One particular area of focus at the moment is companies’ obligations regarding disclosure and reporting, and in particular how to accurately convey both a company’s current status and the potential future path. Taking extra care and demonstrating a conservative approach to the legal position at an early stage will often bear significant rewards in the longer term.”