The week’s news included; Landmark week in US legal history, New rules for BNPL firms, VW appoints banks for $100bn Porsche IPO, Airport workers & legal aid barristers plan strikes.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page, Facebook page and Instagram Page, for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
Opinion articles of the week:
- BBC News -Can crumbling cookies sweeten UK data-protection plans?
- Law Careers.net– NFTs and the law: What are the unique legal considerations surrounding the growing popularity of NFTs?
- The Fashion Law – Greenwashing: How Ads Get You to Think Brands Are Greener Than They Are.
- Sky News – Amazon: An online sales tax (OST) would cause significant harm to Britain’s army of small businesses.
1. US LAW LANDMARK WEEK
It was a momentous week in US legal history. The US Supreme Court voted to reverse the landmark Roe v Wade decision, allowing states to determine whether. Since 1973, federal law required states to allow abortions within the first three months. States were permitted to restrict abortion later than this. Last week’s decision allows individual states to decide whether to ban or permit abortion, at any stage.
While the decision does not ban abortion in the US, conservative states have the right to and have begun banning abortion. So far over 20 states have unveiled plans to ban abortion, many of these bans start from conception. All states will however, allow abortions to save the life or health of the mother. The decision has received severe backlash within the US and across the world. BBC News looks at the reaction in more detail.
In the same week, the US Supreme Court expanded gun carrying rights. The court ruled that a New York law that requires gun owners to provide “proper cause” to carry concealed firearms breaches constitutional rights. This will impact other states like California and New Jersey which restrict residents from carrying concealed firearms. The decision marks the most significant change to firearms law in 10 years. The powerful National Rifle Association (NRA) financially supported the New York based claimants who sought concealed carry permits. After two tragic school shootings recently however, the US Senate did vote to restrict access to firearms by introducing stronger background checks and better funding for programmes to seize guns from dangerous people.
The shift towards conservative ideals seen here derives from the political imbalance in the US Supreme Court. There are six conservative Justices, two appointed by Donald Trump and just three remaining Democrat-appointed liberal justices. The conservative majority means that rulings are swaying more heavily towards the typical Republican ideals, evidenced by last week’s judgements.
2. NEW BNPL RULES
The UK government is introducing new rules for buy now pay later (BNPL) companies. Companies will be required to introduce affordability checks and improve advertising standards. Although BNPL loans are typically interest-free, there are growing concerns that BNPL users are getting into unaffordable debt and consequently damaging their credit scores. Due to rising inflation, many people are using BNPL loans to cover essential products and pay off their loans using credit cards or overdrafts. Campaigners have called on BNPL firms to do more to protect customers. Over 15 million people used BNPL loans in the UK last year.
New rules will be introduced bringing BNPL lenders under the scope of the Financial Conduct Authority. This will force BNPL ads to adhere to rules on regulated financial product promotions. Customers will be able to complain about lenders to the Financial Ombudsman Service. All lenders will be required to undertake affordability checks on customers before issuing loans. Any new rules will not come into force until mid-2023.
3. PORSCHE IPO
Volkswagen (VW) is lining up banks to lead its huge $100 billion IPO of Porsche. Earlier this year the automotive giant confirmed that it would explore a separate listing of its luxury subsidiary Porsche. Porsche’s listing would raise as much as $20 billion. This comes amid a global downturn in capital market activity. Rising interest rates, inflation and the war in Ukraine have driven investors away from the markets. Despite this, Porsche’s listing could mark one of Germany’s largest ever, with estimates valuing the carmaker as high as $95 billion. VW had already chosen Bank of America, Citi, Goldman Sachs and JP Morgan as joint global coordinators but now added Deutsche Bank, Morgan Stanley, BNP Paribas and Unicredit as joint bookrunners. The IPO is expected to take place in Q4 2022. VW hopes that the listing will fund its shift towards its fully electric fleet.
4. STRIKE ACTION
Last week saw rail disruption across the UK as railway workers of the RMT Union and ASLEF took strike action. Workers from different sectors are also taking action. British Airways workers at Heathrow Airport have voted to go on strike over pay. 700 workers of the Unite and GMB Union members will strike in the summer holidays. BA had imposed a 10% pay cut during the pandemic but now that travel is returning to pre-pandemic levels, workers complain that this has not been reversed. Furthermore, other BA workers and managers have been given a 10% pay rise but check-in staff have not been given anything. With passengers already facing cancellations and severe delays, the strikes will undoubtedly add further disruption.
Legal aid barristers have also overwhelmingly voted to take industrial action. Barristers will now stage “court walkouts” due to disputes over pay. Barristers demanded a 25% increase to legal aid fees. While this seems like a significant increase, barristers’ legal aid fees have been cut and frozen for 25 years. Junior legal aid barristers earn typically under £20,000 a year and can even earn as low as £10,000. This has led to an exodus in the sector and now only 4% of criminal duty solicitors are under 35 years old. This will impact anyone who needs legal advice and cannot afford their own solicitor.
