In 2025, companies and directors continued to be challenged by global volatility. This US administration is more disruptive to global trade than anticipated, creating worldwide tariff pressures. AI remains a significant consideration and the UK is under renewed risk of adopting US-style securities litigation.
“AI washing”, exaggerating AI capabilities in order to attract investment, has seen a significant escalation. The US Department of Justice has increasingly policed the practice, and earlier this year issued charges against directors of Nate Inc., which represented that its shopping application used AI to intelligently and autonomously complete merchandise orders, while the product actually relied on both bots and human contractors. Such indictments are often the “foot in the door” for securities litigation in the US and worldwide and are likely to increase as investigations are completed.
This year, English jurisprudence trended away from widespread use of representative claims akin to class actions in securities litigation (Wirral Council v Indivior plc [2025] EWCA Civ 40). It also appeared to be trending away from allowing claimants to rely on US market/index reliance (i.e. instead of having to prove they read and relied upon specific published statements, claimants can prove reliance more generally when they relied on the share price and value as accurate at material times) in corporate misrepresentation claims (pursuant to section 90A and Schedule 10A of FSMA, focused on misleading publications which are not in prospectuses or annual reports). Before the Court of Appeal could rule on Allianz Funds Multi-Strategy Trust and Others v Barclays PLC [2024] EWHC 2710 (Ch), where pleadings were struck out where the claimants pleaded market and index reliance, the appeal was withdrawn. Subsequently in Various Claimants v Standard Chartered PLC [2025] EWHC 698 (Ch), the court declined to strike "market reliance" claims. With divided precedents on the issue, the Various Claimants appeal (due to proceed in 2026) will have significant implications on the evidentiary threshold claimants will have to meet in order to succeed in corporate misrepresentation claims in England and Wales.
Raising the alarm
The Various Claimants appeal appears to be of particular importance as financial experts are raising alarms of an “AI bubble” arising from the inability of AI capabilities to perform as anticipated and not to be able to deliver a return on record investment. Any correction will undoubtedly lead to significant “AI washing” litigation. The coming year will be pivotal for insurers in determining the extent of risk they take on for the perfect storm developing.
