Edward Fennell’s LEGAL DIARY

Diary news plus insights, commentary and appointments from the legal world

12 July 2024

Editorial contact: fennell.edward@yahoo.com

SHORT THOUGHT FOR THE WEEK: A BLaiR Future?

According to the just published Tolley^® report How Generative AI is Transforming Tax Practice UK tax professionals have been quick to recognise the efficiency benefits of generative AI.  The survey of more than four hundred UK tax professionals in private and in-house practice reveals that 66% of them are either using or plan to use AI for work purposes. In the light of this Tony Blair’s recent observation that “conventional policy” will not be enough to boost the economy to the extent required must be taken seriously. “There is only one game-changer: harnessing effectively the 21st-century technological revolution,” he said.

Whatever one may feel about some of his decision-making, Blair’s analysis was always deeply perceptive. But he made an odd mis-step over identity cards. What is really needed is an AI driven ‘National entitlement card’ awarded at birth to UK citizens and  also presented as part of  citizenship ceremonies.

As Tolley’s tax professionals have recognised, maybe, three things will now always be with us – death, taxes and AI.

The LegalDiarist

In this edition

+ LEGAL DIARY OF THE WEEK

• Burges Salmon helps boost Ukraine economy
• Natural capital? Here’s the industry-first guide for lawyers

• The Downside of Renewables

• LSSA Gets A New Member

+ CONTRIBUTED ARTICLE OF THE WEEK

HOW AI IS TRANSFORMING THE LEGAL SECTOR AND THE WAY LAWYERS WORK

by Jonah Ellin, Senior Vice President, Product for Brand and Content Protection, Corsearch

+ LEGAL COMMENT OF THE WEEK

on the new Government’s legal appointments, changes to corporate law, employees’ rights, planning reform, the proposed new non-dom regime, hearing loss in the military and wfh restrictions.

+ APPOINTMENT OF THE WEEK

William Fry LLP

LEGAL DIARY OF THE WEEK

Burges Salmon helps boost Ukraine economy

It is anybody’s guess as to what will happen to Ukraine in the months (and years) ahead. Even so it is clear that the country needs economic as well as military support if it is to survive and make a recovery from Putin’s criminal invasion.

Step forward then Burges Salmon which has advised EFSE (the European Fund for Southeast Europe), a fund advised by Finance in Motion, on a €10 million financing to Bank Lviv. The transaction is particularly aimed at supporting micro, small and medium-sized enterprises (MSME) in Ukraine with a view to achieving ‘stability and growth’ despite the fog of war. (Finance in Motion is a global impact asset manager focused exclusively on sustainable development in emerging markets and developing economies).

The loan was signed during the recent Ukraine Recovery Conference in Berlin, attended by a number of world leaders including Volodymyr Zelenskyy, Olaf Scholz, Ursula von der Leyen and David Cameron (remember him? used to be Prime Minister and retuned the role as part of the D-Day ceremonies).

added: “We are proud to have worked with the EFSE and FIM teams on this financing, supporting recovery and growth in Ukraine, and promoting business continuity for MSMEs in the region,” commented Rachael Ruane who led the  Burges Salmon team along with Luke Addison and solicitor Thomas Papke.

Meanwhile Jasminka Begert, Fund Director for EFSE’s mandate at Finance in Motion, commented, “The cooperation between EFSE and Bank Lviv is a significant step towards economic recovery in Ukraine, aligning with broader efforts to expedite the country’s recovery and economic integration.”

Natural capital? Here’s the industry-first guide for lawyers

By all accounts the new Labour Government is going big – indeed very big – on green investment and green technology. In fairness, however, the Sunak Regime (RIP) had already made a start withits new ‘natural capital’ legislation which came into place back in the Spring. And it is in response to that initiative that Ben Sharples, Partner and Head of Natural Capital at Michelmores and regarded as a leading national Natural Capital legal expert, has just published A Practical Guide to Payments for Environmental Services.

As Sharples explains, “The question that I am asked most regularly is ‘how do we commercialise these opportunities?’ The environmental services market is now set to grow with an increasing amount of climate risk mitigation responsibility falling on landowners while at then same time they mustn continue to balancing their own costs and make a living.

According to Sharples the lawyer’s job remains that of sensibly drafting and structuring environmental service deals so that the practical benefits of environmental improvement can be delivered hand in glove with financial return, “This is what this guide aims to support,” he says.

