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Our Commitment to Diversity
Date: 10 June 2021
European Regulatory Newsletter
By: Mélanie Bruneau, Philip Torbøl, Antoine De Rohan Chabot, Matilde Manzi, Alessandro Di Mario


Single European Sky: The Wise Person Group Publishes a Statement on the Future of the Single European Sky

On 14 April 2021, the Wise Persons Group (WPG), a high-level aviation experts group set up by the European Commission (Commission), met to exchange views about the main challenges concerning the new Single European Sky (SES) framework, more specifically regarding the progress of negotiations of the Single European Sky 2+ (SES2+). The WPG published a Statement on the future of SES highlighting how the recommendations published in their 2019 Report for a more sustainable, efficient, and resilient European ATM sector remain relevant, despite the issues affecting the sector. The WPG therefore called on the European institutions, member states, and stakeholders to: (i) support the measures towards the improvement of the European ATM; (ii) constructively engage in the negotiations on SES2+, noting the emphasis on sovereignty, security, defense, and safety arguments as they are the core of the aviation system; (iii) support effective social dialogue towards the Digital European Sky and make sure that training and licensing rules are adequate; and (iv) work together in order to ensure that the European ATM network becomes more efficient, green, and fit for the future. This will enable a sustainable and swift recovery of the whole aviation sector.

SES: IATA Warns That the SES Project Risks to Collapse if European States Do Not Support the Commission’s Proposals to Reboot the Stalled Initiative

On 20 April 2021, the International Air Transport Association (IATA) warned that the SES project to reform Europe’s air traffic management system faces collapse if European states do not support the Commission’s initiative. “The European Commission has been trying to deliver the benefits of SES since the early 2000s. But state inaction has meant that none of its targets have been met. New legislation, as proposed by the Commission, is the only way to force the reform and improvements that are desperately needed. But the intransigence and selfishness of key EU states and their air navigation service providers threatens to collapse the latest Commission effort,” said Willie Walsh, IATA’s Director General.

IATA believes that the SES has so far failed because air navigation service providers have had inadequate targets and insufficient independent oversight. IATA supports the efforts of the Commission in a package that includes: (i) the creation of powerful, independent national economic regulators and an EU-wide regulatory agency; and (ii) the strengthening of the pan-European Network Manager to improve efficiency, which will help cut delays and emissions. IATA finds unacceptable that many European states are considering blocking the reforms in favor of an alternative vision and calls on the transport ministers to adopt a more ambitious general approach in line with the Commission’s proposal at the next Transport Council on 3 June.

Civil Aviation: EU Court of Justice Pronounces Its Judgment Regarding Internet Connection Service on Board Aircraft

On 15 April 2021, the Court of Justice of the European Union (Court of Justice) pronounced its decision in the case C‑515/19, regarding Internet connection service on board aircraft. The case concerned the request for a preliminary ruling referred by the Conseil d’État (Council of State, France) for the interpretation of the Decision No 626/2008/EC of the European Parliament and of the European Council on the selection and authorization of systems providing mobile satellite services. The preliminary ruling request was made in proceedings between Eutelsat SA and the French Authority for the Regulation of Electronic Communications and Postal Services, concerning the authority’s decision to grant rights of use to another company for complementary ground components of mobile satellite systems. In its judgment, the Court of Justice held that a mobile satellite system that is principally based, in terms of capacity of transmitted data, on complementary ground components that are installed so as to cover the entire territory of the European Union is not necessarily incompatible with the European legislative framework. The Court of Justice held that the increased use of ground components is possible provided that there is no distortion of competition and the satellite component of the system has real and specific usefulness.

Civil Aviation: Cargo Agency Conference Gives Freight Forwarders a Stronger Voice in the Development of CAC Resolution

On 5 April 2021, the Cargo Agency Conference (CAC) adopted a decision that, according to IATA, will give freight forwarders a stronger voice in the development of CAC resolutions. Consultation with Regional Joint Councils will be required before any future resolutions are proposed to and considered by the CAC. The CAC is composed only of airlines, while the Regional Joint Councils are composed of local freight forwarder associations affiliated with the International Federation of Freight Forwarders Associations, as well as individual freight forwarders and airlines. According to IATA, obtaining Regional Joint Council views in advance of adopting resolutions will strengthen the Air Cargo Program and ensure the efficient global implementation of resolutions. The aims of the new consultation process are to help run the Air Cargo Program more efficiently, reduce costs, and improve and enhance cargo distribution performance throughout the industry.

