Friday 12 November 2021
Diary news, commentary, insights, and appointments from the legal world
SHORT THOUGHT FOR THE WEEK
‘Members of the Jury/House’ (delete as appropriate)
Readers of a certain age will recall the advertising campaign run by the Victoria & Albert museum which pronounced ‘Great Cafe (with rather nice museum attached)’. Might the same be said of Sir Geoffrey Cox QC?
‘Superb barrister (with occasional Parliamentary appearances)’ – should that not be his description?’
Cox is clearly a man of great talents. We saw that when he was – albeit briefly – Attorney General under Theresa May. But, really, are those talents not wasted if he is mere lobby fodder? After all, plenty of other people could be excellent General Practice MPs without his oratorical skills or presence before an audience. No wonder he decided to direct his time elsewhere. But it comes at a price.
A powerful letter in The Times yesterday by Ronald Thwaites QC observed of barristers who continued to practice at the Bar while also Members of the House of Commons that, “Often their contribution to the court proceedings were nugatory.” In other words, full attention is required to make an impact on a case.
The same seems to apply in reverse. Cox might still be popular with his constituents but his contribution to Parliamentary affairs appears, by all accounts, to have been ‘nugatory’ in recent months. Maybe the time has come to recognise that living a double life as an MP and a practising lawyer is less than the sum of the parts.
In this Week’s Edition
+ LEGAL DIARY OF THE WEEK
– Careful Where You Go, say Peters & Peters
– New Flight Command Announced for Bird & Bird
– My Tax or Yours? Asks Burges Salmon
– Inspiring Story from ‘Next 100 Years’
– LLOYD v GOOGLE Cristina Crețu, Alexander Dittel, Vikram Kumar, Caroline Harbord,
–WATER POLLUTION: THE CHALLENGE Peter McHugh
– THE PENSIONS REGULATOR ENFORCEMENT POLICIES CONSULTATION: FURTHER CLARITY FOR EMPLOYERS AND TRUSTEES Rhiannon Barnsley,
– APPOINTMENTS OF THE WEEK AT KENNEDYS and HORWICH FARRELLY
THE LEGAL DIARY OF THE WEEK
Careful Where You Go, say Peters & Peters
From A (Afghanistan) to B (Belarus) it’s dangerous out there – let along going all the way to U (Ukraine) – so it’s helpful to have a tour d’horizon such as that provided by business crime law firm Peters & Peters’ newly-published ‘REGIONAL FLASHPOINTS Scoping the landscape of legal and financial risk’.
Combining in-firm expertise with contributions from prominent observers of the international political and economic landscape – such as Tom Keatinge, Director of the Centre for Financial Crime and Security Studies at the Royal United Services Institute and George Magnus from the China Centre at Oxford University – the report take a close look at a slew of developing trends in legal and financial risk.
These range from exploitation of financial crime to Sino-US geopolitics, sanctions, mutual legal assistance, extradition, asset tracing, and ‘jurisdiction in a fractious world’.
As Peters & Peters Senior Partner Michael O’Kane comments in his introduction, “Geopolitical instability and regional realignments have always by definition had a profound impact on the shape and intensity of business and personal risk. The last two years are certainly no exception.” So well worth a read.
New Flight Command Announced for Bird & Bird
Gradually the last of the titans of the 1990s are leaving the stage with the news that David Kerr will be definitely quitting his role as CEO of Bird & Bird by Easter 2022.
In common with Peter Martyr at Norton Rose Fulbright, Kerr notched up enormous achievements by transforming a previously modest firm into a global power. In Kerr’s case that meant taking a small operation with a turnover of €23m, 70 lawyers and three offices and turning it into a €455m business with 1400 lawyers in 30 offices in a period of just over two decades. By contrast many other firms of that size would have been folded into other, bigger outfits and their names entirely forgotten by now.
Kerr’s rise to the top of Bird & Bird came about partly as a result of breaking the firm’s lock-step system and the emergence of a group of ‘Young Turks’ in the partnership in the 1990s. His key move was to become the Businesses Development Partner and arguing for international expansion. “I warned that if we didn’t act on this fairly soon then in five years the firm would no longer exist,” he recalled in the firm’s history.
It was a risky move but turned out to be wonderfully successful – based largely on Kerr’s capacity for relationship building. However, as with all long-standing inspirational leaders, there will be a big question over whether his successor can maintain momentum and the character of the firm. That mantle will soon fall on Christian Bartsch (pictured above on right) currently serving as co-head of the firm’s international Financial Services sector group and Chair of the firm’s Risk Committee. Kerr will be a big act to follow. Has Bartsch got the heft to do the job?
My Tax or Yours?
Launched earlier this week by Burges Salmon – the perfect Xmas gift for anyone who can’t make up his or her mind whether they are coming or going.
ResiCheck is the law firm’s ‘innovative tax App’ that helps people work out whether or not they have tax obligations in the UK.
