Edward Fennell’s LEGAL DIARY

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

November 11^th2022

Editorial contact: fennell.edward@yahoo.com

SHORT THOUGHT FOR THE WEEK: THE SHORTER THE BETTER?

The career of Gavin Williamson is a tale of our times. You’re in, you’re out and then you in again and then…Likewise with that ‘red wall’ collapse in the USA’s elections for Congress this week. What everyone believed was a dead cert turned out not to be. Meanwhile the unthinkable is happening at Twitter and Facebook with down-turns and redundancy slashing through what seemed to be the rock solid businesses of the future.

Add in Elon Musk’s declaration that he is putting an end to Twitter’s “work from home forever” policy and there is sizeable jolt to any sense of constancy. Meanwhile, in the legal world, this week we have seen that Cooley has, apparently, ‘let go’ even some high flying associates ‘due to a lack of work in practices such as venture capital and capital markets’. And when you then consider (as reported below) there has been a 14% drop in M&A advisory instructions it is clear that nothing lasts forever. Even being sacked by Twitter. And, indeed, that nothing lasts for very long at all – including, one hopes, the bad times.

The LegalDiarist

In this Week’s edition

+ A LEGAL DIARY SPECIAL REPORT: CRIMINAL LEGAL AID LAWYERS STAND TOGETHER

+ LEGAL DIARY OF THE WEEK

– The Drip, Drop Drop of Profitability

– You click, they score

– New Networking Initiative for Aspiring Women Lawyers

– Property Litigation Association Gets a New Chair

+ LEGAL COMMENT OF THE WEEK on Parliamentary bullying, Meta redundancies, the Musk effect and the ‘Single Director’ Company Model

+ CONTRIBUTED ARTICLES OF THE WEEK

SHOULD A REVISED ARBITRATION ACT SEEK TO IMPOSE A DUTY OF CONFIDENCE? asks Zoe O’Sullivan KC

PARALEGALS ARE PART OF FOOTBALL’S EXTENDED TEAM

argues Amanda Hamilton

+ APPOINTMENTS OF THE WEEK at Excello and Kingsley Napley

A LEGAL DIARY ‘SPECIAL REPORT’

CRIMINAL LEGAL AID LAWYERS STAND TOGETHER

Earlier this week 150 criminal Legal Aid contract holders – including names such as Tuckers, Reed Solicitors and Johnson Partnership – joined in an unprecedented display of unity to express their concern to government about the crisis in the provision of criminal legal aid services and to set out a road-map for the future. “While the tone of the meeting was, of course, subdued given the context of crisis within which it was held, to finally achieve this level of unity between firms of all sizes and from across the country was very positive,” said Jan Matthews, senior partner at Reeds Solicitors . “ This is the first step towards ending years of the Government’s use of ‘divide and conquer’ tactics which has allowed them to underfund the provision of criminal legal aid to the point of collapse.”

The market for the provision of criminal legal aid work is currently in free-fall, they said. The number of firms with criminal legal aid contracts is at an historic low – likewise the number of duty solicitors on duty schemes across the country. The increasing gap between capacity and workload is forcing firms to triage cases and ration services. And, as has been extensively reported, the current fee levels are insufficient to allow firms to offer the required level of remuneration to attract new trainees into the market. Or indeed to prevent duty solicitors from moving into other areas of law, or to better-funded organisations that can offer better remuneration packages, such as the CPS.  “Without new solicitors entering criminal law, then market failure, especially in the most vulnerable areas of the country, is simply a matter of time.”

The meeting then agreed to:

 + call on the Lord Chancellor, in the upcoming response in relation to the Criminal Legal Aid Independent Review (CLAIR), to implement the minimum recommendations made by Sir Chris Bellamy (i.e a 15% increase on all criminal legal aid fees, including LGFS and Prison Law)

+ indicate that, should the Government fail to implement the minimum recommendation of CLAIR in its upcoming response (and within the context of the Law Society’s advice to contract holders – see below), each firm will have no choice but to cease to undertake work that is financially unsustainable for their practice, potentially leaving vulnerable defendants without the benefit of legal representation

+ create a formal structure (a Criminal Legal Aid Contractors Association) to provide a unified voice for providers. The primary aim of the new organisation will be to engage with the MoJ and LAA on behalf of its members in relation to the terms of future Criminal Legal Aid Contracts.

NOTE: the Law Society has advised its members not to undertake work that is financially unviable pointing out that regulated firms and solicitors have a duty to run their practices in a financially sustainable manner to uphold the SRA Principles.