Aviation Safety: EU Aviation Safety Agency Updates the Review of Aviation Safety Issues Arising From the COVID-19 Pandemic Published in June 2020

On 30 April 2021, the EU Aviation Safety Agency (EASA) updated the “Review of Aviation Safety Issues Arising from the COVID-19 Pandemic.” Throughout the pandemic, EASA has worked closely with member state regulators and industry partners to monitor the safety situation so that guidance and safety promotion material has been able to evolve to meet the needs of the industry. Taking into consideration the ongoing impact of the pandemic on aviation, EASA has published this update to support the aviation industry in their preparations for an increase in flying activity over the coming months, identifying new safety issues, and amending or downgrading some existing issues. Organizations and member states should evaluate the applicability of the safety issues listed in the review to their own organization and, where applicable, capture them in their safety management system.

Aviation Safety: EASA Approves the First Virtual Reality-Based Flight Simulation Training Device

On 26 April 2021, the EASA granted the first certificate for a virtual reality (VR)-based flight simulation training device (FSTD). The device, for rotorcraft pilots, enhances safety by opening up the possibility of practicing risky maneuvers in a virtual environment. This addresses a key risk area in rotorcraft operations, where statistics show that around 20 percent of accidents occur during training flights. EASA is pursuing the modernization of its regulation for training devices to reflect their actual capability and technology advancement. The aim is to make a wider range of cost-effective training devices available to complement full-flight simulators and is being driven in part by training needs for new vertical takeoff and landing aircraft. As this is the first VR-based FSTD qualification, the process applied by EASA had to be adapted to ensure an equivalent safety level compliant with the FSTD certification specifications.

IATA Reports: IATA Publishes the Outlook for the Global Airline Industry

On 21 April 2021, the IATA published the outlook for the global airline industry. IATA expects net airline industry losses of US$47.7 billion in 2021 (net profit margin of -10.4 percent), which, however, represents an improvement on the estimated net industry loss of US$126.4 billion in 2020 (net profit margin of -33.9 percent). The outlook points to the start of industry recovery only towards the latter part of 2021. IATA estimates that travel (measured in revenue passenger kilometers (RPKs)) will recover to 43 percent of 2019 levels over the year. Domestic markets will improve faster than international travel. Overall, passenger numbers are expected to reach 2.4 billion in 2021. That is an improvement on the nearly 1.8 billion who travelled in 2020, but it is well below the 2019 peak of 4.5 billion. Cargo has outperformed the passenger business throughout the crisis, and this trend is expected to continue throughout 2021. Industry revenues are expected to total US$458 billion, which is just 55 percent of the US$838 billion generated in 2019 but represents a 23 percent growth on the US$372 billion generated in 2020. Airlines have not been able to cut costs as fast as revenues have fallen, as there has been a cost trend in fuel and infrastructure. Capacity is likely to return at a slower pace than demand, which reflects the pressure on airlines from debt and fuel prices to operate only cash flow-positive services. Taking cargo and passenger traffic into account, the overall weighted load factor is forecast to rise a little to 60.3 percent in 2021, which is considerably below the 66 percent IATA previously estimated to be breakeven for profitability in 2021.

IATA Reports: IATA Publishes Its February Air Passenger Market Analysis

On 7 April 2021, the IATA published its February Air Passenger Market Analysis, announcing that passenger traffic fell in February 2021, both compared to pre-COVID-19 levels (February 2019) and compared to the immediate month prior (January 2021). Total demand for air travel in February 2021 (measured in RPKs) was down 74.7 percent compared to February 2019, which was slightly worse than the 72.2 percent decline recorded in January 2021 versus two years ago. International passenger demand in February was 88.7 percent below February 2019, a further drop from the 85.7 percent year-to-year decline recorded in January 2021, and performance in all regions worsened compared to January 2021. Total domestic demand was down 51 percent in February 2021 versus pre-crisis levels, while in January 2021 it was down 47.8 percent. This largely was owing to weakness in China travel, driven by government requests that citizens stay at home during the Lunar New Year travel period. “February showed no indication of a recovery in demand for international air travel. In fact, most indicators went in the wrong direction as travel restrictions tightened in the face of continuing concerns over new coronavirus variants,” said Willie Walsh, IATA’s Director General. European carriers recorded an 89 percent decline in traffic in February 2021 versus February 2019.

