Edward Fennell’s Legal Diary – Edition 56
Friday 7th May 2021 Edition 56
Diary news, commentary, insights, appointments and e-vents from the legal world
SHORT THOUGHT FOR THE WEEK – WHO NEEDS ELECTIONS?
If, by the time you read this, the results of the Scottish election are known and the SNP has fallen short of its hoped-for IndyRef2 majority then please stop reading now and pass on to the rest of the Legal Diary below. But if the result is still unknown or if the SNP is feeling empowered to demand a second referendum then feel free to remain.
Yesterday The Times ran a typically brilliant cartoon by Peter Brookes featuring divorcing couple B. Johnson and N. Sturgeon sharing a sofa but gesturing rudely at each other. Gloating over them was a troop of grinning lawyers and the legend, ‘The most expensive divorce in history!’
If, over the next five years, the Scots decide to opt out then for sure the DisUniting Kingdom will need all the lawyer power that London and Edinburgh can muster. But rather than thinking of it as a divorce let’s consider it as a de-merger. The less emotion and the more calm lawyering the better. Sadly, Westminster politicians made a botch of the Brexit negotiations because they were driven by simplistic slogans. If it comes to a Scexit then let’s hope some canny lawyers can make a better job of it.
The LegalDiarist
fennell.edward@yahoo.com
IN THIS WEEK’S EDITION
+ THE LEGAL DIARY
– The Good News is – Fewer PI Problems Than Expected
– The Bad News Is – Even Fewer Criminal Practitioners Than Needed
– Some Up, Some Down – The Crazy Legal Market
– Unwanted Guest List? {When visiting the UAE]
– Irwin Mitchell Brings a Breath of Fresh Air
+ LEGAL COMMENT OF THE WEEK – TO PRE-NUP OR NOT TO PRE-NUP
+ APPOINTMENTS OF THE WEEK
Twenty Essex, Harneys, BDB Pitmans
+E-VENTS
THE LEGAL DIARY OF THE WEEK
The Good News is – Fewer PI Problems Than Expected
Statistics come in raw but they can be cooked up in lots of different ways. Hence this week’s figures from Hazlewoods, Chartered Accountants and Business Advisers, on the number of law firms unable to meet their PI insurance bills have been presented in some quarters of the legal press as alarmingly high. But there is another interpretation which offers proof, maybe, that there is much greater resilience in the legal industry than expected
“Given the rising costs of PI Insurance in conjunction with the economic effects of Covid, there were fears that more firms would be unable to afford the mandatory PI insurance,” says Hazelwoods.
In reality, however, just 60 law firms have had to close through being unable to secure insurance. And although this is 50% more than last year it is far fewer than had been anticipated. “The legal profession overall has handled the pandemic and the rising cost of PI Insurance very well,” comments Andy Harris, Partner at Hazlewoods. “These setbacks could have prompted a bigger increase in closures but most firms have seen much better than expected cashflow over the last 12 months. This is thanks to the deferral of tax and VAT payments last year and the availability of cheap borrowings through the Bounce Back and CBILS loan schemes, which have allowed them to pay their PI premiums.”
What’s remarkable is that this is despite the fact that there have been no new entrants into the legal/PI insurance market offering seductive deals. The bounce back looks promising.
The Bad News Is – There Are Even Fewer Criminal Practitioners Than Needed
Consistent warnings to Government about the state of the criminal legal aid have been ignored to the point where, according to the Chartered Institute of Legal Executives, the work no longer offers a ‘sustainable career’. As a result the stability of the entire system is now under threat.
This is not new news. What is striking, however, is the scale of the exodus. CILEX has seen a steady decline in the number of its practitioners choosing criminal law as their long-term career path to the point that there are now 50% fewer members electing to study criminal law than in 2012. “This contrasts with those qualifying into areas such as conveyancing and civil litigation, where numbers of new entrants have continued to rise,” says the Institute.
