Diary items, insights and comments from the legal world
Friday 1st October 2021
SHORT THOUGHT FOR THE WEEK
– SING OUT FOR WELSH JUSTICE?
For how much longer will there be a Law Society for England AND WALES? Combine the Welsh Assembly with the establishment of the Thomas Commission (which set a future vision for justice in Wales) then maybe the long-term direction of travel becomes clear. If the Scots can have their own legal profession than why not the Welsh? Indeed a key Thomas Commission recommendation, a couple of years ago, was for the setting up of a Law Council of Wales to promote the awareness of Welsh law and to ensure proper provision of teaching the law in Welsh.
So this week Mick Antoniw MS, Counsel General and Minister for the Constitution, gave an update on the Welsh Government’s commitment to pursue the case for the devolution of justice and policing to Wales. (There are also proposals for specific Welsh representation on the Supreme Court).
The Covid-effect means that we are now accustomed to seeing the Welsh doing things differently from the other parts of the UK. So maybe the time is ripe for Wales to be a jurisdiction to itself. It might not make much difference to London lawyers. But it could turbo-charge the legal scene in the Welsh capital.
NOTE: The LegalDiarist is currently travelling so this is a ‘pocket edition’ of the Legal Diary. We will return to the normal format in mid-October. Please continue to send your Diary stories, legal insights and comments to email@example.com
In this week’s edition
+ LEGAL DIARY OF THE WEEK
- Simon & Simon, A Dynamic Duo at Clifford Chance
- All Things (even Senior Partners) Must Pass
- Nods to the NEDS
- ‘Pity the Poor Immigrant’
- Banned Weddings giving way to Wedding Banns?
+ CONTRIBUTED ARTICLES OF THE WEEK
- WHERE NEXT FOR NON DISCLOSURE AGREEMENTS? by SIMON McMENEMY
- THWARTING PENSION SCAMS BUT AT A PRICE? by DANYAL ENVER
- PETROFAC CASE TO OFFER POWERFUL LESSONS by DAVD STERN
- LEADING THE LEGAL WAY by IAIN BLATHERWICK
LEGAL DIARY OF THE WEEK
Simon & Simon, A Dynamic Duo
It’s a rare thing for a City law firm to see any of its solicitors appointed to the status of Deputy High Court Judge but the ever-innovatory Clifford Chance can boast of having done it not once but, uniquely, twice this week. Moreover – and no doubt of great sociological significance – both of the heroes rejoice in the name of Simon.
Cue trumpets and applause then for Simon Gleeson and Simon Tinkler who will be embarking from tomorrow on their six year terms which will involve sitting for up to thirty days a year.
As well as a great record within the firm Simon Tinkler sits externally on the Solicitors Disciplinary Tribunal. Meanwhile, Simon Gleeson has the exceptional honour of being elected as a Visiting Fellow at All Souls College, Oxford and has written extensively on subjects such as the legal concept of money (now definitely on the LegalDiarist’s bucket reading list).
“I’m delighted and proud to see two of our UK partners will be sitting as judges in the High Court, at the highest level open to lawyers without previous judicial experience,” said
Michael Bates, the firm’s Regional Managing Partner for the UK. “It is a testament to both the calibre of the individuals, and also our culture of excellence in understanding how developments in law and legal policy really interact with the world of business.”
Should be a fascinating six years ahead.
All Things (even Senior Partners) Must Pass
Through one of those odd coincidences of timing Jonathan Metliss, a lawyer well-known in both legal and political circles in north London, reports to me that he recently came across the grave of Stanley Berwin in Edgwarebury Cemetery. Berwin was an all-powerful Colossus of the post-war City scene and founder of both Berwin Leyton Paisner (BLP) and S.J.Berwin. However, the grave was neglected and Mr.Metliss is now kindly arranging for it to be cleaned. Meanwhile Neville Eisenberg, a successor of Stanley Berwin’s as boss of BLP for many years before it merged with Bryan Cave to become BCLP, has just announced that he has decided to depart the firm. Well, we all have our endings and who remembers us thereafter? Or even cleans our graves?
Nods to the NEDS
While reflecting on great names from legal history one is tempted to lapse into Shakespearean mode and ‘Tell sad stories of the death of kings’. But time never stops for billable hours and life very much goes on over at the new corporate operation of Ince & Co. where there has been a very civilised passing of the Chairman’s baton from David Furst to Simon Howard at the firm’s AGM. “Today marks the start of a new era for Ince Group and I am pleased to be appointed as Chairman,” commented Howard who then went on to reference the appointment of two Non-Executive Directors. A new era indeed and un-recognisable to the generation of Stanley Berwin who would probably be turning in his newly spruced–up grave. NEDs indeed!
‘Pity the Poor Immigrant’
Whether politically, socially or legally, immigration is one of the biggest issues on the public agenda so it’s impressive to see that Fragomen is boldly taking the topic by the scruff of its neck through its new ‘Immigration school’.