IATA Reports: IATA Publishes Its February Air Cargo Market Analysis

On 7 April 2021, the IATA published its February Air Cargo Market Analysis, showing that air cargo demand continued to outperform pre-COVID-19 levels with demand up 9 percent over February 2019 and also showing strong month-on-month growth over January 2021 levels. Volumes have now returned to the 2018 levels seen prior to the U.S.-China trade war. Global demand (measured in cargo ton-kilometers) was up 9 percent compared to February 2019 and 1.5 percent compared to January 2021. All regions except for Latin America saw an improvement in air cargo demand compared to pre-COVID-19 levels, and North America and Africa were the strongest performers. Global capacity (measured in available cargo ton-kilometers) shrank 14.9 percent compared to February 2019, owing to new capacity cuts on the passenger side as governments tightened travel restrictions due to the recent spike in COVID-19 cases. Operating conditions remain supportive for air cargo: “Air cargo demand is not just recovering from the COVID-19 crisis, it is growing. With demand at 9 percent above pre-crisis levels (Feb 2019), one of the main challenges for air cargo is finding sufficient capacity. This makes cargo yields a bright spot in an otherwise bleak industry situation. It also highlights the need for clarity on government plans for a safe industry restart. Understanding how passenger demand could recover will indicate how much belly capacity will be available for air cargo. Being able to efficiently plan that into air cargo operations will be a key element for overall recovery,” said Willie Walsh, IATA’s Director General. European carriers posted a 4.7 percent increase in demand in February 2021 compared to same month in 2019, and cargo demand was largely unaffected by the new lockdowns in Europe.

IATA Reports: IATA Releases Its Airline 2020 Safety Report

On 5 April 2021, the IATA released the 57th edition of its Annual Safety Report (2020). In 2020, there were 38 accidents against 52 in 2019, while the number of fatal accidents decreased from eight in 2019 to five in 2020, with the number of fatalities declining from 240 in 2019 to 132 in 2020. The global COVID-19 pandemic had a severe impact on the aviation industry in 2020, causing a significant drop in the number of commercial flights operated. Just over 22 million flights were operated last year, which is about the same number as were flown in the 1990s. Commercial flights tracked worldwide fell about 53 percent when compared to 2019 due to travel restrictions imposed by government and health officials to control the spread of COVID-19. As a result, even with the lower number of accidents in 2020 when compared to 2019, the industry witnessed an increase in the global accident rate in 2020, up from 1.11 per million sectors in 2019 to 1.71 in 2020. However, the five-year average rate (2016–2020) was lower than that of the previous five-year period (2011–2015) at 1.38 vs. 2.24 accidents per million sectors. Over the last decade, the industry continued its 10-year trend of declining fatal accident rates and fatality risk. In 2011, there were 22 fatal accidents that resulted in 492 fatalities. Over the past five years, there have been an average of eight fatal accidents per year for commercial aircraft (passengers and cargo) resulting in 222 fatalities annually.


State Aid: The Commission Approves €462 Million Portuguese Support to Compensate TAP for Damage Suffered Due to COVID-19 Outbreak

On 23 April 2021, the Commission approved a €462 million Portuguese support measure to compensate Transportes Aéreos Portugueses, S.A. (TAP) for damage suffered due to the COVID-19 outbreak. The measure aims at compensating the airline for the damage suffered due to the COVID-19 outbreak between 19 March and 30 June 2020. The support will take the form of a €462 million loan that may be converted into capital and disbursed to TAP in one or several instalments. In order to ensure that there will be no overcompensation, the measure provides that Portugal, by September 2021, will review and report to the Commission on the amount of actual damage suffered, following independent verification based on the company’s audited accounts. Any public support received by TAP in excess of the actual damage will have to be returned to Portugal. The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve state aid granted to compensate specific companies or specific sectors for the damages directly caused by exceptional occurrences, such as the COVID-19 outbreak. The Commission found that the Portuguese measure will compensate damage that is directly linked to the COVID-19 outbreak and that the measure is proportionate, as the compensation does not exceed what is necessary to make good the damage.