The guide is written specifically for legal professionals, surveyors, landowners and students. It is intended to be a ‘helpful companion to those seeking to understand the many and varied opportunities that exist in the market for environmental services and who are responsible for providing professional advice supporting the structuring of deals’.  

Sharples himself has a foot in both camps. Following a degree in agriculture at Newcastle University, he qualified as a Chartered Surveyor and Valuer managing landed estates and carrying out a wide range of professional work. Subsequently he retrained as a lawyer and for the past two decades has specialised in resolving disputes arising from the use and ownership of rural land. He says that he draws on his dual qualification in providing clients with pragmatic legal advice avoiding disputes wherever possible.

A Practical Guide to Payments for Environmental Services is available for purchase at ‘A Practical Guide to Payments for Environmental Services’ by Ben Sharples – Law Brief Publishing

The Downside of Renewables

Renewable energy? Must be all right, mustn’t it?

Well, one would hope so given all the emphasis being placed on it (especially this week). However there might be a dark side. According to research published this week there is a rising trend of lawsuits against renewable energy and transition mineral mining firms because of their alleged  systemic human rights abuses.

According to the Business & Human Rights Resource Centre (BHRRC) in its report Unjust transition on trial,  there have been no less than 60 legal cases launched around the world by ‘Indigenous Peoples, other communities and workers directly impacted by human rights harms associated with the growth of the renewable energy value chain’. More than 70% of these cases have been filed since 2018, highlighting a significant growth in this type of litigation as the energy transition has developed momentum. As a result these kinds of cases are now threatening to derail the rapid transition to clean energy

The report, highlights instances brought against both the private sector and states in transition mineral mining and three renewable energy sectors (solar, wind and hydropower). “These cases were found to be challenging a wide range of harms, with nearly 80% seeking to permanently or temporarily halt the project in question because of alleged human rights and environmental abuses, particularly where firms have failed to properly consult hosting communities,” says BHRRC.

According to Elodie Aba, the BHRRC Senior Legal Researcher, “Companies and investors associated with the renewable energy value chain must urgently address these risks. Robust implementation of human rights responsibilities by business from the initial phases of any project can help build public trust in the energy transition, ensuring it can be fast because it is fair. The private sector must urgently commit to shared prosperity, fair negotiations and a duty of care for the human rights of those directly impacted by the energy transition. The rising number of legal challenges makes it clear that disregard for the human rights of host and frontline communities is likely to derail the much-needed clean energy transition.”

So that is pretty clear then.

LSSA Gets A New Member

With legal technology now the engine of legal services so the trade bodies which represent the technologists are increasingly important – and it is vital that they fully represent the industry replete as it is with thrusting entrepreneurs.

So the welcome given by the LSSA (Legal Software Suppliers Association) to its newest member, LawNeeds, was fulsome. “The LSSA is delighted to welcome LawNeeds to our vibrant and diverse community of legal tech vendors,” says LSSA’s CEO, Kevin Horlock. “We are confident that their expertise will be a valuable addition to our association, fostering further advancements in legal technology.”

 Set up earlier this year in London by its CEO, Steve Okolo (above) the company says that it aims to help provide legal services ‘on the go’. Its mobile app is powered by artificial intelligence, and the business’s ambition is to ‘revolutionize the accessibility and delivery of legal services in the UK’ (i.e join a large and growing club).

Specialising in contract law, family law, immigration law, and road traffic offenses, LawNeeds’ mobile app provides personalised (and affordable) legal services to users. It now wants to boost its brand by “enhancing its credibility and trustworthiness through recognised industry affiliation and networking opportunities with the LSSA.”

Yes, well, that hits the nail on the head. In this ‘post-Post Office scandal’ era credibility and trustworthiness are all important for technological innovation and cannot be taken for granted. A lot will depend on the LSSA keeping up industry standards.

CONTRIBUTED ARTICLE OF THE WEEK

HOW AI IS TRANSFORMING THE LEGAL SECTOR AND THE WAY LAWYERS WORK

by Jonah Ellin, Senior Vice President, Product for Brand and Content Protection, Corsearch

More than just a 2024 buzzword, artificial intelligence (AI) is both a technological phenomenon and a transformative force reshaping the way we work. The legal sector is no exception to this. AI is becoming deeply imbedded in the industry thanks to its ability to automate tasks, enhance efficiency and analyse large amounts of data.