Meanwhile, from the perspective of the Bar, experienced criminal barrister Rose Burns of 12CP (Southampton), comments that the resolution of the criminal legal aid solicitors was welcome.

“Many of the firms for which members of my Chambers do criminal work report that they are seriously considering whether or not to renew their legal aid franchises, because they are unviable,” she explained. “What is said about the lack of access in many parts of the country to solicitors in police stations (to cover interviews and remands), in courts, and more generally, demonstrates that people no longer have access to legal representation at a basic level. Then when you take into account the lack of barristers to cover both prosecution and defence work, the lack of Judges to try cases, the lack of resources in court buildings, policing, prisons, agencies like the CPS, Probation Service, etc., it is clear that the Criminal Justice System will cease to function efficiently very soon. If, that is, it hasn’t already done so. The inevitable consequence of this is the breakdown of the rule of law. Yet Dominic Raab and his minions in the MoJ seem oblivious to it.”

LEGAL DIARY OF THE WEEK

The Drip, Drop Drop of Profitability

Following on from last week’s2022 Legal Department Operations Indexwhich showed that 85% of corporates worldwide plan reductions in their spending on external law firms it is no great surprise that this week the Q3 2022 Thomson Reuters Law Firm Financial Index (LFFI) indicates global law firm profitability had dropped for the fourth consecutive quarter. There has been notably, a 3.7% fall in M&A advisory instructions since 2021.One of the few practice areas that actually saw demand grow was labour and employment (0.3%) which itself suggests increasing industrial relations clashes on the horizon.

At the same time, the report comments, firms were hit hard by rising expenses. ‘Direct expenses grew by 10.9%, driven by firms competing for talent, while overhead expenses rose even faster at 12.8%, due in part to the ‘return to the office’.

Ah yes, that ‘return to the office’.Could WFH become a redundant phrase by the time of the next election -US or UK?

“Law firms are finding themselves squeezed by both slowing demand and rising expenses,” said Mike Abbott, head of the Thomson Reuters Institute. “While firm profits have slid recently, they still remain well above pre-pandemic levels. The lessons from the Great Recession are still on the minds of law firm leaders, and they recognize the importance of taking a long-term view on how to best position their firms for ongoing success. But doing so may present some near-term challenges.” To put it mildly.

You click, they score

As if there were not enough moral debates and practical problems overhanging the imminent football World Cup there are now warnings about the risks posed by cyber gangs and government-backed hackers during the tournament. “The World Cup in Qatar is likely to be heavily targeted by cyber gangs and nation-state affiliated hackers,” says Douglas DePeppe  of eosedge Legal, a US law firm offering  cyber risk and cyberlaw solutions .

“Fans should be wary about social media links offering free streaming of matches,” warns DePeppe. “The Sport Information Sharing and Analysis Organisation (Sports- ISAO) uncovered massive click-fraud schemes during past events which began with lures offering free streaming. After clicking on the link, the user’s device would become compromised and exploited to become part of a large botnet which engaged in advertising fraud. Once compromised, the device could be exploited further, such as credential harvesting leading to identity theft and other thefts against the device owner.”

This creates real threats for all kinds of individuals, busineses and law firms. “For the global business community, the risks include workers wanting to watch from work using streaming services which may not be trustworthy, clicking on email and web page banner links, and inattentive smartphone clicking, especially on social media.” Sounds like a Yellow Card matter.

New Networking Initiative for Aspiring Women Lawyers

Launching at the end of this month is what is claimed to be the UK’s first e-mentoring programme for female lawyers and professionals designed to help women ‘supercharge their rain-making skills and fast-track their trajectory to senior leadership.’

‘Networking Nuance’ has been set up by Kate McMahon and Tamlyn Edmonds to assist women to succeed in networking and business development. And as founders and partners of private prosecution law firm Edmonds Marshall McMahon (EMM) they presumably know something about this.

Starting from the fact that women constitute only 35% of the partners and just 25% of the equity partners in UK law firms, McMahon and Edmonds suggest that studies show that gender-balanced leadership creates businesses which are more financially successful¹, diverse, collaborative and with higher staff retention.

Their new mentoring programme is designed to be ‘flexible and affordable’ and will offer a nine-week pre-recorded course featuring weekly videos of ‘expert networkers providing top tips, weekly summaries and tasks.’ Aimed particularly at female associates, Senior Associates and partners who feel they ‘need a boost’ and an interactive forum will also be part of the deal. .

