Diary news plus insights, commentary and appointments from the legal world
February 24 2023
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SHORT THOUGHT OF THE WEEK: Values-based laws?
The current row in Scotland over the relationship between personal religious conviction and law-making raises interesting issues in the Age of Woke. The passion with which it has been conducted probably says a lot about society north of the border which is unlikely to be replicated in England (Wales and N.Ireland must answer for themselves). Yet the suggestion that there should be a system of apartheid in values seems peculiar in a country whose constitution (albeit unwritten) includes a Head of State who is also the Head of a Church and in whose second chamber sit a number of religious leaders.
By and large the system works through the well-worn practice of British fudge, evasiveness and turning a blind-eye. But if law-makers are subjected to intense inquisition on the source of their political values on the grounds that they might be illegitimate then it could represent a significant step away from a tolerant Open Society. The world of Orwell’s Nineteen Eighty-Four is already with us in some key respects but maybe best not to add ‘Thought crime’ to the mix.
In this Week’s edition
+ LEGAL DIARY OF THE WEEK
– London International Disputes Week Announces Supreme Lift-off
– Kennedys Partners with The Children’s Society over Mental Health
– One Punch Can Kill
– Cost Lawyers Go for Broke with New Qualification
+ LEGAL COMMENT OF THE WEEK on the NAO report on the courts, football regulation, client checks by law firms and biodiversity net gain
+ CONTRIBUTED ARTICLES OF THE WEEK
– Debt markets are adapting to the new landscape
says Paul Ray
– Rogue directors using and abusing pandemic support schemes – what have we learned?
by Maria Madara
+ LEGAL APPOINTMENTS OF THE WEEK at Cripps and Hodge Jones & Allen
LEGAL DIARY OF THE WEEK
London International Disputes Week Announces Supreme Lift-off
A big event needs a big name keynote speaker and this year’s London International Disputes Week (LIDW) boasts one of the most impressive with the Rt Hon. Lord Neuberger of Abbotsbury, former President of the Supreme Court, addressing delegates during the Core Conference Day.
Running across five days from Monday 15th to Friday 19th May, LIDW23, now in its fourth year, will explore how disputes professionals are adapting to a changing world through its series of keynote lectures, panel discussions and networking opportunities.
“I am pleased to be opening LIDW23 and to take part in the discussions and debate on the future of disputes in London ” said Lord Neuberger. “One needs only to look back to when I last spoke at LIDW, in 2021, to see how quickly the disputes landscape is evolving. In order to get ahead of these changes, the insights gleaned from a diverse range of leading disputes professionals at LIDW should be of great value to industry leaders and I will seek to draw on my experiences working around the world.”
The conference agenda will cover topics such as:
+ The evolving role of the in-house disputes lawyer: what are the priorities, and what does it mean for private practice?
+ Looking to the future: how will the metaverse and AI change practice?
+ Navigating the maze: cross-border data and disclosure challenges.
+ ‘As the world changes: the role of the judiciary’ in partnership with the Standing International Forum of Commercial Courts.
“For the first time LIDW23 hosts an international arbitration day recognising the importance of London for international arbitration,” saidLuke Tucker-Harrison, Co-Chair of LIDW. “The LIDW23 theme, ‘Adapting to a Changing World,’ reflects the rapidly changing world in which the disputes profession now operate and is intended to challenge us all to look beyond the horizon at how we shall have to assist resolve the disputes of the future.”
Kennedys Partners with The Children’s Society over Mental Health
Kennedys has set itself a fundraising target of £120,000 over the next three years to support the UK-wide work of The Children’s Society along with its affiliates, Children 1st in Scotland and Youth Action in Northern Ireland.
The prime focus of the funding will be to promote vital mental health and well-being support for vulnerable young people. This will involve making sure that children in need have enough to eat and a safe place to stay. Access to counselling for victims of abuse, exploitation and neglect will also be part of the agenda and Kennedys will provide pro bono legal support.
The idea for the initiative came from Bernadette O’Hara, a trainee paralegal in the London office who recently won the firm’s Harry Hails Apprenticeship Award (established in memory of one of the major drivers of the firm’s growth).