Streamlining workflows

One of the most significant advantages of AI in the legal sector is its ability to swiftly complete arduous and labour-intensive tasks that would otherwise be time-consuming for legal professionals. Brand protection specialists are leveraging the technology to gather more data, prioritise it quickly, make expert decisions and take faster action by automatically identifying multiple instances of the same and similar threats to their brands.

Enhanced accuracy

Accuracy is pivotal in the legal sector, where human error can have costly implications, including financial, reputational and weakened client relations. By leveraging AI to review data, errors and omissions can be minimised, often reducing the need for re-work. This is important as AI can catch mistakes that may be overlooked by human reviewers.

For intellectual property professionals, AI is a powerful tool to counter the changing tactics of infringers who seek to avoid detection and operate across a diverse multichannel of online platforms. Analysing images, product descriptions, pricing, and seller details is a taxing process for humans with little margin for error. AI can continuously sift through the relevant data at scale, grouping together issues, enhancing brand protection programmes and allowing human resource to be spent where it is most needed, on the expert decisions.

Tangible benefits

The broader benefits of AI have made its implementation a non-negotiable for law firms. The automation of a wide range of tasks has reduced the need for excessive human labour, and firms successfully leveraging the technology have seen significant cost savings.

On the client side, AI has improved response times through tools like chatbots and virtual assistants. What’s more, through the analysis of client data on an individual basis, it’s providing a more personalised service. The key takeaway for law bosses is improved client relations.

AI presents numerous opportunities to improve both the way legal professionals work and the resulting product offered. The technology is still in its infancy and there’s no doubt that the legal sector will continue to evolve in line with its development.

LEGAL COMMENT OF THE WEEK

TOPIC: The appointment of the new Attorney General, Richard Hermer KC.

COMMENT BY: Sam Townend KC, Chair of the Bar Council

 “The appointment by the Prime Minister of Richard Hermer KC as Attorney General, with a stellar career as public lawyer at the self-employed Bar behind him, sends a strong message of the Government’s intention to observe domestic law obligations and commitment to the international rules-based order. 

“From my experience, lawyers in Europe and beyond had been bemused and saddened by recent and repeated undermining of our long and proud legal tradition, including as principal drafters of the European Convention of Human Rights, by legislative measures such as the Safety of Rwanda Act and negative rhetoric about whether the country had to keep to its treaty and domestic legal obligations. 

“The UK’s tremendous legal services market, including £5.7 billion of legal exports, depends upon its reputation as stalwart adherents to the rule of law. The Bar Council hopes that Lord Hermer KC’s appointment is the start of the process of restoration of our legal reputation abroad.”

TOPIC: The appointment of Shabana Mahmood as the new Lord Chancellor and Secretary of State for Justice

COMMENT BY: Professor Chris Bones, Chair of CILEX 

“CILEX is looking forward to working with Shabana Mahmood, as the new Lord Chancellor and Secretary of State for Justice.

“There can be no understating the size of the task ahead for the new Secretary of State and we stand ready to assist her in meeting these challenges. Urgent measures are needed to tackle the increasing backlog across courts, rising barriers in access to justice and the continuing need to improve levels of diversity in the judiciary. We hope that the new Lord Chancellor will make these issues a priority and we look to her to continue the government’s support for solutions that both provide pathways to solving these problems and enable CILEX Lawyers to play a full part in the justice system.

“We look forward to meeting with Shabana Mahmood in due course and we hope to continue the positive and constructive relationship we held with her predecessors, working together to progress these issues and discussing the ways in which CILEX can be part of the solution.”

TOPIC:  The impact of the General Election on Corporate Law.

 COMMENT BY:  Nick Graves, Head of Corporate, Burges Salmon

“Following Labour’s victory in last week’s general election, should we expect any material impact on the current changes which are planned to UK company law and regulation?

The short answer is probably not. The new government is focused on growth and as the FT reports  the chancellor is expected to set this as the UK’s “national mission”. In this context we anticipate that the FCA will continue with its reform of the UK Listing Regime. There seems no reason for a change of course. Premium listed companies will soon be able to participate in auctions on an equal footing with listed companies from other jurisdictions. That should make a real difference. 