“We have over 10 years of managing both genders and noticed that women tend to prioritise their legal work at the expense of building their networks,” said Kate McMahon. “We consider that the lack of business development training and effective advice is one of the factors that explains the UK’s relatively low numbers of female partners, and extremely low numbers of female equity partners.

Networking Nuance’s website will go live on 17 November (where there will be an option to register for the course which begins on the 28 November 2022). A launch party will take place on Wednesday 23 November at Curzon cinema in Hoxton where an episode of one of the nine videos will be premiering.

For more, contact Kate McMahon katemcmahon@networkingnuance.com

Property Litigation Association Gets a New Chair

Following the departure of Mathew Ditchburn of Hogan Lovells as Chair of the Property Litigation Association (PLA) the role will now be filled by Dellah Gilbert, Head of Real Estate Disputes at City firm, Maples Teesdale.

By coincidence (maybe) Gilbert also began her career at Hogan Lovells where she was as a Solicitor and then Of Counsel to the firm until 2015. She then switched to become a Partner at Maples Teesdale which is reckoned to be one of the leading specialist commercial real estate law firms in the UK  She is also currently co-Head of Diversity and Inclusion at the firm.

“I’m delighted to take up the baton as Chair of one of the most influential organisations in the field of property law,” said Gilbert. “As market and economic conditions become increasingly challenging, I believe we’ll see property litigators stepping up and taking an ever more prominent position in supporting the industry during a difficult period. The PLA provides a fantastic forum for litigators to come together and share their knowledge and experiences – which is particularly beneficial during times of uncertainty and change. The PLA has made some impressive achievements under Mathew Ditchburn’s leadership and I look forward to continuing to drive the organisation’s important work forward.”

Mark Reading, Partner in Real Estate Dispute Resolution at Mishcon de Reya, will now serve as the organisation’s new Vice Chair.

LEGAL COMMENT OF THE WEEK

TOPIC: Redundancies at Meta

COMMENT BY: Jo Keddie, Senior Partner and Head of Employment at Winckworth Sherwood

“Big tech has been severely impacted by overoptimistic growth expectations in recent months. Today’s announcement from Meta – arguably the leading player in the social media arena – appears to be the latest casualty, following on from Twitter, Stripe and Lyft who have all recently announced staffing cuts due to underperformance and lacklustre third quarters.

“It will be, of course, interesting to see how Meta approaches its proposed redundancies in light of the rushed and very poorly handled removals exercise undertaken by Twitter in the last week across its global workforce, which has attracted much adverse media coverage regarding the treatment of its staff. 

“Hopefully Meta will take heed of the negative commentary surrounding Twitter’s actions, and will ensure that any proposed redundancies in its UK entities will be fully compliant with UK employment laws, for example relating to collective consultation obligations and, equally importantly, be done with proper advance notice, a clearly defined process,  fairly and will all due sensitivity and care for those affected and likely to be made redundant. Any failure to do so not exposes Meta to legal action from the employees removed but, as has been seen in the last week, can cause significant damage to the brand and its various business lines and customer goodwill.”

COMMENT BY: Michael McCartney, Employment Partner at Fladgate

“Meta’s announcement that it plans to make significant job cuts in response to the current macro-economic environment comes very soon after similar cuts were imposed by Elon Musk following his purchase of Twitter, demonstrating that there is a real impact on advertising revenues in the social media sphere. It would surprising if either company adopted the approach P&O Ferries deployed recently when it sacked 800 seafarer without prior warning. This is because UK employment law requires an employer to consult with elected representatives (or Trade Unions if there are any recognised) for a minimum period of 30 days, where it envisages 20 or more redundancies and, for at least 45 days, if that number exceeds 100 redundancies. The company is also required to send a notice called an HR1 form to the UK government and if it fails to do this, its directors run the risk of criminal liabilities.

Social media firms (even more so than a travel company) are bound to be conscious of the negative publicity for any failure to comply with employment laws even if the financial penalty (which amounts to 13 weeks’ pay per employee) alone is not enough of a disincentive.” 

TOPIC: Bullying at work (in light of the Gavin Williamson claims)

COMMENT BY: Adrian Henderson, an Associate in the Employment Law team at RWK Goodman

“All employment contacts are subject to an implied term of trust and confidence. If serious bullying is perpetrated by one employee against another, the victim may well be able to claim that this trust and confidence has been breached, with the employer being vicariously liable for the actions of the perpetrator. The bullying victim would be entitled to resign immediately and claim constructive dismissal against the employer – effectively stating that their treatment had become so intolerable that they had no choice but to leave.