State Aid: EU General Court Dismisses Ryanair’s Challenges of Danish and Swedish Aid to SAS for Damages Resulting From the Cancellation or Rescheduling of Flights in the Wake of Travel Restrictions Caused by the COVID-19 Pandemic

On 14 April 2021, the General Court of the European Union (General Court) dismissed Ryanair’s actions for annulment of the Commission’s decisions approving aid measures granted by Denmark (T‑378/20) and Sweden (T-379/20) to airline SAS for damages resulting from the cancellation or rescheduling of flights in the wake of travel restrictions caused by the COVID-19 pandemic. In its judgment, the General Court confirmed for the first time the legality of individual aid measures adopted for the COVID-19 pandemic in light of Article 107( 2)(b) TFEU. First, the General Court rejected Ryanair’s plea that aid granted intended to make good the damage suffered by only one company should have been incompatible with the internal market and noted that aid may be intended to make good the damage caused by an exceptional occurrence even if it benefits only an individual company. Second, the General Court rejected Ryanair’s argument disputing the proportionality of the aid measures and noted that the Commission had set out in sufficiently precise terms a calculation method for assessing that damage, which was capable of avoiding the risk of possible overcompensation. In addition, Denmark and Sweden will have to carry out an ex post assessment of the damage actually suffered by SAS and request, if necessary, the repayment of aid exceeding that damage. Third, the General Court rejected Ryanair’s plea claiming a breach of the principle of nondiscrimination and stated that individual aid, by its nature, brings about a difference in treatment, or even discrimination, which is inherent in the individual character of that measure. Fourth, the General Court, in the light of the free provision of services and the freedom of establishment, noted that Ryanair did not demonstrate how the exclusivity of the measure is capable of discouraging it from establishing itself in Denmark or Sweden or providing services from either of those countries or to them. Finally, in regard to case T-379/20, the General Court found, in addition, that the aid measure notified by Sweden is subsidiary to the Swedish aid scheme adopted under Article 107(3)(b) TFEU in order to deal with the disturbance in the Swedish economy caused by the COVID-19 pandemic. In that regard, the General Court stated that the TFEU does not preclude a concurrent application of Article 107(2)(b) and Article 107(3)(b) TFEU, provided that the conditions of each of those two provisions are met.

State Aid: The Commission Approves the Extension and Modification of a Belgian Scheme to Support Airports in Wallonia

On 12 April 2021, the Commission found that the extension and modification of a Belgian scheme to support airports in Wallonia in the context of the COVID-19 pandemic is in line with the temporary framework on state aid (Temporary Framework). Belgium notified the Commission of its intention to prolong the existing measure approved on 11 April 2020 in the form of a moratorium allowing the operators of Walloon airports to defer the payment of concession fees due for the year 2021 in return for the payment of interest on the amounts due. This measure allows Walloonairports to benefit from short-term liquidity to avoid any risk of default. The potential budget of the measure for 2021 is around €17.5 million, bringing the total potential aid budget to around €34.7 million since 2020. The Commission considered that the measure is compatible with the conditions of the Temporary Framework, in particular: (i) the moratoria, equivalent to loans, will be granted before 31 December 2021 and will have a maximum duration of six years; (ii) for loans maturing after 2021, the amount of royalties benefiting from the moratorium does not exceed the limits set by the Temporary Framework; (iii) the moratorium partially covers the working capital needs of the beneficiaries; and (iv) the beneficiaries are not firms in difficulty. The Commission concluded that the measure was necessary, appropriate, and proportionate to remedy a serious disturbance in the economy of a member state in accordance with Article 107(3)(b) of the TFEU and the conditions set out in the Temporary Framework.