“The steady implementation of the Economic Crime and Corporate Transparency Act 2023 is likely to continue. The same applies to the new UK public offers and admission to trading regime. Although the Public Offers and Admissions to Trading Regulations 2024 have been published a lot of work remains to be done. The FCA is currently developing its consultation proposals with a view to publishing its consultation paper in “summer 2024”.

“One area of uncertainty is the approach which the new government will take to establishing the new Audit, Reporting and Governance Authority (ARGA). This was parked by the previous government. For the moment we anticipate that state of affairs will continue but we should know soon as The State Opening of Parliament and The King’s Speech is currently scheduled to take place on Wednesday 17 July 2024.”

TOPIC: the announcement by Rachel Reeves, the Chancellor of the Exchequer. of reform of the planning rules to help drive growth.

COMMENT BY: Amit Sharma, Real Estate Partner,  Excello Law

“I’m sure many in the real estate sector welcome a reform to the planning system however caution should be exercised because of the fact that any rushed legislation (the recent Building Safety Act and the like being a prime example of badly drafted law) may create more problems than it serves to resolve.

“In my opinion planning has become too political in the way that certain things are done at the local level and there has to be clear balance between competing interests in residential development. While there is plenty of space in the United Kingdom the question has to be is there plenty of room for infrastructure to cope for further development and it is these considerations that need to be properly balanced.

“Planning has to be now brought into the 21st century in terms of ease and speed to meet the demands society is placing on the various uses and developments in the country.”

TOPIC: The view expressed by  Labour MP, Jonathan Reynolds, that Labour will quickly begin in extra employee rights in the workplace such as Day One employment rights and a ban on ‘Fire and Rehire’. 

COMMENT BY:  Beverley Sunderland Partner at Crossland Employment Solicitors

“If the law changes to include day one employment rights, subject to a probationary period, there is the very real possibility that those employees currently under two years’ service, where the employer is undecided about them, will be dismissed before any new laws come in.” 

“Although Labour has committed to making a number of changes within 100 days of them being in power, the reality is that changes to both primary and secondary legislation takes time. Whether Labour elect to introduce or amend primary legislation such as the Employment Rights Act 1996 (which would be required to give day one employment rights and to remove the separate worker’s status) and the Trade Union and Labour Relations (Consolidation) Act 1992 which governs collective consultation in redundancy situations, then this will require consultation and the approval of both Houses. Even if they make the changes through secondary legislation – regulations, or want to amend existing regulations, such as the TUPE regulations, this will have to be consulted on. Therefore, although Labour may start the process within 100 days, it is highly unlikely to be law in that time frame.

“There is also a marked difference between making sweeping promises in an election manifesto, and understanding the detailed reasons why perhaps this is not as easy as it might appear to be to the untrained eye. The government will need employment law experts or understand all of the twists and turns and case law and not leave it to civil servants who do not have that experience. 

“There is also the spectre of unintended consequences. If the law changes to include day one employment rights (subject to a probationary period) then there is the very real possibility that all those employees currently under two years’ service, where the employer is undecided about them, will be dismissed before any new laws come in.

We do not yet have the detail of exactly what the new day one unfair dismissal protection will look like – will probationary periods be capped in terms of length? However, once an employee has passed their probation then employers will still be able to dismiss for the same fair reasons: conduct, capability, redundancy, illegality and some other substantial reason. However, to be a fair dismissal the employer must follow a fair process – a series of warnings for capability or conduct (other than gross misconduct), consultation in redundancy. At the moment, although following such processes are considered good practice, the fact is that employers do not generally do so for employees under two years.

“With Labour’s plans to make fire and rehire harder, banning zero hours contracts, changing the TUPE legislation, to name but a few, there is no doubt that HR professionals and their advisers are going to be very busy in trying to understand the new legislation and, more importantly, trying to implement it. There is also going to be that long period when the actual meaning of new legislation is tested in the employment tribunals and the inevitable uncertainty that comes with this. After all, it only took from April 2012 (Lock v British Gas) to October 2023 (Chief Constable of Police Service of Northern Ireland v Agnew) for there to be some element of certainty in relation to how the wording in the Employment Rights Act should be interpreted when it came to what a worker was paid when on holiday and how far back claims could be made.” 