“Constructive dismissal has a fairly high bar to clear in terms of the seriousness of the treatment meted out, but it would satisfy this if the bullying is serious enough – and threats of public humiliation and statements such as “jump out of the window” or “slit your throat” would be highly likely to reach this threshold. Indeed, if these comments were to be shouted at someone in public, it may well constitute a public order offence. It is also worth noting that the matter can be further complicated – and made more serious – should the person receiving such comments allege that they are discriminatory by reference to a protected characteristic”.

“The term of trust and confidence cuts both ways and it is perfectly possible for the employee to breach it just as much as it is for the employer. In this scenario, the bullying employee could expect a charge of gross misconduct to be brought against them and if found, summary dismissal would be the likely result.”

TOPIC: The Musk effect

COMMENT BY: Mike Tremeer, Employment Partner at Fladgate

“Mr Musk has certainly made an impression on Twitter in his first three weeks – making up to half of the employees redundant (including most of the senior management team as far as I can tell) and telling those that remain that they can no longer work from home (save in exceptional cases). I would expect either of those actions separately to have a materially detrimental effect on staff morale, loyalty and commitment – especially given the recent commentary regarding “quiet quitting” or work to rule. Together they are likely to have an exponential effect on the Twitter workforce. Mr Musk has even mentioned bankruptcy as a possibility or explanation for his actions which I am sure will not have provided any reassurance to employees at all.

It seems inevitable to me that those employees still at Twitter will therefore be considering options elsewhere and so there is the prospect of a tangible loss of key talent. And potentially a real difficulty in attracting new talent given the events of recent weeks and the new boss’ apparent disregard for Twitter employees.”

TOPIC: Clarifying Single Director Company Model Articles 

 COMMENT BY: Raksha Aggarwal, corporate solicitor at Clarke Willmott 

“ Articles of association are the internal rules which set out the basic management and administrative structure of a company. A recent High Court decision has clarified some uncertainty around Model Articles being suitable for sole director companies, which was prompted by a decision earlier this year in the case of Fore Fitness Investments Holdings Ltd. Fore Fitness suggested that any company incorporated with unmodified Model Articles could not operate with one director.  

 Meanwhile In the recent case of Re Active Wear Limited, the court ruled that an out-of-court administrationiappointment, instigated by a sole director of a company with unmodified model articles, had been able to operate from incorporation with only one director. 

  Although the decision in Re Active Wear will be welcomed by sole directors with unmodified Model Articles, the position in Fore Fitness may still apply to a company with Model Articles that have been amended to include a specific quorum requirement. 

  Going forward, if a company intends to operate with only one director, the articles should be drafted in a way that makes this clear. Sole directors who previously acted alongside co-directors may need to review their company articles of association.” 

CONTRIBUTED ARTICLES OF THE WEEK

SHOULD A REVISED ARBITRATION ACT SEEK TO IMPOSE A DUTY OF CONFIDENCE?

asks Zoe O’Sullivan KC

Most arbitration users would say that confidentiality is a key characteristic of international arbitration. In a 2018 survey by Queen Mary London University, respondents identified confidentiality as the fifth most important characteristic. They might be surprised to learn that the Arbitration Act 1996 contains no reference to a duty of confidentiality. Back in 1996, its drafters considered it too difficult to draft a statutory code of confidentiality. Now, in its recent consultation on its eagerly awaited report on the 1996 Act, the Law Commission has provisionally expressed the same view.

No-one doubts that parties can elect to keep their arbitration private and confidential – many will do so expressly by adopting institutional rules which impose duties of confidentiality (e.g. LCIA and HKIAC). Even with no express term, English law takes the view that confidentiality is a term implied by law, or possibly the subject of an equitable duty. But confidentiality can never be absolute – there will be circumstances in which the interests of a party or the public may justify disclosure. It is the public’s interest in knowing what governments are doing with their taxes which means that investor-state arbitrations start from a default position of transparency. A party may need to reveal the award to enforce it, or have reporting obligations where the award has a material effect on its financial position. Third parties affected by the award such as guarantors or parent companies have a legitimate interest in knowing its terms.

