Edward Fennell’s Legal Diary – Edition 64

July 2, 2021

Friday July 7 2021 Edition 64

Diary news, commentary, insights, appointments and e-vents from the legal world

SHORT THOUGHT FOR THE WEEK – A ‘MOSAIC’ SOCIETY

On Thursday of next week (8 July),DLA Piper’s cultural heritage and ethnicity people network in the UK – MOSAIC – will host a client webinar to mark one year since George Floyd’s death. The key speaker will be Cephas Williams (founder of 56 Black Men & Drummer Boy Studios), who will reflect upon ‘where we are currently’ over a range of issues linked to race, identity and prejudice.

It is one of the signs of change that a major law firm (and DLA Piper is not alone in this) is leading on such an event. But the issue of race now stands alongside gender and sexual orientation as a matter of fierce debate in wider society. And not far behind lurk conflicts and controversy over religious adherence and national identity which can be even more explosive.

Of course the word MOSAIC itself has two meanings highlighting that identity and language are often ambiguous. But in this era of increasingly ‘binary’ culture wars where should – and where do – lawyers stand? Or should they just ‘check their privilege’ and get on with the job?

The LegalDiarist

In this week’s edition

+ THE LEGAL DIARY OF THE WEEK

Swiss Lawyers Score Goals (but face Penalties)

– Irwin Mitchell Move Up the League

– The Space Time Continuum

– Addleshaws Goes Ever Greener

+ CONTRIBUTED ARTICLES

– The UK’s Modern Slavery Act 2015 is getting tougher explains Sarah Lambert-Porter

– Akhmedova v Akhmedov: Piercing the corporate veil by Family Judges in England by Daria Sakhno,

+ LEGAL INSIGHTS OF THE WEEK

– Appeal by the Whitty attacker?

– Goodbye to SDLT

– Brexit is no barrier for data flows

+ APPOINTMENTS OF THE WEEK featuring Clyde & Co and Kingsley Napley

+ E-VENTS

THE LEGAL DIARY OF THE WEEK

Swiss Lawyers Hit Goals (But May face penalties)

What is it suddenly with the Swiss? In yesterday’s edition of The Lawyer the headline ran ‘Switzerland is fighting off rivals as it bids to remain the jurisdiction of choice’. And then in yesterday’s Reports Legal the country received a big, generous endorsement. ‘Switzerland: The magic still works’ it declared.

So, yes, everyone is talking about Switzerland. And most of the comment is positive. As Reports Legal observes, “At the heart of a continent so badly ravaged by Covid-19, Switzerland is emerging from the pandemic in relatively good shape. And so are Swiss law firms. Compared to its much larger neighbours, France and Germany, where the economies contracted by 5 per cent and 8 per cent respectively, Swiss GDP dipped by only 2.9 per cent last year. ‘This shows a robust economy,’ suggests Hans Rudolf Trüeb, partner at Walder Wyss. ‘Apart from tourism, events and restaurants, Covid didn’t affect GDP meaningfully. Above all, it hasn’t affected the legal market: rather the contrary.’

And yet not quite everything in the Swiss line-up is perfect. In terms of diversity in particular the Swiss seem to be still stuck in the 1970s. Indeed until very recently there was no female managing partner of any ‘prominent, full-service law firm’. So the appointment of Sandra De Vito Bieri as managing partner of Bratschi’s is a significant landmark by which it is hoped other firms will start to steer.

As the Reports Legal article points out it is mainly a generational issue. “There is a glass ceiling in Switzerland and the legal profession here is so backward in terms of women, I could almost cry,” one woman is reported as saying. “ It’s patriarchal. You have law firms with a lot of 50-plus, white, male, Swiss German guys who don’t want women, or who don’t want to make the effort to put them in the pipeline. But they are going to retire in a few years.’

So the clock is ticking – and already it may be into ‘extra time’. Soon there will be penalties.