State Aid: The Commission Approves a French Measure of up to €4 Billion to Recapitalize Air France

On 6 April 2021, the Commission approved a French measure of up to €4 billion to recapitalize Air France under the Temporary Framework. The recapitalization by France, which is part of the first step of the recapitalization plan of the group, comprises: (i) the conversion of the €3 billion state loan already granted by France (approved by the Commission in May 2020) into a hybrid capital instrument; and (ii) a capital injection by the state, through the subscription of new shares in a share capital increase opened to existing shareholders and the market, in a limit of €1 billion depending on the size of this operation. KLM, the other strategic subsidiary of the Air France-KLM group, will not benefit from the aid. Among others, this is ensured by: (i) the specific features of the aid instruments, (ii) the corporate and governance structure of the Air France-KLM group, and (iii) a commitment that relationships between Air France and its holding company, on the one hand, and KLM, on the other hand, will continue to be based on market terms. The Commission found that the French measure is necessary, appropriate, and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) of the TFEU and the conditions set out in the Temporary Framework. In particular, the Commission found that the recapitalization measure will contribute to managing the economic impact of the COVID-19 outbreak in France. The measure aims at restoring the balance sheet position and liquidity of Air France and its holding company in the exceptional situation caused by the COVID-19 pandemic, while maintaining the necessary safeguards to limit competition distortions.


Passengers’ Rights: Court of Justice Finds That the Mere Diversion of a Flight to a Nearby Airport Does Not Grant a Right to Flat-Rate Compensation

On 22 April 2021, the Court of Justice pronounced its decision in the case C‑826/19, WZ against Austrian Airlines AG. The case concerned the request for a preliminary ruling referred by a the Landsgericht Korneuburg (Regional Court, Korneuburg, Austria), for the interpretation of the Air Passenger Rights Regulation, which arose in proceedings concerning Austrian Airlines’ refusal to compensate a passenger for the diversion of his flight from Berlin Tegel to Berlin Schönefeld, with the delay of one hour. The Court of Justice held that the diversion of a flight to an airport serving the same town, city, or region does not grant the passenger a right to compensation for cancellation of a flight. In order for the airport of substitution to be regarded as serving the same town, city, or region, that airport must not necessarily be situated in the same territory, in an administrative sense, as the town, city, or region in which the airport for which the booking was made is situated. What matters is that it is in close proximity to that territory. By contrast, the passenger is entitled to flat-rate compensation where the passenger reaches his or her final destination that is either the destination airport for which the booking was made or another nearby destination agreed to with the passenger three hours or more after the original planned arrival time. Furthermore, the Court of Justice found that it is for the air carrier to offer, on its own initiative, bearing the cost of transfer either to the destination airport for which the booking was made or, where appropriate, to another nearby destination agreed to with the passenger. If the air carrier fails to comply with its obligation to bear that cost, the passenger is entitled to reimbursement of the sums expended that, in the light of the specific circumstances of each case, are necessary, appropriate, and reasonable in order to remedy the failure of the air carrier.

Passengers’ Rights: Court of Justice Pronounces Its Decision in a Dispute Between the Airline Braathens Regional Aviation and an Air Passenger

On 15 April 2021, the Court of Justice pronounced its decision in the Case C-30/19, Diskrimineringsombudsmannen (representing an air passenger) against Braathens Regional Aviation AB (Braathens). The case arose in 2015, when the captain on board an internal Swedish flight operated by Braathens decided to subject a passenger of Chilean origin resident in Stockholm to an additional security check. More specifically, the case concerned the request for a preliminary ruling referred by the Högsta domstolen (Supreme Court, Sweden) for the interpretation of the Directive 2000/43/EC, implementing the principle of equal treatment between persons irrespective of racial or ethnic origin, read in the light of Article 47 of the Charter of Fundamental Rights of the European Union, which guarantees every person the right to an effective judicial remedy. In particular, the request for a preliminary ruling sought to ascertain whether such a person has that right in the context of an action for damages where the defendant agrees to pay the compensation sought, but he or she does not admit any form of discrimination. The Court of Justice held that EU law precludes a national law that prevents a court hearing an action for compensation based on an allegation of discrimination from making a finding on the existence of that discrimination where the defendant agrees to pay the compensation claimed without recognizing that discrimination. The payment of the monetary amount alone is not capable of ensuring effective judicial protection for a person who seeks to obtain a ruling that he or she has been the victim of such discrimination.


International Trade: European Parliament’s Committee on Transport and Tourism Gave a Greenlight to Updated EU-U.S. Air Transport Agreement, Removing the Time Limit for Leasing an Aircraft With Crew.

