Edward Fennell’s LEGAL DIARY
Diary news, commentary, insights, appointments and arts from the legal world
July 29 2022 Editorial Contact: fennell.edward@yahoo.com
SHORT THOUGHT OF THE WEEK: NORTHERN IRELAND ‘Waiting for the Protocol’
Former Lord Chancellor Liz Truss looms out from the front cover of the new edition of Reports Legal. But the headline would take the smile off the face of any Prime Ministerial candidate. ‘Northern Ireland Protocol – Irish law firms slam ‘shameful, cynical’ UK government’, it says. Stating the obvious – although not to the current occupier of No 10 – Brexit has still NOT been done. Far from it. Instead there is just endless controversy. As editor Dominic Carman reports in the lead article, some of Ireland’s top law firms are enraged, with ‘not one client thinking the Protocol should be scrapped.’
Meanwhile Michael Jackson, managing partner of leading firm Matheson is reported as saying. “The vast majority of [our clients] believe that the issues that exist with the Protocol could be resolved within the existing frameworks, and with some flexibility on both sides.”
Sadly, flexibility (or what might be called ‘statesmanship’) has been in short supply in recent years. Ironically this comes in the week of the death of former Ulster Unionist leader David Trimble, a distinguished academic in the law faculty at Queen’s University, Belfast. It was flexibility on both sides which generated the Good Friday Agreement. It is vain stubbornness which is likely to kill it off.
The LegalDiarist
The current edition of Reports Legal can be found at
https://reportslegal.com/wp-content/uploads/2022/07/RL-NIreland-Report-Jul-2022_v3.0_HI-RES.pdf
In this Week’s Edition
+ LEGAL DIARY OF THE WEEK
– City’s Insatiable Hunger for Lawyers
– In-House Lawyers Badly Missing Out Financially Despite Boom in Demand
– Unhappy Senior Solicitors?
– Boodle Hatfield’s New Guide to Divorce Risk for Family Businesses
+ CONTRIBUTED ARTICLES OF THE WEEK
- Lending a Hand on Domestic Abuse Legislation by Michael O’Donoghue
- Tacking Rugby’s Brain Damage Crisis by Jonathan Compton
- Divorce Down on the Farm by Adam Maguire
+ LEGAL COMMENT OF THE WEEK on Menopause and the Workplace, Government Employment Rights Guidance
+ APPOINTMENTS OF THE WEEK at Lotus Cars and CILEX
+ E-VENTS at Gresham College
LEGAL DIARY OF THE WEEK
City’s Insatiable Hunger for Lawyers in ‘The biggest war for talent seen in over a decade’
‘Volatile and unpredictable’ scarcely seems to cover the current state of economy and maybe that is why, according to latest figures from recruitment consultancy Robert Walters 85% of City law firms are planning to increase staff numbers for the remainder of 2022.
“Legal vacancies in London for the first half of 2022 (January – June) have already surpassed what we saw for the same period last year (+4%), despite a slight -12% dip in Q2 bought about by the Russia-Ukraine conflict and subsequent rising inflation,” says the consultancy.
What is particularly interesting is that tax specialists are the people in most demand. Given that, so far at least, tax has been the hot issue in the Conservative leadership race it is understandable that law firms want to double down on having enough people in place to deal with whatever Truss/Sunak will throw at them.
“Whilst downsizing at volume within law firms is rare – the legal world is prone to boom and bust in regard to hiring,” says Richard Harris, Chief Legal Officer at Robert Walters Group. “What we encounter during a downturn is a cut back in new trainees, but when demand increases this means there are simply less available qualified lawyers at the junior end of the profession, putting pressure on the system as a whole.
“Add in truly incredible wage inflation, greater specialism making some types of lawyer scarce, the increasing scale of in-house teams – partly in response to the increasing rates of law firms which funds the wage inflation – and we have a ticking timebomb of pressure.”
All this is creating what Robert Walters calls, ‘the biggest war for talent seen in over a decade’.
