Are Legal Risks Rising or Falling In 2023 So Far?
The world is chaotic and represents a cocktail of opportunity and threats. Or at least that’s how the C-suite sees the world. In real life, where few plans ever get delivered in the way you expected, if at all, legal risk is just one factor among many, as to why it can be so difficult to conduct business.
But are legal risks rising or falling in 2023 so far? Will companies find themselves picking up the phone to their lawyer or legal firm? We’ll review the key points for the notion that legal risk is on the rise this year in this article.
2023 is the year of political risk
Political risk for businesses and wealthy individuals used to be closely connected with the consequences of falling out of favour with an autocrat in a regime with a poor rule of law.
As Hussein Haeri, Partner and Co-Head of International Arbitration at Withers LLP explains; ‘This taking of private property for supposedly public use is something which wealth owners globally still fear‘.
However, the number of risks has escalated in the wake of the crisis in the east, which has seen lawmakers around the world add a schedule of new legislation to their books, targeting wealthy individuals with powerful connections.
While the sanctions levied by the EU and the US have been focused on a relatively short list of names, how countries have jumped to freeze assets has caught the wealthy off-guard. The incident has served as a reminder that even countries with robust rules of law can re-write those laws in short order if you become a political enemy of the establishment.
A returning workforce will lead to returning legal risk
In 2022, several western countries including the UK relaxed Covid-19 restrictions to the extent that life largely returned to normal.
Businesses once again encouraged their workforce to return to the office, but they may be forgetting one consequence of that; the risk of covid-related litigation, brought about by employees who feel that their rights are being eroded by such a return.
While the wider world would like to pretend that the pandemic is over, the virus continues to circulate aggressively through the population of the UK, which is a serious concern to the 3.7 million people who were labelled by the government as ‘clinically vulnerable’ to the virus.
By staying at home, the workers within this group have been able to fulfil their duties while taking control of their health and safety. Any enforced return to a physical office environment, while the number of cases remains high, could be interpreted as constructive dismissal by an employee who feels that they would be endangering their life to be interacting with others as normal. Therefore, experts expect the rise in Covid-19 related litigation to continue unabatedly.
Two legal risks for businesses have stepped up in 2022 to date; sanctions against individuals have become a key tool for governments to fight the political influence of their autocratic adversaries. Closer to home, businesses may find themselves underneath a sea of legal letters as vulnerable employees challenge their mandatory return-to-the-office schemes.