For the Switzerland Report (July 2021) go to reportslegal.com

Irwin Mitchell Move Up the League

Given the problems they face, career-blocked women lawyers in Switzerland might consider swapping the mountains and lakes of their native country and opt instead for the charms of an Irwin Mitchell office in Sheffield, Birmingham or Gatwick (or, indeed, London, Glasgow or Manchester). The firm has just been ranked – for the second time – as one of the best firms for women in the UK by the Great Place To Work Institute and it now has women making up 40% of the executive board plus 47% of the partners. It also has one of the lowest gender pay gaps in the legal industry.

“We’ve used the challenges faced over the last year to listen and respond to the needs of our colleagues and this latest positive ranking demonstrates that while work remains to be done, we are moving firmly in the right direction,” said Susana Berlevy, Chief People Officer.

“ Our latest ‘flexible by choice’ and family policies show we continue to innovate to put diversity, inclusivity and responsible business at the heart of what we do, improving opportunities at Irwin Mitchell for people from a wide range of backgrounds.” So book that flight out of Zurich now.

The Space Time Continuum

Law firms offering add-on services is now becoming normalised. The latest entrant to the field is Browne Jacobson which has launched Space + Time, a brand new dedicated executive coaching programme which offers support to senior business leaders “to ensure that they are working to the best of their abilities, covering issues such as leadership, prioritisation, horizon scanning and key decision making.”

Fronting up the programme is the firm’s former managing partner turned consultant, Iain Blatherwick (pictured above) who lead the firm for eleven years through a period of key expansion. It is run in partnership with consultancy firm 10Eighty, and is supported by a team of expert coaches including Susan Mabbott, a former Browne Jacobson partner-turned-consultant.

Participants can come from a wide range of sectors and will be encouraged to ‘reflect on their performance, priorities and development needs’. “The Space + Time coaching programme goes beyond providing clients with the right legal advice,” says Iain Blatherwick. “It allows the firm’s coaching team to really get under the skin of the key issues that some of our clients are facing when running a business. Coaching is a very powerful tool which can really help people achieve their full potential. I would advocate any leader, at the start of their journey or perhaps in a more established position, to consider it.”

Addleshaw’s Goes Ever Greener

We’re in the middle of London Climate Action Week (LCAW) – the ‘annual event bringing together world-leading climate professionals and communities across London and beyond to find practical solutions to climate change’ – and Addleshaw Goddard has demonstrated its committment to the cause by becoming a founding signatory of the Greener Litigation Pledge.

GLP invites legal professionals across England and Wales to ‘take active steps to reduce the environmental impact of their dispute resolution services’ especially by limiting the production of printed documents and engaging with courts to support changes to rules, procedures and practices. So far eight solicitors’ firms, barristers’ chambers and other dispute resolution professionals have actively signed up to it including Mishcon De Reya, Freshfields Bruckhaus Deringer, HFW and Simmons & Simmons.

GLP is now part of Addleshaw Goddard’s wider menu of sustainability initiatives including membership of The Chancery Lane Project (reported on previously by the Legal Diary) which brings together lawyers from around the world to develop new contracts and model laws to help fight climate change.

“The legal profession has a major role to play in the critical work required to limit carbon emissions through the enforcement of laws in order to try to arrest the potentially catastrophic impact of global warming,” says Mark Molyneux, Head of Disputes for Addleshaw Goddard. “We all need to make sure that we play our part in that work by looking at how we operate as a profession and committing to more sustainable business practices wherever possible. The Greener Litigation Pledge is a great initiative which we all hope will play a part in helping the legal sector to become more environmentally responsible over the coming years.” Other law firms are now expected to be green with envy.

CONTRIBUTED ARTICLES OF THE WEEK

The UK’s Modern Slavery Act 2015 is getting tougher

‘Chattel slavery’ may have ended in the 19^th century but at last serious action is being taken against ‘modern slavery’ explains Sarah Lambert-Porter (below) of Ropes & Gray’s anti-corruption and international risk team

Back in September 2020, the UK Government announced an “ambitious package” of “powerful new measures” to strengthen the Modern Slavery Act. Their message: “It’s not enough for government and businesses to simply say they don’t tolerate modern slavery.” Notable changes would be:

· Extending reporting obligations to public bodies with budgets over £36 million.