But In-House Lawyers Badly Missing Out Financially Despite Boom in Demand
Despite developments elsewhere in the market (as above) remuneration for In-House GCs is considerably trailing behind the global average, with lower base rates and slower growth in the UK than in the US according to the latest In-House Compensation survey by Major Lindsey & Africa.
So notwithstanding the increasing scale of in-house legal teams (as mentioned in the Robert Walters report)CLOs and GCs in the UK are typically earning base salaries around $60,000 below the global average. Moreover there is an $81,610 gap between base rate salaries for male and female GCs in the UK.
“The salaries of UK in-house lawyers are still playing catch up with their global counterparts, particularly in the US,” said Naveen Tuli, Managing Partner, Major, Lindsey & Africa. “While increasingly in the US, General Counsel and Chief Legal Officers have a seat at the boardroom, and even report directly to the CEO, here in the UK in-house lawyers are generally not as close to heart of the corporate web, which directly and negatively impacts pay structure. In-house lawyers in the UK market are taking home significantly less pay than their US counterparts.”
Specifically on the issue of the gender pay gap Tanja Albers, Partner, Major, Lindsey & Africa, said, “Our data reveals a glaring gender pay gap for in-house lawyers, which will only continue to propagate if we do not foster a culture of transparency in the UK. We must break down the stigma surrounding pay, particularly in negotiations on bonuses which are more likely to help close the gap on variable compensation (for instance in 2021 the gender gap for UK GCs/CLOs’ bonuses was a difference of $179,825).
“Instead of simply asking a candidate what their current salary is, expectations of an uplift should be negotiated – valuing the position instead of the individual may mean more than the standard 10-15% uplift for moving role. In breaking down these taboos, women will have a greater chance of standing shoulder to shoulder with their male colleagues. As the talent war rages on, hiring more women is no longer just a diversity initiative if they are not remunerated equitably.”
Unhappy Senior Solicitors?
Meanwhile to add to the complexity of what is happening Peter Allinson, CEO of Davitt Jones Bould, suggests that 2023 will be a busy one for lateral hires as the IPO market recovers and activity starts to increase. However, he adds, with the relentless increase in newly qualified salaries, senior solicitors (that is to Associates and Senior Associates with 5-15 years PQE) will continue feeling ‘ a great deal of unhappiness as their relative contribution is a lot greater, compared to the relative salary they are paid.’
In short, the gap is diminishing between what might be seen as the overpaid (?) newly-qualified and the people above them who have been toiling away for many years. Meanwhile the gap between these non-partners and partners still remains very wide (indeed maybe wider than ever).
“These factors, along with new options available to lawyers, such as remote working and more innovative models of practicing law, will continue to cause trouble to the established top 30 firms as they try to attract senior hires, unlike some of their more innovative competitors,” says Allinson.
Boodle Hatfield’s New Guide to Divorce Risk for Family Businesses
Continuing the celebrations around its 300th anniversaryBoodle Hatfield has just published a comprehensive legal guide to help family businesses manage the fallout of divorce.
“The topics covered in the guide are prevalent for many of our clients at Boodle Hatfield so it’s been a really satisfying process to consolidate the broad principles that apply to protecting family businesses, with the support of colleagues from our private client, employment and corporate teams,” said Katie O’Callaghan, the Partner responsible for the publication. “My aim was to create a product that gets to the heart of the issues faced by so many families and create something that addresses the sensitivity and careful approach needed. The publication has been a long time coming so the firm’s 300 year anniversary was the prompt I needed to get it over the finish line!”
A Legacy Intact: safeguarding your family business in the event of divorce, is now being distributed and is also available online. As Katie O’Callaghan points out family businesses are an integral element of the UK economy, but they face challenges other companies do not. Hence when a shareholder’s marriage breaks down, family business’ financial and commercial wellbeing can be put at risk. “Many owners are unaware of the full powers of the English Family Court when it comes to making financial orders on a divorce, and the associated jeopardy to the business,” says O’Callaghan . “This practical new publication from Boodle Hatfield details the risks, and how to mitigate them.