The problem is that the exceptions are difficult to define, and different jurisdictions draw the line in different places. Even the arbitral institutions have different views – the ICC will publish awards where the parties do not object while other institutions require positive consent. Further, making confidentiality an “opt-in” regime does not solve the problem – most parties will opt in, leading to continuing uncertainty as to what exceptions might nonetheless apply.

Given the lack of consensus and the fact sensitivity of the questions, the Law Commission has sensibly opted for a classic common law solution – it favours leaving the courts to decide the limits of confidentiality flexibly, on a case by case basis, rather than seeking to define it in advance in revisions to the 1996 Act.

Zoe O’Sullivan KC is a barrister and arbitrator at Serle Court Chambers

PARALEGALS ARE PART OF FOOTBALL’S EXTENDED TEAM

argues Amanda Hamilton

In the coming weeks, millions of television viewers will be glued to the World Cup in Qatar. Many (likely the majority) of those armchair fans will be in the can-barely-kick-a-ball category – and depending on how things go, perhaps that’s how we will be describing some of the millionaires on the pitch. But the point is, you don’t have to play the game to love the game. And you don’t need to play the game to be part of a club; you don’t need to be in the squad to be part of the team.

Football is a multi-million-pound business, and players and managers are the parts of that business that are visible; just like an iceberg, there’s so much more to a football club than the bit we see. Most premiership football clubs employ doctors, physios, chefs, waiting staff, receptionists, security, cleaning staff and a whole team of lawyers and paralegals to deal with the day-to-day running of a club, its players and any legalities that may occur.

The most obvious need for legal expertise is players’ employment contracts, but football clubs can also be involved in buying or renting a property for players or staff, or assisting with legal matters relating to driving offences, or marital problems, or defamation actions and publicity related matters.

Most clubs own their ground, but some clubs will lease a stadium; property contracts and planning permissions need to be handled correctly, with relevant laws and regulations properly followed. Contracts are required for many areas of a club’s business, from kit contracts and sponsorship deals to half-time food and beverage concessions. A club like Chelsea, for example, has a ‘village’ to run. This includes restaurants, cafés and bars, and promotional suites for guests. Plus, it employs hundreds of staff. There are many ways that the legal world and the football world intersect.

Being a paralegal may not sound glamorous to some, but if you love football, you could find that training as a paralegal (which takes less time and is less expensive than becoming a solicitor) is your ticket to a career in football.

Amanda Hamilton is Patron, National Association of Licensed Paralegals (NALP)

APPOINTMENTS OF THE WEEK

EXCELLO

Amanda Hurst (above) has joined national firm Excello Law as a real estate specialist to be based in the North West. She was previously at Hill Dickinson, where she headed up the national healthcare property commercial team.  Having qualified in 2002, she has a wide range of commercial property experience as well as specialisms in healthcare and education. Her focus lies with commercial landlord and tenant matters, as well as property acquisitions and disposals. She was recently listed in the Legal 500 2023 directory for both commercial property and public sector (health) in Liverpool as a ‘Next-Generation Partner’.

As with all Excello partners, Hurst will be free to choose her own working hours, and can work either from home or at one of Excello’s ten offices across the country. “I am really excited to join other like-minded, experienced consultants and continue to provide an excellent service to clients whilst working flexibly,” she said.

Jo Losty, director at Excello, said, “We’re always pleased to hear from lawyers looking to enjoy greater freedom to build their practice with all the infrastructure and regulatory support from an established consultant model firm like Excello.”

KINGSLEY NAPLEY

Charles Richardson (above) has joined Kingsley Napley LLP as a Partner to lead the firm’s multi-disciplinary Landed Estates practice and to work closely with its Family, Corporate, Tax, Real Estate, Employment, and Immigration teams   He was previously at Hunters Law LLP, where he became a Partner in 2018, having gained extensive experience advising landowners and their families in their personal and business affairs. This includes acting for some of the most significant landed estates by size and value in the country.

Richardson provides specialist advice on the tax and succession planning issues that arise around landed estates and inherited wealth and is recommended by both Spears and Legal 500 for his expertise in tax, trusts, probate and succession planning and is a member of the Society of Trust and Estate Practitioners (STEP).

 “Clients often turn to us when they need help protecting their families’ heritage and ensuring they can look to the future with confidence, “ said James Ward, Head of Kingsley Napley’s Private Client practice “With the expertise that Charles brings we are very well-placed to support clients with their long-term strategies.”

E-VENTS

TaylorWessing  Invitation:Cyber past, present and future: information security trends and predictions for 2023

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