TOPIC: The new Government’s plans to change the Non-Dom regime

COMMENT BY: Liz Palmer, Head of Private Wealth, Howard Kennedy

“With Labour in power, it is expected that non-dom status will be abolished and replaced with short-term residence scheme, the use of offshore trusts to avoid IHT will be ended and further non-dom loopholes will be closed. This represents a major shift in UK tax policy and could be a deal-breaker for many non-doms with significant assets abroad, possibly acquired, or inherited years before coming to the UK.

“While the Labour manifesto reiterates the end of using offshore trusts to avoid IHT, it notably stops short of its original statement that this would apply to trusts whenever settled. A consultation is anticipated or, at the very least, hopefully any legislation will include a grandfathering provision for trusts settled before a specific date to prevent claims of unfairly retroactive effects. The prospect of offshore property within an excluded property trust, which may have been settled years before the settlor’s arrival in the UK, being subject to IHT was unexpected before the Labour paper’s publication in April.

“While Labour could opt to delay the changes, beyond the Conservative’s April 2025 deadline, Labour must carefully balance its aim of increasing tax revenue from non-doms with the risk of discouraging foreign investment in the UK. It is imperative that any plans are finalised.”

TOPIC: The legal issue of hearing loss in the military in relation to the Barry case

COMMENT BY: Lyndsey Gordon-Webb, a specialist military hearing loss solicitor, Hodge Jones & Allen

“While we are delighted that Mr Barry has been successful, the reality is that thousands of other military personnel have already managed to secure settlements for millions of pounds without going to the High Court. The Ministry of Defence has been engaging with us to secure substantial settlements for former and current military personnel regularly in recent years despite the issues around limitation. Today’s ruling will however give our clients some solace that the MoD is accepting responsibility for the suffering they have endured.”

TOPIC: The suggestion that a growing number of landlords are imposing bans on working from home on their tenants.

COMMENT BY: Kate Palmer, Employment Services Director, Peninsula

 “For some businesses, the days of having a physical base are gone because all their employees work from home. For other businesses, remote working may be something that they will need to consider more about in the future.

“This is because one of the pledges that the new government has made is that they plan to make flexible working the default from day one for all workers, except where it is not reasonably feasible.

“Remote working usually equates to working from home. However, if an employee is prevented from working from home because their landlord has banned them from doing so, then this could cause issues. How an employer chooses to handle the situation will likely depend on the circumstances.

“Much will turn on the type of work that the individual carries out and whether alternatives could be considered. Could the employee reasonably work out of an alternative location like a shared space, coffee shop, or bar?

“This could be a non-starter for some roles, where concerns over confidentiality may mean that working where others outside of the organisation can hear and see them poses a risk to the business. There could also be concerns that working out of an environment where there are distractions is not conducive to maintaining productivity. But it will be for employers to fully consider based on the specific situation.

“One thing is for sure, this is a subject that’s guaranteed to continue generating conversation and headlines in the months to come, and one that employers cannot ignore.”

APPOINTMENT OF THE WEEK

WILLIAM FRY LLP

Stephen Keogh (above) has been announced as the next Managing Partner at Dublin firm William Fry LLP to take effect from November. Currently head of the firm’s Corporate / M&A Department, Keogh is a recognised specialist in the Irish M&A market, advising William Fry’s clients on two out of the four largest M&A deals in Ireland so far this year. Having trained at William Fry he was appointed a partner in 2005 and in the course of his career he has spent five years abroad as head of the firm’s London office.

 “I congratulate Stephen on his appointment and I very much look forward to working closely with him during his tenure as Managing Partner, said William Fry Chairman, Liam McCabe. “Stephen is taking up this position at a time when the firm is extremely well positioned to take advantage of the many opportunities afforded by a buoyant Irish economy. Stephen is renowned for his commercial approach and strong business acumen and I have every confidence that his leadership will greatly benefit our people as they continue to provide outstanding service to our domestic and international clients, across all sectors.”

William Fry has its headquarters in Grand Canal Square, Dublin and offices in Cork, London, New York and San Francisco.

We hope that you have found this edition of the LEGAL DIARY interesting (and even useful). If so, please circulate it to colleagues.

In any case, please continue sending your diary-type stories, legal comment and insights plus latest appointments to fennell.edward@yahoo.com

Meanwhile our thoughts move to Berlin on Sunday and our prayer is that Magician Southgate keeps on pulling goals out of unlikely looking nets.