Now in its second year the School is aimed at students and senior pupils who might be considering a career in one of the facets of the immigration ‘industry’ (the LegalDiarist’s word).
Topics covered range from how public opinion shapes government policy through human rights, immigration and the economy and the business of immigration law. “Our autumn immigration school is a terrific opportunity for students to hear from a variety of very different senior voices across the immigration landscape and a valuable addition to a CV,” says Nadine Goldfoot, UK Managing Partner at Fragomen which has more than 4,500 immigration professionals and support staff in 50+ offices around the world.
Banned Weddings giving way to Wedding Banns?
Figures released by the ONS recently revealed that divorce rates have increased significantly in England and Wales over the last 50 years while marriage rates have fallen. And it’s going to get worse according to Charlotte Coyle, a senior associate in the family team at Goodman Derrick LLP. “Many family practitioners are anticipating a further increase in divorces in 2022 with the introduction of the ‘no fault divorce’ in April next year,” says Coyle. “With ‘unreasonable behaviour’ being the most common reason for couples divorcing in 2019 according to ONS, those who have been wanting a divorce but have been waiting for this new legislation to come into practice will now have the opportunity to do so.”
But will the post-Covid wedding rush change everything? And will the divorce rate eventually flatten. “As family practitioners, we await with interest,” says Coyle. So do we all, says anyone with a family.
CONTRIBUTED ARTICLES OF THE WEEK
WHERE NEXT FOR NON DISCLOSURE AGREEMENTS?
This month, Maria Miller MP has again, in a Private Member’s Bill, raised the issue of using non-disclosure agreements or ‘NDAs’ in the workplace. But is there really a need to ban NDAs in the workplace? asks Simon McMenemy
An NDA can be a clause in a contract of employment which states that the employee will not discuss their company’s business affairs outside of work during or after their employment. But this does not prevent the employee from ‘blowing the whistle’ if there has been wrongdoing or criminal behaviour, as the Public Interest Disclosure Act protects employees from suffering a detriment if they do.
Sometimes NDAs can be standalone agreements, and are often used where an employee works in their employer’s home or has access to their private life and family. These are what most lawyers properly call NDAs and which are signed at the start of employment. There have been high-profile cases involving their breach and enforceability, such as the case with celebrity model Naomi Campbell.
In presenting her Bill, Ms Miller said that NDAs were “completely unregulated”. She went on to describe agreements signed at the end of the employment relationship. However, these are in fact ‘settlement agreements’, an invention of Parliament under the Employment Rights Act 1996 which allow employers and employees to resolve outstanding differences on termination of employment for a payment in addition to notice pay or redundancy pay.
This can normally be paid tax-free and so employees often ask for such an agreement. In return the employer has peace of mind that the employee is not going to sue them after they leave. Moreover, there are safeguards within the legislation to ensure that the employee must take legal advice before they sign such an agreement, usually paid for by the employer.
In the parliamentary debate Ms Miller referred to the #MeToo movement and said under her Bill, “No one, however powerful, could buy an employee’s silence if there were allegations of wrongdoing in the workplace”.
After the Harvey Weinstein allegations emerged – along with reports that employees he had assaulted were paid in return for signing settlement agreements – the Law Society of England and Wales (not Parliament) made clear that settlement agreements should specifically state that they would not prevent employees from legitimately whistleblowing.
So, to many employment lawyers, Ms Miller’s campaign to ‘ban NDAs’ seems confused and unnecessary. This may account for why it is not, at this stage, a Government-backed Bill.
Simon McMenemy is Managing Partner, Ogletree Deakins International LLP
THWARTING PENSION SCAMS BUT AT A PRICE?
The current draft regulations designed to help members avoid pension scams might well increase the schemes’ running costs suggests Danyal Enver
A consultation process has just ended on possible changes to the draft Disclosure of Information 2021 Regulations. These regulations will require trustees to “nudge” members in the direction of helpful guidance if and when they request to access or transfer their pensions. The intention is that this will reduce members’ risk to pension scammers.
Pension liberation scamming has been growing steadily over the last 15 years and has become a major issue, especially during Covid with many members more eager to make changes to maximise pension returns in the pandemic. It is in the nature of pensions that the amounts of money at risk to these scams, especially nearer to retirement, are significant.
The draft regulations aim to inform better decision-making amongst members by making them take note of guidance provided via Pension Wise (a free government guidance service). Trustees will be required to arrange for members to contact Pension Wise and possibly to embed the Pension Wise appointment process into their scheme platform. Members making changes to their pensions would have to opt out of this prompt.
The consultation responses highlighted concerns over the cost of this administrative burden, as well as inconsistencies between these draft regulations (which will affect trustees of trust-based defined contribution schemes) and the corresponding FCA requirements for contractual arrangements such as group personal pension schemes, both of which will add to that cost.
The consultation responses also noted that the draft regulations might be seeking to engage members at the wrong time. The initiating trigger for the guidance ‘nudge’ is a member requesting to transfer or consolidate their pension, but by this point, the member has decided on the course of action already and may just see the guidance as another hoop to jump through in an already burdensome process.