“Kennedys has a long and proud history of partnering with charities that support and inspire young people and we’re delighted to add The Children’s Society to that list,” said Kate Hursthouse, head of ‘responsible business’ at the firm,
“The work it does is so vital – particularly after the restrictions imposed during the pandemic and the impact that had on charities’ funding streams – there is a real shared appetite and excitement from colleagues to get involved and help make a difference.”
Pippa Lock, head of corporate engagement at The Children’s Society, commented, “We are so excited to be a charity partner with Kennedys over the next three years. Right now, the need to improve children’s mental health and support vulnerable children and young people has never been greater.”
For more about The Children’s Society click here.
One Punch Can Kill
HF (the law firm previously known as Horwich Farrelly, motto ‘People. Not Just lawyers – We’ve been disrupting the status quo since 1969) has announced that its charity partner for this year will be One Punch UK which is dedicated to raising awareness around the devastating impact one-punch violence assaults can have on a victim, families, and perpetrators.
The choice marks the experience of Jack Jermy-Doyle, a former Litigation Executive in HF’s Recoveries team, who was killed in 2022 after being assaulted. The firm has been helping to support Jack’s family since his death and in tribute to Jack, asked his parents to nominate the 2023 charity of the year.
“Supporting One Punch UK means a great deal to all of us at HF and the loss of Jack is felt throughout the firm,” said HF CEO and Managing Partner, Ronan McCann. “Partnering with a charity each year is something we take extremely seriously as an opportunity to give back to the communities in which we live and work. It’s a core part of our values at HF, and this year it’s a cause close to all of our hearts.”
One Punch UK is run by Maxine Thompson-Curl and Tony Curl. 12 years ago, Maxine lost her son, Kristian, after he was assaulted and sustained a catastrophic brain injury. For the last 10 years, Maxine and Tony have been campaigning to raise awareness and improve the support for families who suffer from the consequences of one-punch violence.
For more on One Punch go to https://www.onepunch.org.uk/
Cost Lawyers Go for Broke with New Qualification
,“Too often, when we talk about legal careers, we focus on the roles of solicitor and barrister, and the training paths to qualify in each,” says Madeleine Jenness, the new head of education ACL Training – the training arm of the Association of Costs Lawyers. “What does not get enough attention are the alternative legal careers available, or the professional qualifications available post-qualification for specialism, of which costs law fulfils both.”
Jenness is now actively campaigning to make law graduates aware of the possibilities that lie within the costs field.
“When I couldn’t obtain a training contract, it was as if a door had been closed to me,” she says. “I had no idea that there were other options I could consider with my Graduate Diploma in Law and work experience until I moved into legal education. The work of Costs Lawyers is hugely important and has the potential to be highly impactful in terms of the delivery of legal services.”
A report by consultancy Hook Tangaza last year, commissioned by the Costs Lawyer Standards Board, said Costs Lawyers could exert a downward pressure on the cost of legal services at a time at a time when large corporate buyers felt they are “out of control.”
One of the key issues is to attract more people into the Costs profession. Contributing to this will be a new training course in conjunction with a reformed qualification process which would reduce the amount of qualifying work experience from three years to two and enhance the flexibility and periods of study.
For more go to: https://www.associationofcostslawyers.co.uk/
LEGAL COMMENT OF THE WEEK
TOPIC: This week’s National Audit Office progress report on the HMCTS court reform programme,
COMMENT BY: Nick Vineall KC, Chair of the Bar
“The Bar Council supports the need for court and tribunal reforms, and it is essential reform is delivered efficiently, effectively, and in ways that do not come at the cost of access to justice.
“Many of the problems with the court reform programme identified in the NAO report echo the experiences we have heard from barristers on the ground. It is clear that the problems with the Common Platform have caused real concerns but the thinking behind it makes sense and getting the delivery right will be a key component of the strategy for reform.
“We note the HMCTS response recognising the need to put things right and we will continue to work with HMCTS on the programme to make sure all court users can realise the benefits of reforms.”