Targetted at those who might be spending rather a lot of time, for example, in the British Virgin Islands, the App is designed to answer the questions posed by the UK’s Statutory Residence Test.
Users complete a simple questionnaire and receive an instant indication of likely residence status, along with a more detailed explanation. “The App can also be used to plan future residency and keep track of UK visits, with this information emailed directly to the user,” the law firm explains. Every MP-cum-Lawyer should have one.
Congratulations to Lynette Wieland, a social mobility ambassador for The Law Society, who has won the ‘Champion of the Year’ award at this year’s Next 100 Years Inspirational Women in Law Awards which celebrate the progress of women in the law since the Sex Disqualification (Removal) Act 1919,
Wieland – who is a health and social care advisory and inquests lawyer at Browne Jacobson – owes her success to her work with a myriad of organisations externally to promote diversity and social mobility. Meanwhile internally she has been central to steering the firm’s diversity and inclusion agenda over the last 12 months with a key role on the firm’s Disability Network and the D&I group.
Wieland herself has dyslexia, dyscalculia and Meares-Irlen Syndrome (a visual stress condition which can lead to difficulties around reading and spatial awareness). Having left school without A Levels she took on an apprenticeship, working at a vocational training provider. She then took advantage of the Law Society’s Diversity Access Scheme (DAS) which provided both LPC funding and work experience opportunities which led to her joining Browne Jacobson and subsequently qualifying as a lawyer.
All goes to show that with the right structures and support the law can be made accessible as a career to ambitious people who, for whatever reason, have missed out on the conventional entry path. Other firms should try it.
LEGAL COMMENT OF THE WEEK:
THE LLOYD V GOOGLE SUPREME COURT JUDGMENT
Cristina Crețu, Senior Privacy & Technology Consultant at MPR Partners SAYS
This week’s judgment in Lloyd versus Google LLC sets an interesting (and in our view correct) precedent regarding class actions for damages arising from infringements of the data protection rights. The most important takeaway in our view is that, in order for an action for damages to be successful, an interested party must prove that there is a contravention by a data controller of any of the requirements of the data protection legislation and that such contravention caused damages to that individual. Thus, for future reference, any similar action for damages should follow a two-stage procedure: (i) establishing whether the data controller was in breach of the data protection legislation and only afterwards (ii) claiming compensation.
“The second stage will require an opt-in mechanism to be observed, entailing on one side the need to obtain sufficient information from each individual to support their claim with regards to the loss suffered and to determine if the individual is eligible to be part of the group action and on the other side for the individual to opt in regarding such action. It is clear from today’s judgement that general damages cannot “be awarded on a uniform per capita basis to each member of the represented class without the need to prove any facts particular to that individual”, as Mr. Lloyd had requested. Whilst class actions suffered a setback today, if interested parties are willing to learn some lessons from this case, the future of actions related to compensation for data protection breaches in the UK does not have to be bleak.
Alexander Dittel, Partner at Wedlake Bell SAYS
The Supreme Court confirmed there is no automatic right to compensation without proof of cause. While an individual claim with such proof might have succeeded, litigation funders will be forced to rethink strategy for representative data protection litigation.
As framed, the claim was inconsistent with the compensatory principle. It is not possible to claim a uniform sum for each of the different types of iPhone users who might have been affected in very different ways.
The judgment will not stop vexatious claims for compensation for trivial breaches of data protection law which often cite Lloyd v Google as justification. However, the concept of “loss of control” will no longer serve as a sword. According to the Supreme Court, none of the requirements of the 1998 act are predicated on “control” over personal data by the data subject. So, while the case does not offer an absolute defence, it will come as a relief to many organisations and might provide ammunition to successfully fight vexatious claims, something that is currently reserved for the larger well-resourced organisations.
Big technology companies are not off the hook. This action is over but the growing privacy community is likely planning its next attack. The Supreme Court explained that the action could have been used to establish Google’s breach of the law which would then help individual claimants to seek specific damages.
Vikram Kumar, Principal, Cornerstone Research SAYS
According to the Supreme Court, claimants seeking to bring opt-out representative actions in privacy related matters in the UK may not seek compensation for intangible “loss of control” of personal data as a result of any breach of data protection laws. Instead, they must demonstrate clear evidence of material damage or distress.
The Court also notes that representative actions are not suitable for determining damages if individual assessment of damages is required. The judgment has made it harder for claimants to bring opt-out representative actions in privacy related matters in the UK. In a recent judgment (Merricks v Mastercard) the Supreme Court lowered the bar significantly for claimants bringing representative opt-out class actions in competition matters.