Without trivialising the issue it must be said that the way criminal lawyers are characterised on TV is not helping. Recent transmissions of Line of Duty, for example, have depicted them as either sleepy and dishevelled or plain dodgy. For its part CILEX expresses concerns about the impact of political rhetoric around ‘lefty lawyers’ and ‘do-gooders’, which appears to discredit certain parts of the legal profession, further undermining the good will on which the system increasingly relies.
The result is, “A gradual departure of talented professionals from the defence sector as they become more and more attracted to the higher wages and greater job security offered by institutions such as the Crown Prosecution Service.”
For its own part CILEX has a gripe that its members face barriers to progression in criminal law, whether in defence ot prosecution. This includes rules that prevent CILEX practitioners from becoming Crown Prosecutors and the lack of recognition entrenched within the Criminal Litigation Accreditation Scheme, which fails to account for the level of training and competence that CILEX Advocates possess.
“These restrictions have the notable effect of limiting opportunities and career growth for CILEX Lawyers. The opportunities available to students and junior lawyers in pursuing a career in criminal legal aid are restricted from the outset and this drives some out of the sector and harms the pipeline of talent needed to meet the demands of the criminal justice system.”
Predictions of a collapse in the system have been long in the making. But maybe it will just be death through lack of conviction.
Some Up, Some Down – The Crazy Legal Market
To contextualise further the two previous stories the latest Gross Legal Product (GLP) Index figures from LexisNexis show that overall year-on-year, the legal market contracted by 4.3% during 2020. However, while Criminal Litigation declined by 7.1% Risk & Compliance work grew by 22% – with double digit growth in every quarter! In other words, it is a story of two completely different businesses operating within what is nominally the same profession.
Here are some other examples. Civil Litigation fell by 35% but Family Litigation in Q4 2020 grew by 9% (presumably showing the pent-up exasperation arising from lock-down). Meanwhile, Commercial levelled out at 11% growth and Employment was up at +6.2%. Competition saw a 10% contraction, due to decline in M&As and global trade.
Perhaps the figure of most significance was that Restructuring & Insolvency activity fell by 18%. Clearly this is an indication of time standing still during Covid. But surely there will be an explosion ahead – unless the Chancellor of the Exchequer really has pulled off a miracle.
“Anyone interested in practice development and planning should take a first look at the Index,“ said Barry Ó’Néill McAlinden, Barrister at Field Court Chambers.
The latest report can be downloaded from www.lexisnexis.co.uk/research-and-reports/gross-legal-product-index-q1-2021.html
Unwanted Guest List?
Courtesy of Carter-Ruck here’s a quartet of jolly guys you might want to avoid on your next trip to the fun-filled UAE.
– Counsellor Saqr Saif Al Naqbi, formerly the head of State Security, Public Prosecution in Abu Dhabi
– Major-General Mohammed Khalfan Al Rumaithi, formerly Commander in Chief of the Abu Dhabi police
– Major-General Ahmed Naser Ahmed Alrais Al Raisi, Inspector General in the Ministry of the Interior; and
– Ali Mohammed Hamad Hammad Al Shamsi, a senior intelligence official in the UAE.
British academic Matthew Hedges is claiming damages in the High Court against these four beauties on the grounds of assault, false imprisonment and the intentional infliction of psychiatric injury which occurred during the course of his detention in Abu Dhabi, UAE from 5 May 2018 to 26 November 2018.
“My fight for justice continues and my lawyers have filed a case in the civil courts in order to hold those responsible to account,” says Mr Hedges. “I hope it will ensure that what happened to me should never be allowed to happen again.”
An admirable but somewhat vain aspiration one suspects.
Irwin Mitchell Brings In a Breath of Fresh Air
The vulnerability of people with asthma to very serious illness has been brought into stark relief by Covid so the timing could not be better for Irwin Mitchell to form a new three-year partnership with Asthma UK and the British Lung Foundation (BLF).
The main aim of th partnership is to enhance support services available to people living with lung disease by helping with the running of a network of 150 volunteer-led support groups around the UK.