TOPIC: The Government’s White Paper on football
COMMENT BY: Alex Haffner, Regulatory Partner, Fladgate
“There is much to chew on in the White Paper, and it can be seen as something of a reaction piece to the events of recent years which have shaped football in this country, namely rogue owners, the threat of the European Super League and clubs finding themselves on the financial precipice.
From a legal and regulatory point of view, a key issue is going to be not just the scope of any new regulator’s powers, which are clearly going to be extensive, but what checks and balances will be included is going to be equally important if “fair play” is to emerge.
The White Paper suggests that any decisions of the regulator should only be appealable on judicial review grounds, a narrow scope upon which to challenge what are likely to be contentious decisions. This aspect, amongst many, will require further consideration and be likely to attract some robust responses from stakeholders.”
TOPIC: The report that a sanctioned Russian warlord satisfied UK anti-money laundering checks by a London law firm by submitting a utility bill in the name of his 81-year-old mother.
COMMENT BY: Nick Gould , Solicitor / Partner, Aria Grace Law CIC
“Regulation of British legal system – greatest in the world.”
TOPIC : The Government’s newly-published guidance documents, relating to ‘biodiversity net gain’ (BNG, a concept that aims to leave the natural environment in a measurably better state than it was before).
COMMENT BY: Ben Standing, a government and public law sector expert and partner at Browne Jacobson
“This new eagerly awaited guidance and consultation response does provide useful further information, such as small sites note being required to comply with mandatory BNG until April 2024. The consultation response explains that the delay for small sites being mandated to deliver BNG is intended to allow both local planning authorities and developers a longer period of time to adapt to the new requirements.
“In addition, there is greater clarity over which sites will be exempt from BNG, including at a minimum threshold of 25 m².
“It is also interesting to note that the guidance references that the Government has confirmed that they will be providing further funding of up to £16.71 million for Local Planning Authorities to prepare for mandatory BNG between now and November 2023. This is in addition to the £4.18million committed to in January 2022. A key issue for LPAs however will be how quickly this funding will be made available, and the ability to recruit suitably trained officers.”
“The new documents however don’t provide draft statutory instructions, and there is still a number of questions about how the market aspect of BNG will operate.”
CONTRIBUTED ARTICLES OF THE WEEK
Rogue directors using and abusing pandemic support schemes – what have we learned?
by Maria Madara
When the government rapidly rolled out a variety of business support schemes during the pandemic, it was sadly inevitable that this would invite abuse from rogue directors. Recently released Insolvency Service figures show that between April 2022 and January 2023 alone, 312 directors were disqualified for reasons related to the abuse of pandemic support.
The government’s £47 billion bounce back loan scheme became a particular target for abuse. This scheme enabled businesses to take out a government-backed loan of up to 25% of a business’ turnover, up to a maximum of £50,000.
The scheme was particularly prone to abuse, thanks largely to the inadequate basic requirements needed to qualify for a bounce back loan. When combined with a lax approach adopted by some financial institutions to verifying applicants’ information, this scheme became a recipe for disaster.
Investigations have since revealed that bounce back loans were regarded as “free money” by some unscrupulous directors, with one reportedly being used to buy a sports car. Although only one loan was allowed per company, a Glasgow director was disqualified for 11 years for taking out two loans on the basis of false information. Others were found to have used the business-support loans for shopping, personal expenses, and money remitted overseas. The loans were only to be used for the economic benefit of the company.
Bounce back loans were even granted to dormant companies, which were not trading at the time of their application. This is a clear violation of the bounce back loan requirement that businesses should have been established on or before 1 March 2020.
Simple online checks by banks could have prevented such abuse. Clearly, some financial institutions failed to carry out basic due diligence before granting bounce back loans, yet this does not justify the misconduct of those directors disqualified for making misleading loan applications. The onus lies with directors to ensure they are not in breach of the fiduciary duties they owed to the company, which include a duty to provide truthful and accurate information to financial institutions.
It is reassuring that the government has taken active steps to hold such directors accountable, however, this does not guarantee that the taxpayer will ultimately recover the misappropriated funds. Where financial institutions have been negligent, liability may possibly rest with them.