· Mandating specific reporting topics and publication on a new Government-run registry.

· Introducing financial penalties for commercial organisations failing to meet their obligations under the Act.

The Government has twice indicated that the necessary legislation will come ‘when Parliamentary time permits’ – a regular refrain since the pandemic began.

‘The time has come’, the Walrus said

Those waiting may have sat up to attention on 15 June 2021, when the Modern Slavery (Amendment) Bill was introduced to the Lords as a private members’ bill sponsored by crossbench peer Lord Alton of Liverpool. Nothing is guaranteed; private members’ bills seldom progress successfully through both Houses given limits on permissible parliamentary time and difficulties achieving cross-party support.

Success would give the Act some real teeth. The Bill seeks to create two new offences and introduce new disclosure and substantive compliance requirements. In outline:

· It will be an offence:

o to supply a false or incomplete information in modern slavery and human trafficking statements (currently required in New South Wales and proposed in Canada).

o to continue to source from suppliers that fail to demonstrate minimum standards of transparency, after having been issued a formal warning by the Independent Anti-slavery Commissioner – a new power for the Commissioner. Conviction on indictment will lead to a fine of 4% of global turnover (up to £20 million).

· The additional transparency requirements, which go beyond disclosure and will necessitate enhancements to many companies’ compliance programmes, will oblige companies to:

o publish and verify information about the country of origin of supply chain sourcing inputs.

o arrange credible external inspections, external audits, and unannounced external spot-checks.

o report on the use of employment agents acting on behalf of an overseas government.

Even if not passed, it is clear that the UK Government plans to step up the legal and reputational risks for businesses operating in the UK and other countries have tended to follow suit.

For more go to: https://insights.ropesgray.com/post/102h0v0/the-uks-modern-slavery-act-2015-is-getting-tougher

Akhmedova v Akhmedov: Piercing the corporate veil by Family Judges in England by Daria Sakhno, Zaiwalla & Co

When deciding where to file for divorce, international parties often consider factors such as their primary place of residence, where the marriage was registered, or the location of assets. The recent judgment in Akhmedova v Akhmedov [2021] EWHC 545 (Fam)(“Akhmedova”) highlights the potential importance of also considering the range of procedural advantages available in a particular forum when making that choice.

English courts will aim to reach a judgment enabling the parties to meet their financial needs, while prioritising the needs of any children. To achieve that, English judges use several well-established precedents, as well as legal tools, such as ‘piercing the corporate veil’. This has particular relevance in situations involving high-net-worth families, where a spouse may have assets held through complex corporate structures.

While the device of piercing the corporate veil is commonly known in corporate cases where the court may, in exceptional cases, disregard a company’s legal personality as separate and distinct from its shareholders, it has seen increasing recent use in family proceedings. In Akhmedova, the High Court applied the doctrine of piercing of the corporate veil based on the ‘evasion principle’ to the actions of Mr Akhmedov, having concluded that he hid part of his assets, namely the luxury yacht ‘Luna’, which was previously owned by Mr Abramovich and is the second-largest expedition yacht in the world, through complex offshore asset structures. The Court found that certain corporate entities were merely the ‘alter ego’ of Mr Akhmedov and should be joined to the proceedings as separate respondents.

In Akhmedova the English courts demonstrated their ability to keep pace with the continually developing ways in which high-net-worth spouses hold and attempt to shield their assets. Moreover, when deciding divorce cases, English family judges can draw upon tools inspired from corporate litigation, even if in practice it is become exceedingly rare for a claim to pierce the corporate veil to succeed in England in a company law context. The question remains open if whether the decision to pierce the veil in family proceedings will bind a future court in a commercial dispute where a creditor seeks the personal liability of the spouse that owns the company.

LEGAL INSIGHTS OF THE WEEK

The Whitty Assault

Sacked by his employer for attacking medical supremo Chris Whitty, what are the prospects for estate agent Lewis Hughes ?

“Essentially someone could be dismissed if the conduct in question amounted to gross misconduct. In this instance, although the actions did not relate to something he did whilst working, if they could bring the employer’s reputation into disrepute, it could be seen as a reasonable response.

“The first point here to note is whether he has sufficient length of service to bring a claim for unfair dismissal. If he did not have two years’ service, he can’t raise that claim anyway. It may well be that he hadn’t been with his employer for that long anyway.

“If he did, the Tribunal will consider all the circumstances. As his behaviour has been well publicised and condemned by all [Including the PM], then provided a reasonable investigation and disciplinary process was followed before dismissing him, the estate agency [which employed the person responsible] may be able to persuade a Tribunal that by continuing to employ him, it would undermine them, and a lesser disciplinary sanction would not cure that.”

Philip Richardson, partner and head of employment law at Stephensons

‘GOOD-BYE’ STAMP DUTY HOLIDAY

“It has been a busy few months for the property market, as purchasers look to take advantage of the extended SDLT holiday. To benefit from the majority of the advantage, purchasers must substantially perform contracts (normally by completing the transaction) by the end of June. Those that do so can save up to £15,000 in SDLT.

“Those missing the deadline should not despair; the SDLT holiday (albeit in reduced form) does not expire completely until the end of September, and a saving of up to £2,500 may still be available.

“It is important to remember that whilst the end of June SDLT saving is significant, it pales into near insignificance when viewed against the overall costs of buying a new home. Perhaps some buyers have paid more than they might otherwise have in order to beat the SDLT deadline. Hopefully any such over payment will not be greater than the SDLT saving they were chasing.”

Tom Allfree, Head of Residential Property at Wedlake Bell

“The impact of the extended stamp duty holiday has been tremendous. This is clear from the significant increase in instructions across the country and relating to all values. There has been an unprecedented number of completions in June.

It is the kick start the residential property market required to address pent up demand, which has been sluggish for several years. Let’s see if the momentum continues with the lesser stamp duty saving.”

Hema Anand, Partner and Head of Residential Property at BDB Pitmans,

“The SDLT holiday has spurred on the market and deals which would have previously taken many months have been rushed through by solicitors and banks working overtime to try to help as many people as possible achieve the SDLT saving. There have been many buyers who have been lucky enough to complete on or before 30 June 2021 but there is little that buyers can do if they have missed the deadline except to try to renegotiate the purchase price with the seller. Until the end of September there is at least a small saving that can still be achieved.”

Lucy Barber, Partner and Head of Residential Property at Forsters

Brexit is no barrier for data flows

This week the The EU Commission adopted two adequacy decisions for the United Kingdom to allow the free movement of personal data from the EEA to the UK in accordance with the GDPR.

“You can almost hear the collective sigh of relief from organisations across the EU and the UK on hearing this news. After months of uncertainty, the 30 June deadline approaching and the recent approval of new EU SCCs, for now, no additional measures will be needed to transfer personal data lawfully.

The recognition of the UK’s data protection system as aligned with the EU should provide great economic benefits as well as remove uncertainty, as data can flow freely across the North Sea, Irish Sea and Channel. Crossing the Atlantic, however, remains one of life’s more difficult challenges. Perhaps it is one that we should now turn to.

Rohan Massey, Ropes & Gray’s Privacy, Data Protection and Cybersecurity team

“The European Commission has decided that the UK will continue to be seen as a safe country for the purposes of personal data flows from the EU. The news will be greeted with much relief by businesses, which would otherwise have been faced with having to consider costly alternative measures to continue those data flows.

“But no one should assume that the story ends here – the European Commission will continue to monitor the UK’s data-related laws and practice, and if it feels there is notable divergence from the EU model, it has the power to cancel the agreement. There will also certainly be some people watching closely from the sidelines, such as those in the civil society sector, who may bring challenges to the legality of the decision itself, or of data transfers made under the decision.”