The guide follows a recent event by the Family Law team, which saw a thought-provoking discussion on the limitations of law on marriage in the 21st Century.
(For more on a related topic see below DIVORCE DOWN ON THE FARM by Adam Maguire)
CONTRIBUTED ARTICLES OF THE WEEK
LENDING A HAND TO DOMESTIC ABUSE LEGISLATION
The Domestic Abuse Bill gained Royal Assent and entered into law – but with the assistance of Hogan Lovells, explains senior associate at the firm Michael O’Donoghue
A pro bono team from Hogan Lovells worked closely with the charity Hestia and Gordon Nardell QC on the progression of the Bill and since then we have continued to advocate for positive change.
The Bill entering into law did not tackle all of our points of concern, but there were some significant successes, including for the first time ever, children falling under the definition of victims of domestic abuse. Hestia, which delivers services across London and the surrounding regions to provide adults and children a ‘life beyond crisis’,has long been aware of the devastating impact of domestic abuse on children and its consequences in later life, and has been demanding recognition of the many children across the UK living with domestic abuse.
The definition was a fundamentally important acknowledgement that children do not just witness abuse, they experience it. The Bill did not, however, address several of the issues that we believed to be crucial in the fight to support victims of domestic abuse and has some pressing omissions. As further proposals to assist child victims of domestic abuse, we firmly believed that children escaping domestic abuse should not have their vital access to healthcare services delayed by moving to a refuge or out of the area in which they live.
That was why the team advocated that the guidance should include protection of the places of children fleeing domestic abuse on NHS waiting lists. So we are now pleased to welcome the publication of the Domestic Abuse Act 2021 statutory guidance, which will aid in the definition of domestic abuse as part of the Act and includes the NHS provision that we advocated for, namely: “In line with the NHS key principle that care should be based on clinical priority, health services should ensure that any and all victims of domestic abuse and their children are not unduly disadvantaged in accessing physical and mental health services when they are forced to move to new accommodation in a different area.”
We have been delighted to work with Hestia to ensure this advance has been achieved.
TACKLING RUGBY’S BRAIN DAMAGE CRISIS
by Jonathan Compton, partner, DMH Stallard
The question is being asked as to whether a group of rugby players drawn from various clubs and unions can successfully make a claim against either their union or their employers or both. In my view, the answer is undoubtedly, yes.
The area of English Law we are dealing with is negligence. This is a ‘tort’ or a ‘wrong’ which allows those injured to bring claims where the tort is made out. In a ‘new’ situation, such as this, the courts impose the following test.
1. Is it fair to impose the duty?
2. Was the damage reasonably foreseeable?
3. Is there a sufficient degree of closeness/ proximity in the relationship between the parties?
The courts like to examine the cases that have been decided. They like then to apply the reasoning of analogy: ‘Is this new case similar to that old case?’.
The closest we can get to the rugby field and the structure of that game is arguably, boxing. Many will recall the case of Watson v British Board of Boxing Control.
Michael Watson suffered severe injuries in his fight against Chris Eubank.
The case focused on the medical facilities available at ringside. The argument was there was a duty to have such facilities, the failure to provide them was a breach of this duty and Mr Watson’s injury was considerably worsened by the breach.
The court found that the BBBC had provided minimum mandatory rules relating to medical care. There was sufficient proximity – BBBC licensing the fight. The injury was manifestly foreseeable So the court held there was a duty of care. The court then went on to hold that the medical requirements of the BBBC fell short of what was sufficient.
In the current case of rugby injuries it is undoubtedly the case is that World Rugby, the world governing body, brought in rules relating to concussion since May 2019. The laws of rugby were changed to bring in head injury protocols. On an England level, the RFU has followed suit with brain injury standards and post injury monitoring.
For my part, I think World Rugby and the RFU has assumed responsibility, in much the same way as had the BBBC in Watson.
But was the damage reasonably foreseeable?
