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Current affairs wrap up: business, legal and markets insights from May 2025

Each month, Jake Schogger (ex-Magic Circle lawyer and founder of Commercial Law Academy) and Peter Watson (ex-stock broker, head hunter and founder of Watson's Daily) host a free webinar summarising the key current affairs and trends from the previous month, including insights from a business, markets and legal perspective.  

To register for future sessions, check out https://citycareerseries.clickmeeting.com

This blog post covers topical legal current affairs from May 2025, including legal challenges to Trump's authority, EY delaying employee start dates, the regulation of AI-powered facial recognition technology, and how AI can reduce law firms' client bills.

Please note that these articles do not constitute legal advice and should not be relied upon. They simply reflect the author's research and opinion.

The US Supreme Court is currently debating whether individual federal judges are able to block Trump’s executive orders on a national basis. The implications here could be pretty big. At the moment, opinion is split. A decision on this is expected by June or early July. 

WHAT IS THE CURRENT SITUATION HERE AND WHAT ARE THE ARGUMENTS? 

Tariffs typically need to be approved by Congress. However, Trump has so far circumvented that requirement by claiming that the country’s trade deficits amount to a national emergency. 

The concept of a “national emergency” here is key, as Trump is attempting to justify his executive orders on the basis that the International Emergency Economic Powers Act grants such powers where necessary to address “unusual and extraordinary” threats during a national emergency.

However, this reliance on the Act to impose tariffs and other executive orders at will has been challenged by a number of lawsuits, including those brought by businesses impacted by the tariffs, as well as the Governor of California.

So how are these lawsuits going?

Well, last week, a US trade court ruled that Trump’s actions exceeded “any authority granted to the president…to regulate importation by means of tariffs”, and so these actions were prohibited under federal law. The ruling immediately invalidated all of the tariff orders issued in reliance on the International Emergency Economic Powers Act.

According to the Guardian, a day later, the Trump administration filed for “emergency relief” from the ruling “to avoid the irreparable national-security and economic harms at stake”. An appeals court then agreed a temporary pause on the trade court’s decision, pending an appeal hearing.

According to USA today, the Trump administration then – yesterday - asked the Supreme Court to let it carry out large-scale staffing cuts and agency restructuring while the president's authority to make such sweeping changes without Congress is being challenged.

What happens if Trump ultimately loses these legal battles? Well, he would have to take a slower approach to the imposition of tariffs and other executive orders, securing Congress’ permission where necessary.

I wanted to keep this brief, given the complexities, but below is an article in the chat covering the debate around whether judges will actually be able to enforce their rulings in practice.

Sources / further research:  

EY delayed start dates for its consultancy recruits – for the third year in a row 😱! It said that they won’t be needed until March 2026 at the earliest. Clearly these recruits are casualties of the poorer-than-expected deal pipeline…WHAT IS THE LEGAL POSITION ON THIS? WHAT ARE THE OBLIGATIONS ON THE EMPLOYER AND THE EMPLOYER?

Regarding the legal position, it would firstly depend on whether the grads have signed contracts. I’m guessing they haven’t – I didn’t sign my training contract until day 1 of the role! - meaning there may not be any obligation on EY to actually go ahead with formally hiring them, especially if the offer letter includes the right to delay the start date or withdraw the offer.

If contracts had been signed, there may be a legal obligation to pay the individual in respect of their notice period in accordance with the terms of the (binding) employment contract. However, this might not be more than a week’s salary (the legal minimum when an employee has just started, unless the contract is more generous). Note that failing to pay notice can result in a claim for wrongful dismissal.

Of course, a contract can be varied with consent – even if contracts were signed, I would imagine future EY hires would likely give their consent to a delayed start date if asked, as it can be intimidating raising objections before you’ve even started your role. 

I can’t imagine that I would have kicked off had Freshfields asked me to delay my start date at the time, even if I had had every right to (not that the firm did).

However, if students start to perceive EY offers as unreliable, this could have a broader negative reputational impact. If faced with offers from EY, KPMG and Deloitte, wouldn’t you be more inclined to accept an offer from a firm that hasn’t repeatedly messed around its prospective hires in the past?

There were calls in a report by the Ada Lovelace Institute to do something about “significant gaps and fragmentation across biometrics governance” regarding the use of AI in facial recognition. Regulation is surely needed as one observer said that “we’re in a situation where we’ve got analogue laws in a digital age”. WHAT’S THE CURRENT LEGAL POSITION ON THE USE OF AI IN FACIAL RECOGNITION?

There is no specific facial recognition statute in the UK. The Government has previously published guidance designed to promote the ethical and legal use of AI-powered facial recognition. However, this was only guidance - published back in 2021 – and things have obviously progressed significantly in the world of AI since then anyway.

So, what regulation does exist?

Well, data protection law imposes a number of responsibilities that are relevant in this context. For example, according to Arag Law, data controllers must “demonstrate that their processing can be justified as fair, necessary and proportionate”, and must adhere to a number of data protection principles such as those relating to security, the right of erasure, and so on.

Note that much of the commentary around the use of AI in facial recognition seems to revolve around the police. Apparently the Home Office is continuing to encourage the police to make more use of facial recognition technology, given its purported effectiveness. 

This use was previously challenged, but the Court of Appeal in 2020 found that there is a legal framework for police to use live facial recognition technology, provided the police complies with privacy, data protection and equality laws.

Police aside, according to Legal Vision, using biometric data - which includes the types of data derived from facial recognition technology - is generally prohibited by data protection law, unless very limited exceptions apply, for example if consent is freely given, informed, specific, and unambiguous.

Sources / further research:  

Meanwhile, there is increasing scrutiny from the client side about whether law firms’ use of AI is going to result in lower bills given that law firms tend to charge by the hour. Will this result in a complete change of the traditional business model not just for law firms but also for other professions that charge for their services in this way? HOW COULD AI REDUCE CLIENT BILLS AND WHAT ARE COMPANIES DOING ABOUT THIS CURRENTLY?

Traditionally, clients have paid all lawyers by the hour, including the most junior lawyers. 

At times, junior lawyers can rack up hundreds of hours – meaning thousands of pounds in fees - carrying out fairly menial and repetitive tasks, such as scanning thousands of documents for issues during due diligence or document review exercises.

AI can – and already has started to – take over some of these more menial tasks, with algorithms helping to scan documents and flag potential issues. Similarly, automation exists to help create first drafts of contracts far more quickly, with lawyers entering key information into some kind of form, which is then automatically woven into a template contract. This all means that client bills should reduce, as the time it takes to work on their matters should (in theory at least) reduce.

Granted, some billable time will be required for lawyers to spot check, review and analyse the work carried out by AI. But law firm clients are obviously hoping that this process will be significantly quicker, and therefore cheaper. This all feeds into the debate about the billable hour – should law firms start charging based more on value (which arguably could involve charging for the sophistication of the AI it employs to save lawyer hours)? 

If so, should this equate to what it would have cost for humans to carry out the work? Who knows, but I would imagine that there will be intense competition around fees as these AI-driven processes become more efficient and reliable. Especially as clients are going to inevitably want to see more detailed evidence up front of how a prospective legal adviser intends to use AI to save time and cost.

Sources / further research: