Edward Fennell’s LEGAL DIARY
Diary news plus insights, commentary and appointments from the legal world
April 21 2023
Editorial contact: fennell.edward@yahoo.com
SHORT THOUGHT OF THE WEEK: RAAB DIS-ROBED
We won’t be seeing any more of this
As someone might once have said, “One must have a heart of stone to read the demise of Dominic Raab’s career without dissolving into tears . . . of laughter.”
The Prime Minister’s famous commitment to running an administration based on ‘professionalism’ had a particular resonance in the case of the now-departed Justice Secretary. After all, he was a City-trained lawyer and he should have had an acute sensitivity to professional ethics and personal conduct. The fact that he was occupying one of the most senior legal roles in the land adds piquancy to the shambolic way in which it has all ended.
Obviously Raab’s individual, highly driven personal character is a major factor in the case along with the attitudes of the generation from which he has emerged. But, given his early City lawyer experience, there is also cause for reflection on the atmosphere in highly ambitious law firms. Is bullying part of the the City law firm ethos? Or is that now a phenomenon of the past?
The LegalDiarist
In this week’s Legal Diary
+ LEGAL DIARY OF THE WEEK
– Taking Fraud Seriously? That’s a laugh
– Hybrid-working making Partnership more Attractive?
– Leeds Law School Leads Support Through Court
– Forward Pass by Essex Law Firm Birkett Long
+ CONTRIBUTED ARTICLES OF THE WEEK
GETTING SHIRTY OVER A BEER by Joanna Ford
U.S. SECURITIES CLASS ACTION LAWSUITS: WHY SO MANY FROM THE UK? by David Kistenbroker, Joni Jacobsen and Angela Liu.
THE POST OFFICE SCANDAL:IS TIME RUNNING OUT FOR JUSTICE? asks Nick Gould
+ LEGAL COMMENT OF THE WEEK on the Raab removal, the Illegal Migration Bill, independent contractors, Lidl vs. Tesco and the dangers of concealing an inheritance.
+ APPOINTMENTS OF THE WEEK at Eversheds Sutherland and FTI Consulting
LEGAL DIARY OF THE WEEK
Taking Fraud Seriously? That’s a laugh
For as long as the LegalDiarist can remember the Serious Fraud Office has been a source of frustration, embarrassment and indignation. So when last month a major SFO prosecution was abandoned – despite having consumed an enormous amount of resource and time – it really came as no surprise. Just, frankly, what you’d expect.
So in the latest iteration of ‘hope triumphing over experience’ the City of London Law Society’s Corporate Crime and Corruption Committee, chaired by Eoin O’Shea (pictured above), has called this week for ‘urgent, focused reform ‘of the SFO.
“The Committee holds that it is necessary to address and fix the SFO’s shortcomings in order to protect the effectiveness of the UK’s justice system as regards complex fraud, and to maintain the UK’s reputation as a reliable hub for financial services and destination for investment,” it said.
Among a raft of recommendations are a 50% uplift in the SFO’s budget and the creation of a new ministerial position, a Minister of State for Economic Crime, based in the Home Office, who would ‘safeguard the independence and effectiveness of the relevant agencies’.
“Financial crime such as fraud is now an enormous social and economic problem,” observed O’Shea.” It cannot be investigated or prosecuted on the cheap. New laws are all very well but enforcement is key. It is vital for the UK to grasp the nettle of resourcing and reform of the SFO to protect public confidence in the justice system’s capacity to combat fraud, and the country’s international reputation.”
Sometimes throwing money at it can, indeed, solve a problem. But throwing good money after bad is no way forward.
Maybe a whole new approach is required.
Hybrid-working making Partnership more Attractive?
Yet another survey has confirmed the trend which became clear during lockdown – given a choice between being in the office and being at home, younger lawyers generally prefer the latter. Who would have guessed?
What is significant though is that half of millennial lawyers would be prepared to trade a portion of their salaries for more time off. That’s the stand-out figure from Major, Lindsey & Africa’s Millennial survey, just published this week.
“Trade-offs between pay and work-life balance have been happening for some time in the London legal market, but this trend has been accelerated by the pandemic,” commented Brent Harris, Vice President, Major, Lindsey & Africa. “The genie is out of the bottle on remote working. Lawyers have proven they can be just as productive, if not even more so, when working from home. Millennials have far greater choice about how and where they work than they have done historically. The career trajectory of a lawyer in a London law firm traditionally went in two directions: making partner or going in-house. Now, in-house legal teams within multi-nationals can offer attractive flexible working packages, with our survey finding that better work-life balance was by far the most common reason for lawyers interested in going in-house – it was the key motivator cited by 79% of respondents.”
One of the other intriguing issues to emerge from the report is whether hybrid working will persuade more young lawyers to stick with their firms and pursue partnership prospects. “Previously we had seen the number of millennials wanting to make partner in their firm declining, with 34% choosing this route in 2017, dropping to 24% in 2021,” said Harris. “Now, 45% would like to make partner. Many millennial lawyers will have worked through the Global Financial Crisis and the pandemic, two seismic economic events. Given these periods of economic uncertainty, it is unsurprising that the millennial generation is now looking for more stability by opting for the partnership route.”
Leeds Law School Leads ‘Support Through Court’
Leeds Court Image courtesy of Leeds Live
The prospect of facing court alone would be intimidating for anyone. But a decade ago, following the Legal Aid Sentencing and Punishment of Offenders Act 2012, the civil legal aid system underwent radical change so that whole areas of law were excluded from the scope of public funding, meaning more people had to cope with D-I-Y law.
One of the responses was an increase in pro bono work in this area. And in the latest example, Leeds Beckett University’s Leeds Law School has partnered with Support Through Court, a charity that provides free legal assistance and information to people who cannot access legal aid or afford a lawyer.
To mark the initiative the University’s law students came together on Wednesday of this week with Support Through Court, the Leeds legal community, HMCTS, senior judiciary, third sector agencies, and, to top it off, the Lord Mayor of Leeds.
“I am delighted that Leeds Beckett University can assist in the very important work Support Through Court does,” said Professor Deveral Capps, Dean of Leeds Law School. “Over the course of the next five years, Leeds Law School will provide student volunteers, telephone facilities, and face-to-face meeting spaces to help members of the public get free information and legal help. It is a testament to the reputation of Leeds Law School that Support Through Court chose to work with us.”
Emma Taylor, Interim Chief Executive Officer for Support Through Court, added, “Cuts to our services and the rising cost of living mean that our support is needed more than ever before. This is an exciting partnership that is enabling us to provide practical and emotional support to more people going through court alone.”
Could be life-changing.
Forward Pass by Essex Law Firm Birkett Long
Colchester Kings in League with the Union
When it comes to ‘coming out’ rugby has a more progressive record than football and this was emphasised again by the announcement that the recently launched Colchester Kings RFC, East Anglia’s first gay and inclusive rugby team, was to have as its kit sponsor law firm Birkett Long (offices in Basildon, Chelmsford, Colchester & London).
The firm boasts a long history of ‘actively supporting the LGBTQ+ community’. As well as running a number of LGBTQ+ focused webinars and publishing regular blogs focused on helping those in the community tackle legal issues, the firm is also notable for its high profile presence at local Pride events. “You will always see employees cheering on the Kings and handing out crowns at Kings matches,” the firm comments, “whatever the weather!”
Samuel Biscoe, Chairperson of Colchester Kings Rugby, responded, “We’re delighted to have Birkett Long as a sponsor for our inaugural year. Having a local firm that is visibly engaged in our community is really important to us and we’re delighted with the support that they have given us since we established the team last year. We look forward to a long and engaging partnership as the club enters the International Gay Rugby league this September.”
That reference, though, to ‘Rugby league’ is a bit confusing. Which rugby are they playing – Union or League? A number of the firm’s staff have completed LGBTQ+ awareness training offered by local charity The OutHouse – but do they discriminate when it comes to rugby codes?
CONTRIBUTED ARTICLES OF THE WEEK
GETTING SHIRTY OVER A BEER by Joanna Ford
M&S has been caught up in yet another trademark dilemma – this time, with Craft Beer Co. The pub chain accused the retailer of “ripping off” its trade mark on its t-shirts, for displaying its name on both front and back of the garment. M&S has, as a result, pulled the t-shirt from sale while the whole situation is investigated. Aldi, who has defended itself in various legal spats with M&S (including over its ‘copycat’ caterpillar cakes and light up gin bottles), was quick to criticise its nemesis on Twitter. But could we see resulting legal action in this case?
To bring a successful legal claim, Craft Beer Co. would have to prove that there is a likelihood of confusion between its brand and the slogan on the M&S t-shirt. But although the name is the same, Craft Beer Co.’s logo does not look the same as the M&S t-shirt graphic and M&S would probably argue that no-one would really associate their t-shirt with a chain of London pubs.
Importantly, Craft Beer Co. is also not a registered trade mark, which makes it much more difficult for the company to make an intellectual property claim. Any legal claim would have to be under the 19th century tort of ‘passing-off’, which is more difficult to prove than infringement of a registered trade mark. If the pub chain chose this route, it would have a lot to prove: for example, that M&S’s use of the wording on its t-shirts will confuse people to the extent that they would assume that the t-shirt is in some way linked to Craft Beer Co. – and that it has resulted in notable damage for the business (such as being negatively perceived by the public or making fewer sales).
This would be very tricky to prove, particularly as the media publicity that has been generated so far would probably attract more, not fewer, people to the pub chain.
The law in this area is complicated, and it would be a bold and determined (and well-resourced) small business that brings legal action against a powerhouse like M&S.
Joanna Ford is a partner at Cripps
WHY COMPANIES IN CHINA, THE UK AND CANADA SEE MOST U.S. SECURITIES CLASS ACTION LAWSUITS AMONG NON-US. ISSUERS by David Kistenbroker, Joni Jacobsen and Angela Liu.
It is important to bear in mind that a company does not need to be based in the U.S. to face potential securities class action liability in U.S. federal courts. Indeed, of the 197 securities class actions filed in 2022, some 34 were against non-U.S. issuers.
This represents just over 17% of the lawsuits which is slightly below 2021 figure of 20%. Continuing the trends seen in 2021 and 2020, companies with headquarters and/or principal places of business in China saw the highest proportion of cases with 11 lawsuits against such issuers.
Although the lawsuits cover a variety of industries, the largest portion of these related to the education and schooling industry, with five cases against Chinese tutoring companies. Several of the complaints related to material misstatements and/or omissions these companies made in their Registration Statements and related prospectuses ahead of their IPOs, while others focused on material misstatements and/or omissions relating to the potential impact of anticipated regulations on the company’s business.
In 2022, there were eight dispositive motions to dismiss granted with judgments entered, one motion denied, and six motions granted in part. The courts’ reasoning for dismissing these cases is still instructive for non-U.S. issuers, despite their small number. The primary reason for dismissal being plaintiffs’ failure to allege any actionable or material misstatement. Courts also dismissed complaints due to plaintiffs’ failure to adequately allege a strong inference of scienter.
Meanwhile, cases against other non-U.S. issuers – such as those based in the UK, Canada, Switzerland and Sweden — focused on companies facing lawsuits regarding declining sales, alleged bribes, anticompetitive or corrupt practices. The breadth and number of these class actions are a valuable reminder for non-U.S. issuers to take the necessary steps to mitigate the risk of such lawsuits. Namely, when making disclosures or other public statements, non-U.S. issuers should disclose both positive and negative results and ensure that the future plans and intentions are accompanied by the appropriate amount of cautionary language. In addition, non-U.S issuers should work with their legal counsel to ensure that a well-documented disclosure regimen is consistently followed and covers disclosures made in press releases, SEC filings and by executives.
Finally, it is worth remembering that companies are not immune to issues that may cut across all industries. It is therefore recommended to continually work together with a company’s insurers and experienced counsel who specialize in securities class action litigation.
David Kistenbroker, Joni Jacobsen and Angela Liu are partners at Dechert
THE POST OFFICE SCANDAL: IS TIME RUNNING OUT FOR JUSTICE? asks Nick Gould
On 23rd April it will be two years since the Criminal Division of the Court of Appeal overturned 39 wrongful convictions as part of ‘The Post Office Scandal’in which more than seven hundred sub-managers in local Post Offices were falsely accused and prosecuted for theft. To date, another further 50 or so have also been overturned. It has been described as the largest miscarriage of justice in UK legal history. The Court of Appeal decided that the prosecutions had amounted to an ‘affront to justice’.
I am one of the legal team representing Seema Misra, Tracy Felstead and Janet Skinner, three of the sub-postmasters wrongly convicted. They were wholly innocent of any crime and that was a fact known many years ago within Post Office Limited and by various of its internal and external legal advisors.
The Court of Appeal found that in their conduct of the prosecutions, “by representing [IT-based evidence] as reliable, and refusing to countenance any suggestion to the contrary”, the Post Office had effectively “reversed the burden of proof.”
It is extremely rare for the Court of Appeal to decide that a prosecution has amounted to an affront to justice. That such a finding was made in relation to so many cases, and in relation to the conduct of a single private prosecutor, was unprecedented.
The judgment put the spotlight on the Post Office leadership because this was no longer a case of mere incompetence that led to the wrongful prosecutions, but deliberate Post Office strategy. Who knew what, and when is one of the tasks which the Post Office Enquiry, a formal statutory enquiry, chaired by retired High Court judge Sir Wyn Williams, is investigating.
Two years after the Court of Appeal judgment, evidence is emerging that the Post Office still has many lessons to learn in how it continues to investigate what it claims to be thefts from its branches.
Two years after the Court of Appeal judgment and more than 20 years since the initial wrongful prosecutions and wrongful jailings, and for reasons unclear to everyone else, it appears the board of directors of the Post Office, and/ or its sole shareholder, and / or various of their advisors seem to continue to treat the scandal and its treatment of hundreds of innocent postmasters as an all-out war. Sub postmasters seem to be “collateral damage.”
Two years after the Court of Appeal judgment, the three existing compensation schemes appear to be complex, inconsistent, chaotic and unfair. On 27th April, Sir Wyn Williams, a retired High Court judge who is chairing the Post Office Enquiry,will hold a day of hearings into the various compensation schemes.
However, time is one thing many of the sub postmaster victims don’t have too much of anymore. To date it is understood that some 27 deaths and four suicides have been attributed to the scandal. That is almost certainly below the true numbers. More people will certainly get sick and more will probably die before it is ever resolved and justice achieved.
Nick Gould is a partner with Aria Grace Law CIC
NOTE: A team based at the University of Exeter and UCL has been appointed to discover more about the Post Office scandal, and the role of lawyers in it. The research will involve building a detailed case study of what happened and identifying any professional or ethical failures that contributed to it. Interviews with key participants, including sub-postmasters and in-depth causal analyses with key professionals will mean the project engages with hundreds of people with relevant insight.
The three-year project, funded by the Economic and Social Research Council, is led by Professor Richard Moorhead and Professor Rebecca Helm from the University of Exeter and Dr Karen Nokes, from UCL. The team is working with a professional partner LBC Wise Counsel, in-house lawyers and others, to understand and develop thinking on ethical decision-making more broadly.
Work by the research team has already led to the Post Office Inquiry being widened.
LEGAL COMMENT OF THE WEEK
TOPIC: Commenting on the resignation of Dominic Raab as Lord Chancellor and Secretary of State for Justice,
COMMENT BY: Nick Vineall KC, Chair of the Bar
“Dominic Raab leaves the Ministry of Justice with the criminal justice system in a parlous state and long delays in the family courts. It is time for a fresh start.
“The court backlogs continue to hinder timely access to justice for thousands and cause misery for all those working in the justice system, while anti-lawyer rhetoric undermines public confidence and adherence to the rule of law.
“The next Lord Chancellor will take an oath to respect the Rule of Law and to ensure the courts have the resources they need to run efficiently.
“The Bar Council wants to see a properly funded justice system and greater emphasis on early diversion to reduce the pressures on the system. We need a Lord Chancellor who is prepared to focus on detail and systems and getting sustainable funding for those involved in publicly funded work.
“We also hope the appointment of a new Lord Chancellor will prompt a rethink of proposed Bill of Rights Bill, which is a poor piece of legislation.”
TOPIC: The investigation into claims that the Justice Secretary Dominic Raab was guilty of bullying civil servants
COMMENT BY: David Greenhalgh, Partner and specialist employment lawyer at Excello Law
“This is a great victory for government employees, who have stood up for each other and have spoken out where they have not felt safe in the workplace.
“It is now widely accepted that bullying is unacceptable and just as damaging as discrimination. The problem is, however, that whilst harassment – a form of discrimination – is defined in law, there is no such definition for bullying.
“Dominic Raab has previously said he makes ‘no apologies for having high standards’ – it will now be for the Prime Minister to decide whether his behaviour crossed the line.
“It is of course right that a proper investigation has taken place and that innocent until proven guilty has applied. Great long term damage can be caused by suspending employees facing allegations and dismissing them without first following a proper process of investigation, allowing the employee to give their side of the story before any decision is made.
“Failure to act in investigating and taking disciplinary action where needed is damaging to the bottom line of any business because staff will just walk if they feel unsafe in the workplace. There is precedent here – then-Home Secretary Priti Patel reportedly reached a six-figure settlement with a senior civil servant after claims that he was forced out of his job for intervening to defend colleagues who had allegedly been bullied by Ms Patel.
“The key is trying to get employees to voice and report their concerns earlier. In this case it seems that many had issue with Mr Raab’s bullying but presumably felt unable to raise those concerns until they knew they were doing so in numbers.”
TOPIC: The Government’s proposals to amend the Illegal Migration Bill to allow ministers to ignore interim injunctions from the European Court of Human Rights
Comment by: Nick Vineall KC, Chair of the Bar
“Legislating to allow the UK Government to ignore the rulings of a court undermines the rule of law, which is the foundation upon which domestic and international justice systems are built.
“How can a government expect citizens to respect judicial rulings if it is willing to ignore them itself?
“The Bar Council echoes the concerns raised by the former Lord Chief Justice Lord Thomas. This would be bad law, sets a dangerous precedent, and risks serious damage to the UK’s international reputation. We urge the Government to reconsider this move.”
TOPIC: The lawsuit facing Just Eat and Gophr regarding the status of their employees as independent contractors
COMMENT BY: Mohsin Patel, Director and Co-Founder at litigation finance broker Factor Risk Management.
“Leigh Day’s “win” in 2021 regarding Uber drivers’ employment status was fundamental in paving the path for fair workers’ rights, with the latest action against Just Eat and Gophr following its lead.
“Since the pandemic the gig economy has boomed, allowing an increasing number of people to work with more flexibility than ever before. In the current economic climate, the industry has been vital to many individuals to supplement their earnings. However, non-standard working hours are not an excuse for big corporations to take economic advantage of a status loophole and, as a result, deny their workers of basic employment rights.”
Factor Risk Management is a leading independent global advisor and broker of litigation finance and after-the-event legal expenses insurance.
TOPIC: The High Court’s ruling in favour of Lidl in their copyright infringement claim against Tesco’s Clubcard logo,
COMMENT BY: Stephanie Wickenden, specialist intellectual property barrister at Serle Court chambers.
“It is unusual in that no claims were made of confusion as to the brand origin of goods or services, which is what the public most commonly think of when they read “trade mark infringement”. Instead the trade mark allegation was that consumers were led to believe that prices had been price-matched to Lidl by reason of Tesco’s use the yellow circle on a blue background. The Judge found this gave Tesco an unfair advantage as consumers were more likely to buy the goods thought to be price-matched.
“Even more unusual is the passing off claim, which was made out on the basis of misrepresentation as to equivalence. There have only been a handful of cases where this type of misrepresentation has been argued, often in a pharmaceutical context. In such cases it is argued that a rival manufacturer had adopted the look and feel of an original product to represent that it would work the same as the original. The ‘equivalence’ found here was not of effect or purpose but of price; Tesco was found to have misrepresented that its products were Lidl price-matched based on the yellow circle on the blue background. This is a novel finding and it will be interesting to see if it remains confined to the unusual facts of this particular case, or it starts a trend for further claims based on equivalence rather than confusion.
“Some people may be surprised to learn that the Lidl logo was legally judged to be an “artistic work”, and therefore protected by copyright. The threshold for a graphic design such as a logo is actually very low. The Judge found that the bringing together of the graphic elements and the text was a sufficiently original creation which took some time and skill. This is a fairly uncontroversial finding. More controversial is the finding that the yellow circle on a blue background used by Tesco was a substantial part of the Lidl logo. Here the Judge seems to have had in mind the significance of the yellow circle on blue as being distinctive to Lidl in a trade mark sense. This is irrelevant to determining whether a substantial part of a work has been copied in a copyright sense. What matters for copyright is whether the parts which contribute to the originality of the artistic work have been copied. This is questionable when the only copied elements are basic graphic shapes.”
TOPIC: The recent case in the High Court involving an academic who had concealed his £4 million inheritance from his ex-wife
COMMENT BY: Renato Labi, Partner at Hughes Fowler Carruthers
“Divorcing parties sometimes withhold financial information, which is a high risk strategy. As this case shows, if you are found out, it can be very expensive. Judges understandably hate being lied to, and if this comes to light you’ll end up paying out much more.
“If you discover you were lied to in your divorce, you can reopen everything, even years later. The family court has searching powers to force disclosure of documents – including those as drastic as ordering a bank to produce statements if someone can’t or won’t do it themselves.”
APPOINTMENTS OF THE WEEK
EVERSHEDS SUTHERLAND
Nicola Williams, formerly a partner at Eversheds Sutherland is returning to the firm’s regulatory practice. She re-joins from Welsh Water (Dŵr Cymru Cyf) where she was Legal and Compliance Director and Company Secretary.
Willliams has significant corporate governance and ESG experience including establishing Welsh Water’s approach to its ESG responsibilities, and devising its first report under the Taskforce on Climate-related Financial Disclosures framework. She was also the key liaison at the company for both membership and reporting to the UN Global Compact, linking reporting under the UN Sustainable Development Goals with the goals set out in the Wellbeing of Future Generations (Wales) Act.
“Nicola returning to us after 10 years in industry is a major plus,” said Ian Gray, Executive Partner with responsibility for the firm’s client strategy, “She is a proven performer in high level regulatory investigations and litigation work. Coupled with her deep utilities sector knowledge, she is a fantastic rehire for the firm. She will add to our client offering immensely, and she will lead our efforts to develop our water, electricity and gas sector relationships and particularly their ESG and environmental and regulatory obligations. More widely, she will help to develop further our General Counsel relationships across the firm in the UK, US and Europe.”
FTI CONSULTING
Bella von Bohlen is joining FTI Consulting, Inc. as a Managing Director in the firm’s Crisis and Litigation practice within the Strategic Communications segment in London. She joins from Deutsche Bank AG, where she served as Counsel in the Anti-Bribery and Corruption team where she was responsible for the compliance training of business groups across the bank. Previously she was a barrister at QEB Hollis Whiteman Chambers specialising in financial crime.
Von Bohlen has extensive experience as a financial crime specialist including advising a range of banks and financial institutions on how to navigate the post-2008 regulatory landscape. She counsels clients on transaction risk and mitigation measures and has advised regulators, such as the Financial Conduct Authority and the Competition and Markets Authority. Ms. Von Bohlen
“Corporate clients and law firms are increasingly calling on our services for reputation management throughout high-profile disputes,” said Rob Mindell , a Managing Director and the litigation communications lead in the UK at FTI Consulting. “Bella’s skill set will further deepen and expand our capabilities in complex cases of financial crime. She joins a team well-recognised for work in this and other areas, including competition, employment, IP, tax and commercial disputes.”