Despite these concerns this mandatory ‘nudging’ is expected to be implemented at some point over the coming months. Let us hope that it does, indeed, help reduce the ever-growing scam business.
Danyal Enver is an Associate at Arc Pensions Law.
PETROFAC CASE TO OFFER POWERFUL LESSONS
A hearing at Southwark Crown Court aiming to secure resolution to the four-year investigation by the SFO into corruption and money laundering at Petrofac is scheduled to conclude today with sentencing. Here David Stern offers an insight into how this case will impact the future direction which the SFO might take in relation to business crime and what large organisations can learn from this hearing – and any ultimate sentencing.
“This case is a departure from the recent practice of the SFO’s strategy of negotiating deferred prosecution agreements (“DPAs”) with companies avoiding any criminal convictions. Since the scheme was introduced in 2014, DPAs have been considered a welcome development for corporations in that they have enabled both sides to mitigate the risks and expense of lengthy trials whilst ensuring that companies make reparation for criminal behaviour.
Of course, in this case, the SFO had already secured a conviction against a former senior employee and the offences admitted to are of strict liability without the need to prove that the Company had acted dishonestly.
The approach taken in this case may represent a reassessment of the suitability of DPAs, particularly in cases where a ‘failure to prevent’ offence provides a clear route to conviction avoiding the problems associated with connecting criminal liability to a company’s ‘directing mind’. Government consultations are ongoing to consider increasing the number of these offences in relation to the failure to prevent economic crime.
Equally, guidance is clear that DPAs are only ever appropriate in instances where there is significant cooperation from the offending company. In several instances, (including agreements concluded with Airline Services Limited (2020) and Guralp Systems Ltd (2019) and Serco Geografix Ltd (2019)) the companies self-reported to the SFO. The circumstances of the investigation into Petrofac were likely not in the interests of justice for a DPA to be pursued.
In SFO v Standard Bank, it was stated that financial penalties featured as a term of DPAs must demonstrate broad comparability with a fine following conviction, and indeed in many respects it is unlikely that Petrofac will face more punitive consequences as a result of its conviction as opposed to reaching a DPA. The early guilty plea entered by the Company means it is likely any sentence will be subject to a discount of a third.
After Petrofac’s announcement their shares jumped more than 22% and this plea agreement represents the end of a long period of uncertainty for the company. Whilst the investigation was ongoing Petrofac would likely have been barred from obtaining government contracts and the resolution of the SFO’s investigation may now facilitate its ability to secure new contracts.”
DAVID STERN is Joint Head of Business Crime at 5 St Andrew’s Hill
LEADING THE LEGAL WAY: Culture, trust and influence
In the latest in our occasional series IAIN BLATHERWICK, former Managing Partner of Browne Jacobson and now a management coach, reflects on the importance of culture to law firms’ survival over the past ‘Covid months’ and the importance of building on strong foundations.
Much is written about the importance of culture within professional service firms and plenty of those firms write at length and in glowing terms about their culture. Cultures have been seriously tested over the last 18 months, as firms have relied on the loyalty, goodwill, and resilience of their people and the strength of team relationships at a time of more remote and sometimes less visible management and leadership.
Firms have had to place huge amounts of trust in their people, and to a very large extent they have been handsomely rewarded for that trust. A professional services firm cannot operate on trust alone – there is still a need for support, supervision, development and standards to be met – but people like to be part of a business which trusts them, and those benefits should not be lost lightly. It would be very damaging to move from those new levels of trust, admittedly achieved through necessity, back to a position of unnecessary controls and interventions.
The debate around the return to offices is fascinating in this context and as firms grapple with the best approach, it is interesting to ask where the pressure to return comes from. You hope that those people who had the view that you cannot be productively working unless in the office have now been silenced, although recent communications from some firms might suggest not. Clearly there are good reasons to encourage a level of office working – we have already mentioned team spirit and consider new recruits who need to become a part of an organisation and will benefit from close working and the support of people around them. Whichever approach a firm takes, it should be honest about why it has taken that decision, ensuring it doesn’t stem from a lack of trust in its people to deliver the service their clients expect.
A broader aspect of culture derives from the desire to help, whether that is colleagues, clients or the communities in which a business operates. Looking to build on the fact that the vast majority of businesses had successfully and responsibly navigated the challenges of the pandemic, the CBI recently urged us all to ‘Seize the Moment’ and to contribute to ensuring the UK delivers to its full potential. I commented at the time that it feels like we all need to build on this increased trust and create momentum by proving that businesses are genuinely interested in making a broader contribution to society. The majority of people in professional services are in a very privileged position and there is an ever-increasing expectation, not least from our own people, that we should use that position to influence, support and improve the communities around us. As the battle to attract and retain talent intensifies, those businesses who trust their people and who look to play a broader role in their communities will give themselves a competitive advantage.
Iain Blatherwick now runs Space + Time, an executive coaching programme aimed at c-suite level business leaders which offers support in horizon scanning and key decision making.