On 15 April 2021, the European Parliament’s Committee on Transport and Tourism gave the greenlight to updated EU-U.S. air transport agreement, removing the time limit for leasing an aircraft with crew. The new EU-US agreement on “the time limitations on arrangements for the provision of aircraft with crew” seeks to clarify the 2007 EU-U.S. air transport agreement and to remove any time limit on the possibilities for airlines to lease aircraft along with their crew, called “wet leasing.” Signed on 27 August 2019, the new agreement also covers Iceland and Norway, who joined the EU-U.S. aviation agreement in 2011. It confirms the establishment of clear and nonrestrictive wet lease arrangements between the parties and states that no party shall impose time limitations on the operation of any wet lease. The agreement, which was scrutinized by European Parliament rapporteur Maria Grapini (S&D, RO) and backed by 48 votes (none against and without abstentions), is set to maximize the benefits for consumers, airlines, labor, and communities on both sides, as well as strengthen the transatlantic air transportation system. In terms of next steps, the European Parliament is set to vote on the wet lease agreement in one of the next plenary sessions. Pending its entry into force, the parties have already applied the new agreement provisionally since the date of signature.


Event: EUROCONTROL’s ECHO Workshop on Higher Airspace Demand

From 29 June to 1 July 2021, the European Organisation for the Safety of Air Navigation (EUROCONTROL) is organizing a three-day online demand and exploratory workshop, as part of the European Concept of Higher Airspace Operations (ECHO) project. During the workshop, the ECHO project partners will provide an overview of the status of the project and focus on the analysis of the demand for higher airspace on the basis of studies, use cases, and principles to be able to predict the types of vehicles and their operational requirements. This will be the first in a series of workshops to outline the ECHO project activities and progress. The workshop aims to bring together the wide aviation community to: (i) review and provide feedback on the initial demand analysis for ECHO, (ii) further discuss the principles agreed in ECHO, (iii) focus on how to apply those principles to ECHO, which will be the main deliverable of the ECHO project.

Event: EASA’s SAFE 360° – Safety in Aviation Forum for Europe 2021

From 8 to 10 June 2021, EASA organized the SAFE 360° – Safety in Aviation Forum for Europe 2021, an industry-wide conversation on the safety issues concerning the air operations community. The SAFE 360° conference enabled the 360° industry-wide review of the most critical safety issues that are currently impeding recovery. SAFE 360˚ 2021 was organized in three days: (i) Day 1: high-level panels that discussed the new safety landscape due to the COVID-19 pandemic; (ii) Day 2: panels on (a) training effectiveness and competence, (b) approach path management, and (c) turnaround safety; and (iii) Day 3: 360˚ workshop analyzing key safety issues from a 360˚perspective on: (a) the entry of aircraft performance data, (b) the safe use of airspace, and (c) monitoring safety issues with flight data monitoring.

Event: EUROCONTROL’s Webinar “EASA AI Trustworthiness Guidance: Paving the Way to Safety-Related AI Certification”

On 28 April 2021, EUROCONTROL organized the webinar “EASA AI Trustworthiness Guidance: paving the way to safety-related AI certification.” The webinar organized by EUROCONTROL and moderated by EASA is the fourth webinar in the joint “FLY AI” webinar series. In this webinar, the role of EASA was discussed regarding artificial intelligence (AI), highlighting the timeline and principles of the EASA AI road map and detailing the key elements of the first release of the AI trustworthiness guidance document. A panel of AI experts showed how these guidelines have already been implemented for some specific aviation use cases in view of further operational deployments. The video recordings of the webinar are now available on the dedicated page.

Event: EUROCONTROL’s Stakeholder Forum on Aviation’s Impact on Non-CO₂ Emissions

On 27 April 2021, EUROCONTROL organized the webinar “Stakeholder Forum on aviation’s impact on non-CO₂ emissions – How can the aviation industry best address climate impacts other than CO₂?” The scope of the webinar was to explore the non-CO2 climate impact of flying, focusing primarily on what can be done to reduce the formation of contrails and cirrus clouds, as well as the emission of nitrogen oxides. The video recordings of the webinar are now available on the dedicated page.

This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer. Any views expressed herein are those of the author(s) and not necessarily those of the law firm's clients.

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