Jon Baines, Senior Data Protection Specialist, at Mishcon de Reya

APPOINTMENTS OF THE WEEK

Laura Harper has been appointed by Kingsley Napley LLP as a partner in its Private Client team. Harper’s arrival brings the total number of partners at the firm to 70 (38 of which are female [54%]).

Harper advises both UK resident and non-domiciled individuals, families and trustees on a wide variety of UK tax, trust law and international estate planning issues, including the planning to be undertaken when moving to or from the UK. She is also expert in charity law and advises family offices and UHNW individuals on how to structure their philanthropic projects in the most tax efficient manner, as well as charitable entities on their responsibilities as the beneficiary of philanthropic gifts.

She joins the firm from the London office of McDermott Will & Emery where she was a member of the international tax advisory team in the Private Client department for the last three years. Prior to that she was a Senior Associate at Blake Morgan.

Laura was rated “one to watch” in Chambers and Partners in 2019 and was selected in the Top 35 under 35 by e-Private Client in 2017. She is a fully qualified member of STEP and has completed the STEP Advanced Certificate in UK Tax for International Clients.

Jan Spittka has been appointed by Clyde & Co to its Dusseldorf office to extend its data privacy and cyber capabilities in continental Europe. Spittka joins from DLA Piper and has a special focus on complex data-related issues such as the introduction of new technologies, international data transfers and cloud computing projects. In particular, he advises on privacy and data protection as well as IT security requirements in the insurance and financial services sector.

Dr. Henning Schaloske, Partner and head of the firm’s German insurance practice, comments: “Jan is an important addition to our German and European corporate insurance services. The pandemic and the consequent shift to remote working, allied to increased regulation and enforcement, have made cyber risk and incidents all the more real for businesses. Jan will help us serve those businesses in Germany and continue to advise them in a joined-up manner across the globe.”

Clyde & Co regards itself as the world’s pre-eminent insurance law firm, offering great depth of coverage and defence capabilities across every line of insurance and reinsurance business, from the smallest claim to the most complex loss.

E-VENTS

Georgetown Law and EY – Compliance & Legal Risk.

In episode 1, join our host Ronald J. Coleman (“RJ”), Georgetown Law, as he speaks with Jennifer Joyce, EY, and the Hon. John M. Facciola (Ret.), Georgetown Law, about the eDiscovery challenges posed by social media and other ephemeral data. Be the first to listen, subscribe, and let us know what you think!To keep up with our podcast, click the link below:

Compliance & Legal Risk Website

BIICL is delighted to host the Second Annual Asia-Pacific Europe Law Institutes Alliance (APELIA) Conference which will take place on July 12 2021. The theme of the conference is “Artificial Intelligence (AI), Trade, and the Rule of Law” and we would like to invite you to join us for this prestigious event which will include contribution from scholars of prominent law institutes in Asia-Pacific and Europe, as well as policymakers, judges, AI scientists and entrepreneurs.

Artificial Intelligence (AI), Trade, and the Rule of Law

12 July 2021

We have been captivated by Alpha-Go, experiencing driverless cars, considered smart contracts, tempted by crypto currencies, relying on the use of AI robotics in production, distribution, and product delivery; most importantly we are witnessing, with relief, its targeted application in the development of new vaccines during the COVID-19 pandemic. However, AI is also challenging scientific, ethical, legal, and regulatory norms. Where are we now and where are we heading as regards AI technologies? Who is responsible for AI’s applications? How do we eliminate AI bias? How do we deal with cross-border data flows? What legal status may be most beneficial for stakeholders? Although initiatives on AI are being suggested and promoted by national and international actors, there is still a long way to go to reach a consensus on AI under the combined effect of a technological revolution and international political and trade arm wrestling. This multidisciplinary conference will examine and debate those challenges against an international context.

Find out more about the conference and download the programme here

We hope you are able to join us. If you would like to register please click the link below:

RSVP