There is a backlog of 59000 cases in the Crown Court which is likely to get worse. An independent review of the system found that the courts were at risk of collapse without £135 million of fresh government funding. Over 2000 members of the Criminal Bar Association have voted to take days of action which ultimately end in a five-day walkout on the week of 18 July. Barristers will then walk out every other week until demands are reasonably met.
5. UK SUPREME COURT ISSUES 5G RULING
Last week, the UK Supreme Court ruled that telecoms firms have the right to upgrade their existing phone masts, even without permission of the landowners. This ruling will make the rollout of 5G infrastructure easier for telecoms companies. The case involved a review of the scope of the Electronic Communications Code 2017. Various landowners had sought to challenge phone mast operators upgrading masts without obtaining new rights. The government amended the Code in 2017 to give firms greater rights to upgrade infrastructure and this ruling provides further clarity for telecoms firms.
TikTok has announced that it will do more to protect children on its platform. The social media giant stands accused of failing to protect children from certain adverts and inappropriate content. Last year, a complaint was filed at the European Commission over TikTok’s practices. The company anticipates a crackdown and is preemptively making policy changes to soften the blow. New safeguards will now be implemented so ads targeted at children are more easily reportable and new ads labels will be introduced.
This comes as Buzzfeed reported that US user data is being accessed by China-based staff. Employees of TikTok’s parent company ByteDance have sole access to some data which US users are unable to access. There are now significant concerns over the security of US users’ data. In 2020, President Trump threatened to ban new downloads of TikTok unless a US based company bought its American arm. Microsoft and Oracle explored a purchase but this fell through. The deadline lapsed and no action was taken against TikTok. This news could renew impetus for US lawmakers to take action.
7. INFLATION RISE
The rate of inflation has risen to a new high of 9.1% in May. This is a slight increase from the 9% rise in April. The increase in inflation was largely driven by rising food and drink costs. Over the next few months a government support package will kick in (see previous top 10) to help people pay energy bills and give additional funds to the most vulnerable in society. Inflation however, is impacting households significantly now and with a further energy price cap rise expected in the autumn many analysts are anticipating a winter of discontent. Wages are not keeping pace with inflation so workers are losing out. Given the wider economic downturn however, businesses are also suffering and often can’t afford to pay more. How the Chancellor and Bank of England will respond in the coming months remains to be seen.
8. INSOLVENCIES ON THE RISE
Firms are struggling with rapidly rising inflation and rising interest rates. In the UK, there has been a 30% spike in insolvencies in the past three months alone. Nearly 6,000 businesses have collapsed over the period. As mentioned above, inflation is at a 40 year high and interest rates have quadrupled since December. This has meant costs of production have soared, debts are more expensive to pay and some mortgages have spiked tremendously. Those on tracker mortgages have seen an average rise of £115 in their monthly mortgage payments since December. This cocktail of price rises has significantly hit businesses. Unfortunately, the Bank of England expects that things will get worse before they improve. Therefore, insolvency numbers are likely to increase within the coming months.
9. NETFLIX JOB CUTS
Netflix has announced that it will slash 300 jobs as the streaming company foresees further turmoil for the sector. In May, Netflix cut 150 jobs after revealing its subscriber numbers decreased in a quarter for the first time in 10 years. Netflix now anticipates that it will lose 2 million subscribers in Q2 of 2022. This is due to the company’s withdrawal from Russia along with users unsubscribing to save money amid the rising cost of living. Although the company still boasts over 200 million subscribers, this decline is hitting their balance sheet. Netflix has already hiked prices and is even considering introducing adverts to its service in an attempt to balance the books.
The tech sector has been hammered so far this year and Netflix has been no exception. Tech firms have cut 27000 jobs in the past 2 months alone and things could get worse as winter draws nearer.
10. ED SHEERAN COPYRIGHT LAWSUIT
Ed Sheeran and his co-writers have won a copyright case over his 2017 hit single “Shape of You”. Sami Chokri and Ross O’Donoghue sued Ed Sheeran for allegedly copying part of their 2015 single “Oh Why” and the case went to the high court. In April, the judge however, ruled that Sheeran “neither deliberately nor subconsciously” copied from their song. Sheeran and his writers subsequently sued Chokri and O’Donoghue for costs. Last week, the court awarded Sheeran an interim payment of £915,000. This was because Chokri and O’Donoghue told the Performing Rights Society (PRS) of their claim that Sheeran had copied them which led the PRS to suspend all payments to Sheeran.