A year in review and predictions for 2021; part 2

Last year I crowdsourced some industry expert’s opinion about their predictions for the new year, and this year I wanted to do something very similar. This year I delve into the year of 2020 in review and indeed add in some insightful industry predications for 2021 too. Hopefully you had already read part 1 of this article, now read on to hear what these industry experts said in part 2.

Lorenzo Grillo, Managing Director of Cyber Risk Services in my team here at A&M, articulated how the pandemic has been the main vector for Cyber Security challenges in 2020. He told me that the number of attacks has increased significantly this year, mainly using ransomware to block critical data and systems. He also cited remote working as posing a real issue due to the “quick and dirty set-up of a new infrastructure”.

As we go into 2021, Grillo expressed that the Cyber challenges seen in 2020 will likely be the same in 2021, due to the “new normal” working environment, even if an improved awareness at the top management level could lead to a better governance of cyber risks. He concluded that, “corporations should focus on their critical business assets and make the right investment in setting up a proper cyber strategy and operating model with the right skills and roles and responsibilities.”

Juan J. Valderas, managing director for the disputes and investigations team at A&M in Madrid expressed a similar sentiment to some of the other experts in this piece in that we are not out of the danger zone yet. Valderas said, “in 2021 we are going to see a tsunami of litigation, creating tensions impacting all sort of dispute resolution mechanisms. Regular judiciary systems are going to struggle to deliver timely solutions, and arbitration houses and professionals are going to need to face very significant changes on the way they were used to do things.” He also mentioned that he felt that virtual arbitration is going to mean much more than online hearings, opening new avenues to competition among arbitration institutions or from other ADR systems such as mediation.

Many of the above sentiments focused on business processes and how the industry has fared, but I was very inspired by some comments from Clare Chalkley, Vice President of Legal Services at Integron, who pointed out the mental burden we have all had to deal with this year. She said, “The impact of COVID on this industry will be analysed and written about for years to come, but for many, the personal challenges will have been greater than the professional ones and it is so important that we don’t lose sight of that. Businesses needed to demonstrate true empathy and patience and consider all aspects – productivity and mental health - on an employee. Hopefully some of that view will make it into 2021. I’m sure we have all been impacted by COVID-19 in some way, shape or form and some far worse than others - and my heart goes out to those people. Certainly, ensuring our collective personal wellbeing has been a priority for governments, businesses and individuals. It is something I regularly have on my mind and it is important that as, hopefully, the World starts to recover, we do not lose sight of that as Clare says.

Looking ahead to 2021, Chalkley expressed that the systems and processes we rapidly adopted and the data we generated in order to keep us connected and functional in 2020 will creep into scope in the inevitable investigations and disputes which will come in 2021. She said, “our technology experts will be challenged to find ways to defensibly collect, collate, search and present the data and we will also face practical and ethical decisions about how we review and produce it.”

Christoph Hoerauf, Managing Director of the disputes and investigations team for A&M Munich talked to me about how 2020 saw a series of investigation cases related to “classic fraud” in the German market. He contemplated that, “independent of industry we have seen a rise of issues relating to various permutations of accounting fraud, ranging from deliberate manipulation of financials for the sake of exaggerating profits, to more subtle “legal accounting maneuvers” mostly for the sake of personal gain.”

On predicting what 2021 might have in store, Hoerauf said that it will bring with it “regulatory/legal challenges and changes to Germany, such as the new whistleblowing directive, the bill on corporate liability as well as an amendment to AML guidelines, only to name a few, which will also affect the investigations landscape. Also, with large parts of the corporate workforce moving to work remotely, greater opportunities for potential wrongdoing are to be expected across the board.”

It is very likely that we look back on 2020 as the tipping point for the greening of our economies, and Richard Slark, Managing Director, Energy at A&M Economics certainly holds this opinion. He said, “the unanticipated side-effects of Covid being the hastening homeworking, reduced reliance on cars and the decline of air travel, whilst the economic response has also seen a co-ordinated desire across European states to invest in infrastructure to build back more sustainably, enshrining these cultural shifts and compounding their effects.”