I think this situation can be dealt with swiftly. Two men running into each other at 10 miles an hour have an impact force of over half a ton. It seems very foreseeable that heads and necks will suffer injury. From there it is a short drive to obtain medical evidence that this type of injury will cause damage.
What plays in my mind, though, is this: we now know that repeated blows to the head will cause damage to the brain. But the evidence as to WHEN we knew this from a medical research point of view is a matter for the court to determine. The question of breach can only be decided by what was known/ knowable at the time to the person owing the duty of care on a general level.
So the biggest test the claimants may face is whether their injury was sustained on the pitch at a time when the defendant knew or ought to have known the likelihood of the injury.
DIVORCE DOWN ON THE FARM
by Adam Maguire, partner in the family team at Clarke Willmott
Divorce where farms are concerned often involve particular complexities less likely to arise in non-farming cases. While the law on divorce applies in exactly the same way to cases with farms as to those without, the source and nature of farming assets, as well as wider family involvement, can present a unique set of difficulties making it more complicated to structure a financial settlement in such a way as to minimise the impact on the farm.
Many farming families are capital rich but income poor with liquidity issues as the farm assets and land are intrinsically linked to the successful running of the farming business. It is often not as simple as obtaining an order that an asset be transferred to the other party or sold without this having a significant knock-on effect.
Multiple family members can be involved in the running of the farm, risking them being drawn into the divorce proceedings if there are disputes about beneficial ownership. It is easy to overlook the importance of relationship planning, to take account of the risk of relationship breakdown and the impact this might have on the farm and the wider family.
While inherited assets are generally treated as “non-matrimonial” property by the Family Court – in contrast to “matrimonial” property which are those assets built up during the marriage – in that non-matrimonial assets are not subject to the “sharing principle” (where the starting point is equality), there are circumstances in which the court can still invade non-matrimonial assets.
For example, the former matrimonial home may form part of the farm. The matrimonial home is usually considered as the most matrimonial of assets in nature regardless of whose name it is in. An inability to raise liquidity to offset the other party’s sharing claim to this property may require creative solutions.
Further, once the court has considered to which assets the sharing principle ought to apply, the exercise does not end there with the court also required to consider the “needs principle”.
Ultimately, the best way to protect farming assets is to consider the use of pre or post nuptial agreements. While the Family Court will not be bound by a nuptial agreement simple because one exists such an agreement, if drafted properly and with both parties receiving legal advice, can be highly persuasive to the court.
LEGAL COMMENT OF THE WEEK
TOPIC: The Women and Equalities Committee report on Menopause and the Workplace with recommendations for Government and others.
COMMENT BY: Louise Skinner, employment partner at Morgan Lewis
The Women & Equalities Committee clearly feels strongly that reform and greater awareness is needed, by way of a spotlight from government, support from employers, and legal reform. The Committee recommends that the Government should produce model menopause policies to assist employers, covering as a minimum advice on requesting reasonable adjustments and flexible working, and provisions for education, training and support within the workplace. It further suggests that the Government should pilot a specific “menopause leave” policy, as well as accelerating the introduction of legislation to make requesting flexible working a day-one right. Evidence presented to the Committee suggests that encouraging transparency and providing better support to people experiencing menopause can significantly improve the experience of workers and make them more productive, and more likely to remain in work.
“In terms of legal reform, a key recommendation includes enacting Section 14 of the Equality Act 2010 with immediate effect to allow combined discrimination claims based on more than one protected characteristic to be brought forward, which would provide another avenue and easier access to justice for those experiencing discrimination on the grounds of menopause. The Committee also recommends that a new consultation should be launched with respect to making menopause a protected characteristic in its own right, which would provide more direct protection. If taken forward these could have significant and far-reaching impacts for employers in terms of introducing and adapting policies and procedures, which ultimately would likely improve employee wellbeing, retention and as a result, company performance. It remains to be seen however whether enacting Section 14 is deemed to be mitigation enough for the concerns around adequate protections for those experiencing discrimination.