Already the firm has been supporting people affected by lung conditions either through workplace illness or illness-related injury. Now it will be supporting specific BLF activities including a Volunteer Conference for the group support leaders to celebrate their achievements, recognise their contributions and provide further training and networking opportunities.
“Sadly through our work, we often see the terrible consequences respiratory illnesses, such as silicosis and asthma, can have on people and their families,” said David Johnston-Keay, a specialist lawyer at Irwin Mitchell, “We’re proud to be partnering Asthma UK and the British Lung Foundation to raise awareness of the symptoms of respiratory illnesses and of the need for businesses to uphold health and safety laws.”
Jatinder Paul, also a specialist lawyer at Irwin Mitchell, added, “It’s vital that people with respiratory illness don’t feel they have to suffer in silence. Help and support, which can make a real difference to people’s lives, is available.”
Emphasising the importance of the role of support groups Sarah Woolnough, the Chief Executive of Asthma UK and the BLF, said, “For people with lung disease, the pandemic has been a particularly worrying and isolating time, with many forced to shield for months on end. Throughout this time, the BLF support groups and the volunteers who run them, have continued to be more than just a support network, but a lifeline.”
LEGAL COMMENT OF THE WEEK –
TO PRE-NUP OR NOT TO PRE-NUP (THAT IS WHEN YOU POP THE QUESTION)
Suddenly divorce is a la mode in the Billionaires Club. Jeff Bezos and his wife MacKenzie breaking up after 25 years was perhaps not so surprising. But for the saintly Gates’ duo it seems more of a jolt. Could it be the result of being crammed together with nowhere to go on a thousand acre ranch during lockdown? More importantly for the lawyers, however, is what happens next to all the money.
“It appears that Bill and Melinda Gates decided against having a prenup, which is incredibly unusual in such a massive-money case,” said David Thompson, Family Partner, at JMW Solicitors, “Very wisely, they already have a separation agreement in place and are asking a court in Seattle to approve it. However, the court in Seattle will not be bound to accept, and make legally-binding, the separation agreement, whereas a pre-nup would almost certainly have been rubber-stamped by the judge. More details are awaited as to why they took this very different route.
“Without any agreement, or pre-nup, in place, the Seattle court would very likely have divided all the assets 50/50, especially given the long marriage (nearly 30 years) and the fact that most of the assets were built up during the marriage and they have three children together.
“Bill and Melinda say they will continue to work together on their Foundation, but this would be a rare example of divorced couples continuing to have such close financial ties with each other in the next stage of their lives; certainly, many courts prefer a complete ‘clean-break’ so the parties can hit the reset button without their ex-spouse hovering over every decision they make about their futures.”
So there could be a lesson here for the thousands of frustrated would-be weds who will now start to pour into registry offices and sacred buildings and spaces around the country.
“The UK is facing a wedding boom over the next 18 months and a renewed interest in prenuptial agreements,” says Collyer Bristow.
Indeed, according to a report earlier this year by the trade body UK Weddings Taskforce it is estimated that some 824,000 weddings are planned for 2021 and 2022, following the postponement of 95% of weddings planned for 2020. [“I know!” says the LegalDiarist. “My neice’s wedding was postponed twice. It’s now happening later this month.”]
And, apparently, the spike in weddings is being matched by a renewed interest in prenuptial agreements. “A wedding is one of life’s great moments and bitterly disappointed couples had little choice but to delay the start of their new lives, “ observes Toby Yerburgh, Partner and Head of Family at Collyer Bristow. “But as those plans are revisited and wedding celebrations prepared, we are seeing a renewed interest in prenuptial agreements as part of financial planning for a life together.”
Whilst historically the preserve of the rich and famous, continues Yerburgh, prenups are now increasingly seen as sensible financial planning by couples wishing to protect pre-acquired assets, business interests, property, an inheritance and children from earlier relationships.
“Prenups, like a will, provide couples with security, clarity and certainty in the future for both parties,” adds Yerburgh.
Bet Bill is kicking himself.