When I asked him about this in more detail he explained, in common with most industries, 2020 has been a rollercoaster year across the energy sector – but there is a clearly visible dividing line amid winners and losers – between the low-carbon and the conventional technologies, respectively. The gas and electricity sectors were experiencing low prices pre-COVID on the back of mild winters and excess supplies, but the supply-demand imbalance has been compounded by COVID-related downturns that have crashed oil prices, leading to massive cut backs in oil and gas exploration and production. In contrast, high levels of renewable generation, adoption of net-zero carbon policies and the increased prominence of ESG issues for corporates and investors, have combined to drive a sense of optimism (and influx of capital) in renewable and low carbon sectors that defies the economic uncertainty COVID-19 has induced across the broader economy. 

Looking forward Slark expressed “the undoubted ability of these sectors to capture a large chunk of the infrastructure investments proposed across Europe to drive economic recovery, creates new opportunities across the renewable generation and heating sectors; the emerging hydrogen economy; energy storage; and electric vehicles. However, challenges abound in the transformation of the energy and transport sectors: in the design and implementation of new market rules and regulations required to accommodate these new technologies and manage stranded assets.” He expressed that this rapidly changing environment will create competition and regulatory issues and disputes, both in the newly emerging sectors – as companies reposition themselves to influence and grow – and in the legacy sectors, as incumbents exit and consolidate.

Robert Grosvenor, managing director of A&M disputes and investigations in London, agreed with me that 2020 has been dominated with privacy and data challenges surrounding COVID-19. We discussed how this stems from the proliferation of remote working and related employee monitoring, as well as wider contract tracing and health screening activities, through to acceleration of data strategies and deployment of digital services. However, upon further conversation, he also explained that there are a number of other notable developments including new proposals and enactments of data protection laws around the world including China, Egypt, Singapore, Thailand, Turkey and UAE too.

Grosvenor expressed that in 2021, we will likely witness a debate over who controls (and benefits from) social data to intensify with the potential for legislation which will have to address competition, privacy, ethics and potential proprietary rights around models, algorithms and industrial scale harvesting of personal data. He said, “with the data economy, use of predictive analytics, big data and artificial intelligence will move from scientific endeavour to commoditized cloud services, not only within reach – but essential – to the majority of retail and consumer focused companies maximizing their digital markets.” This really is an area that I expect to see coming to the fore from a regulatory and legal perspective as everyone grapples with how data is being collected, analysed and used – never mind who owns and controls it. It is a topic where there have, in the past few weeks, been a number of major developments – in the UK, EU and US to name but three – something for all of us to keep an eye on in 2021 and beyond.

From my perspective, given the challenges and opportunities that lay ahead, due not only to COVID-related health and economic challenges, but also the uncertainly and disruption that Brexit will bring, I am sure the demand for forensic technology services is only going to increase. This is likely to be related to: data privacy concerns where there is a global move to more regulation; cyber concerns where the risk is continuing to be more of a boardroom issue and requires appropriate risk management strategies to be applied; electronic discovery where documents and data continues to both evolve in form and become ever more central to legal and regulatory issues; digital investigations where the challenges of putting the digital jigsaw back together is ever more complicated by new technologies or new forms of communication and peoples’ efforts to conceal what they are doing. Ultimately, there will always be someone doing something that they should not be doing and thus my team will always be busy!

Perhaps I will conclude with a poignant comment from Karl Hennessee, Senior Vice President at Airbus, who commented, “the many 2020 memes, jokes, and laments, and the fact that they were almost entirely shared remotely should have taught us something about ourselves. As good as technology has become and wherever it may go, humans as social animals will always dedicate their innovations and their intentions to simulating the oldest experience of the social animal: connection. Maybe 2020 has changed our means of fulfilment, but neither COVID-19, nor any other imaginable crisis could ever change our expectation for that basic quality that defines us. If 2021 brings mass vaccination, recovery, and ....dare we dream?...travel, then maybe the painfully dark clouds of 2020 will have a silver lining after all. Perhaps we will then genuinely appreciate - and take the time to really live - those connections we previously marked only with a "like" on social media.” I for one have learnt so much about myself during this time, and relished the opportunity to be more present (both and home and in a work environment). I truly hope that, as we move forward, some of these learnings will stay with us.

Well, there you have it, some really insightful sentiments from some of the greatest minds in my industry and I thank them for their contributions. All that leaves is for me to say:

Merry Christmas to you all. Take some time off to rest, reset and build on your resilience stores. We’re all going to need it as we take on the New Year collectively.