TOPIC: Publication by the Government of its Employment status and employment rights guidance,
COMMENT BY: Susan Ball, UK employment taxes partner at RSM and current president of the Chartered Institute of Taxation
While the new guidance includes case studies and checklists, it does not make it any easier to navigate the legal and tax positions of individuals, particularly where businesses think ‘worker status’ applies for employment law, as this category does not exist for tax purposes.
It’s disappointing that after many years of discussion the government has decided now is not the right time to bring forward proposals for alignment between the two frameworks. Instead, it states it ‘will work closely with stakeholders to explore longer-term options to improve the employment status system for tax to ensure it is as clear as possible and usable for all parties.’ We must hope this does mean active discussion now and not further delays.
APPOINTMENTS OF THE WEEK
CILEX
Matthew Huggett has become the 59th President of CILEX (the Chartered Institute of Legal Executives) following its AGM earlier this month.
Having began his legal career in his 30s he worked for manufacturers’ organisation, EEF (now known as Make UK) for over 20 years before joining Carbon Law Partners in 2018. He advocates for clients in employment tribunals and advises employers on discrimination, dismissal, restructuring, TUPE, absence and performance management, equal pay, collective and trade union matters and contractual disputes.He is a Chartered Fellow of the Chartered Institute of Personnel and Development, a member of the Employment Lawyers Association and the Industrial Law Society.
“The legal profession would have been entirely closed to me if CILEX had not existed,” said Huggett. “For many, it simply isn’t possible to fund a legal qualification when you have a mortgage to pay and children to support. It certainly wasn’t an option for many of our members and certainly wasn’t for me, to leave my role to undertake my studies.
“This is one of the reasons that CILEX has such an important place. It provides access to the legal profession to a wider, more diverse group of aspiring lawyers and is not dependent on being able to afford to go to university. It is not dependent on you burdening yourself with significant levels of debt with no guarantee of legal work at the end of it. It is not dependent on you securing a training contract.
“Talented individuals from all walks of life have access to the legal profession through CILEX. We are the only branch of the legal profession that can genuinely say this.”
LOTUS CARS
LOTUS CARS has appointed Pui-Yee Tang as its new Director of Legal & Compliance. Formerly a Director at Phillips Lewis Smith where she focused on complex commercial disputes Pui-Yee has been the Head of Legal & Compliance at Lotus since March last year. “This promotion to Director is recognition of her performance as the business transforms from a UK sports car company to a truly global performance car business and brand,” says the company.
In addition to being responsible for all legal and compliance affairs at Lotus, Pui-Yee leads the Diversity, Equity and Inclusion (DEI) initiatives across the company. She is also the Data Protection Officer at Lotus and an existing member of the Executive management team.
“Leading the Legal & Compliance team at Lotus is an exciting challenge where every day is different,” said Pui-Yee. “We are going through a hugely ambitious transition, which means navigating through a wide variety of complex commercial procedures.”
“I’m also proud to lead DEI at Lotus. We are further developing our framework to educate ourselves about how to correct inequities and lead inclusively. I am personally committed to support the company’s roadmap to promote equality.”
Pui-Yee was admitted to the Bar (Honourable Society of Lincoln’s Inn) as a barrister in 2010 and she subsequently cross-qualified as a solicitor.
E- VENTS
GRESHAM COLLEGE
Lecture, Central London, Monday, 24 Oct 2022 – 13:00
Should We Permit Voluntary Assisted Dying?
Professor Imogen Goold
Visiting Professor of Medical Law
Imogen Goold is Professor of Medical Law, Faculty of Law at University of Oxford and Fellow of St Anne’s College.
The English courts have wrestled with challenges to the restrictions on euthanasia and assisted suicide for years, while the government has resisted calls to liberalise the law. Meanwhile, terminally ill people continue to travel overseas to clinics such as Dignitas, to end their lives. Assisted dying raises fundamental questions about respect for individual autonomy, protection of the vulnerable and the role the State should play.
This lecture will explain the law and explore arguments for and against liberalisation.
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