As further investigations are being carried out, we can anticipate more enforcement action against unscrupulous directors this year.
Maria Madara is a Solicitor at KaurMaxwell
Debt markets are adapting to the new landscape
says Paul Ray
It feels like spring is on its way and…also movement in debt markets
2022 was certainly a challenging year in the transactional market. We faced challenges in the economy including inflation, rising interest rates and supply chain issues.
My firm’s banking & finance team saw very good activity levels in H1 2022 with deal volumes up 10%. H2 2022 though was turbulent with the hit to confidence due to the sudden rise in interest rates and political uncertainty following the mini-budget.
Development finance transactions were particularly impacted. With the cost of labour, finance and materials escalating it was very difficult for developers and funders to get comfortable on the cashflows for development projects.
But now in 2023 there are signs that debt markets are adapting to the new landscape and moving.
There is no lack of liquidity and debt funds and alternative debt providers (ADPs) have good appetite to fund transactions – and we are seeing asset-based lending picking up.
We are also hearing that debt advisors are picking up the phone again to the banks – after having in recent years looked to the debt funds/ADPs to fund their leveraged transactions. This is due to the increased cost of debt fund debt; approximately 10% pa compared to approximately 7% pa with the banks.
Higher interest charges inevitably put pressure on a company’s cashflow – hence more conservations with the banks. But the flip side to this is that the debt quantum that the banks can offer will be lower and we anticipate that private equity will be structuring deals with less debt and more equity (at least initially). Also, we may see club deals coming back with 2+ banks putting debt packages together.
Debt funds/ADPs will for sure still be in the market because they will be able to deliver higher debt quantums but in current environment of higher interest rates and the strain that that may put on cashflow, there will inevitably be increased controls around businesses making shareholder payments.
So, we have been on a journey over the last year! It seems markets are now stabilising and adapting and there is some momentum returning to the transactional market. But who knows what else 2023 will bring??
Paul Ray is a Partner at Browne Jacobson.
APPOINTMENTS OF THE WEEK
Sarah Glockler is joining Cripps as an employment partner in the firm’s London office. Previously with Memory Crystal, Glockler has over twenty years’ experience advising a wide range of clients, from large companies to senior executives, on all aspects of employment law with a special focus on contentious work. She has dealt with litigation in both the employment tribunal and the High Court including whistleblowing and discrimination claims in the tribunal and confidentiality cases in the High Court.
“We are delighted to be strengthening our employment offering to clients with Sarah joining our team in London,” said Melanie Stancliffe, partner in the employment team.
According to Glockler “The biggest topical issues in employment law currently are The Retained EU Law (Revocation and Reform) Bill (REUL) and The Protection from Redundancy (Pregnancy and Family Leave) Bill (Redundancy Bill) which could affect employment law if implemented. In terms of redundancies, the new Redundancy Bill proposes to extend the rights of protection from redundancy for women during or after a protected period of pregnancy.This would be a change that is particularly relevant this year when redundancies are on the rise due to economic uncertainty and the cost of living crisis.”
HODGE JONES & ALLEN
Geoffrey Simpson Scott has joined Hodge Jones & Allen as a partner in the firm’s clinical negligence practice. Previously the National Head of Clinical Negligence at Simpson Millar Scott has twenty years of experience in the field and is perhaps best known for authoring ‘A Practical Guide to Clinical Negligence – 2nd Edition’ the key publication in the sector (third edition due later this year).
“Hodge Jones & Allen has a proud heritage of fighting injustice and making sure clients get the best possible care and closure after experiencing difficult and sometimes, life-changing circumstances,” said Scott.
Agata Usewicz, Partner and Head of Medical Negligence at Hodge Jones & Allen, said: “We welcome the addition of Geoff to our team, he has an incredible track record of leadership, and successful case management. Hodge Jones & Allen has a leading voice in the fight for greater safety measures and better patient care across the country and securing justice for failed patients is key to this goal. We welcome Geoff to the team to bring his experiences and skills and are looking forward to him working with us to help those affected by negligent treatment and care”
…that’s it for this week
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