APPOINTMENTS OF THE WEEK
TWENTY ESSEX
Professor Hi-Taek Shin is joining Twenty Essex as a full-time arbitrator. He will continue to reside and conduct his practice from Seoul, Korea. Until 2007, he was a senior partner at leading Korean law firm, Kim & Chang, specialising in cross-border transactions, including mergers and acquisitions, joint ventures and shareholders’ agreements and various commercial transactions. Since 2018, he has been serving as the Chairman of KCAB INTERNATIONAL, the Korean Commercial Arbitration Board’s international division.
“I look forward to joining my fellow arbitrators at Chambers and begin the next phase of my career endeavours to better serve for the effective and efficient resolution of international disputes,” says Prof. Shin.
BDB PITMANS
BDB Pitmans has appointed two new Legal Directors to its private client practice.
Lorna du Sautoy (above right) joins from Macfarlanes LLP, where she practiced as a Senior Solicitor in private client property for nearly eight years. Lorna has an extensive client base, providing practical and quality advice to prime and super prime London residential property and other luxury property assets. Her international clientele includes high net worth individuals and their companies, overseas as well as institutional investors, family offices, charities, banks, and trusts.
Sophie St. John(above left) rejoins the firm from RSM Legal LLP where she was a partner leading RSM’s private client legal services team. Before that she spent four years at a leading financial institution as in-house legal counsel supporting their global trust business. She has a wide range of experience within many aspects of private wealth, and regularly advises UK residents – as well as international, wealthy individuals, their families, and trustees on a wide range of UK legal and tax issues.
“The private wealth practice continues to be an important cornerstone of our business,” says Andrew Smith, Managing Partner at BDB Pitmans. “[Lorna and Sophie’s] global client base fits perfectly with our ambitious plans for growth as an outward-facing, internationally-minded, modern law firm.”
HARNEYS
Harneys, the largest law firm based in the British Virgin Islands, has appointed Peter Ferrer as Co-Head of Litigation, Insolvency and Restructuring where he will jointly lead the team alongside Partner Phillip Kite.
Ferrer has acted on behalf of institutions, companies, corporate entities and high net worth individuals. He is an experienced trial lawyer and has extensive experience of asset tracing and enforcement. He also heads the firm’s BVI-based Russian and CIS team and is consistently ranked by leading directories. Prior to joining Harneys BVI in 2016, he practised as a barrister. “As the firm broadens its international offering, I look forward to watching the success of this collaborative partnership.” said Chairman Peter Tarn.
E-VENTS
BINGHAM CENTRE FOR THE RULE OF LAW
WEBINAR 1: “Human Rights and the COVID-19 Pandemic” Wednesday, 12 May 2021 | 09:00 – 10.30 BST / 10.00 – 11.30 CEST
COVID-19 – and state responses to it – present a threat to human rights unparalleled in the contemporary era. At the same time, human rights offer a universal framework which guides decision-makers, ensures accountability for their actions and omissions, and renders visible the structural inequalities which drives the pandemic’s differential impact on certain communities. Looking forward, this panel discusses how human rights can be used to underpin a just and sustainable post-pandemic recovery. REGISTER
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WEBINAR 2: “Democracy and Disruption” Thursday, 13 May 2021 | 08:00 – 09.30 BST / 09.00 – 10.30 CEST
How has democracy been impacted by over a year of pandemic response and emergency? How have states ensured the democratic accountability of their actions in response to the global health emergency? What lessons can be learned for now, and for the future? This panel examines democratic practices, and highlights the best – and most concerning – developments. REGISTER
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WEBINAR 3: “Science, Law and Decision Making” Thursday, 13 May 2021 | 14:00 – 15.30 BST / 15.00 – 16.30 CEST
Bringing together experts representing states who have adopted divergent attitudes to the role of science in law and decision-making, as well as an examination of vaccination policy, equity and individual choice, this panel considers the complex policy choices, rationales and politics which interplay in decision-making during a pandemic. REGISTER
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