Caroline Harbord, Senior Associate at Forsters SAYS
Large data controllers will no doubt be taking a massive sigh of relief. The judgment narrows the scope for group claims arising from data breaches where no material damage has been caused by the breach. The court held that to sustain a claim under s.13 of the DPA, the relevant breach must have caused material financial damage or distress. A claim cannot be sustained simply because of the fact of the breach alone. Had the Supreme Court decided this point the other way, and allowed claims on the basis of the data breach alone, irrespective of damage caused, this would have potentially massively increased the exposure of data controllers to large scale group actions, where, for example, a data controller accidentally sends a communication to the wrong mailing list.
The practical effect of the judgment means the Supreme Court has deprived the affected class (who have had their data stolen and commercialised by Google) of an effective remedy for this wrong, and puts the English courts at odds with the judicial approach taken by the US, Canadian and Australian courts. While the Supreme Court held that it would have been open to Mr Lloyd to invite the court to decide the primary issue of liability in representative proceedings, with individual follow-on claims to assess damages, the Supreme Court acknowledged that this would not be a cost effective, and therefore viable, approach.
It is surprising that the Supreme Court overturned the Court of Appeal’s decision to grant the permission, given that the Competition Appeal Tribunal has the ability to allow large scale opt-out group claims to proceed, even where primary liability has not been established (see Le Patourel v BT). Had Mr Lloyd’s claim involved an element of anti-competitive behaviour on the part of Google, it is possible that the outcome would have been quite different. The judgment will also represent a major setback for other contemplated representative actions including the action against Oracle and Salesforce relating to the collection of data for ad-tracking via third-party cookies, which had been stayed pending the Supreme Court’s judgment. For these reasons, it is hard not to feel the Supreme Court has been unduly conservative in its approach, and shied away from an opportunity to impose a new check and balance on large scale data controllers.”
WATER POLLUTION: THE CHALLENGE
Peter McHugh, Partner, Clarke Willmott LLP
The Environmental Bill currently going through the House of Lords places a duty on government to publish a plan by September 2022 to reduce sewerage discharge from storm overflows.
Having failed to head off defeat last month, after peers voted overwhelmingly in favour of an amendment to the Environmental Bill, the government should also be placing a duty on water firms to stop dumping raw sewage into rivers and seas.
Last year the water sector dumped raw sewage into rivers and seas at least 400,000 times for a minimum of 3.1 million hours, according to figures submitted to the Environment Agency – though the actual figures are widely believed to be much higher.
The Surfers Against Sewage 2020 Water Quality Report points out that in 2019/2020, 6% of “swimmable days” were lost due to sewerage discharge into bathing waters in England &Wales. Further, Southern Water, a company who have been in the press as of late, failed to issue the majority of their sewerage spill notifications during the 2020 bathing season. The latest research shows that health risks posed to swimmers remain the same as they were in the 1990s.
As well as sewage, every year there are about 3,000 pollution incidents involving oil and fuels in England and Wales. Oil spillages affect water quality in a number of ways, including making drinking water unsafe to drink and destroying wildlife and the eco systems that sustain them. Oil spills also reduce oxygen supplies within the water environment.
We also continue to fail to address the issue of plastics. We know that long term use and exposure of plastics to high temperatures can lead to leaching of toxic chemical constituents into food, drink and water. Microplastics entering the human body via direct exposures through ingestion or inhalation can lead to an array of health impacts, including inflammation, genotoxicity linked to cancer and cardiovascular disease.
We have a raft of legislation designed to protect just England and Wales, each act and regulation has a role and a good intention to protect us, whether it is to regulate water quality or to prevent water pollution. Much of this is now covered by the Environmental Permitting Regulations, the intention being to regulate water and sewage industries. Other parts are to introduce a new framework for managing the many demands placed on the sea, improving marine conservation and opening up access for the public to the English coast.
With such a raft of legislation available to a relatively small area such as England and Wales, which is failing to enforce and stop water companies from routinely discharging raw sewerage into rivers, then what chance do the smaller poorer counties of the world have to protect their water supply? The Office for Environmental Protection is being asked to investigate why water companies had been able to continually fail to meet duties placed on them by law to treat sewerage.
Despite the legal framework, we need to stop the water companies discharging sewerage into rivers and coastal waters. The spills last year of 400,000 times, via a combined sewer overflow, lasted for 3.1million hours. Yet the overflows are supposed to be used only in extreme weather to relieve pressure in the sewerage system.
Let us hope the Environmental Bill going through the House of Lords at the moment is properly enforced and not just another piece of legislation for the water companies to find ways around.
THE PENSIONS REGULATOR ENFORCEMENT POLICIES CONSULTATION: FURTHER CLARITY FOR EMPLOYERS AND TRUSTEES explains Rhiannon Barnsley, Associate, Arc Pensions Law
The introduction of The Pension Schemes Act 2021 has prompted much debate about the Pensions Regulator’s (TPR) new powers to issue criminal proceedings and hefty fines of up to £1m for certain conduct relating to defined benefit schemes. Many in the industry have been concerned about how these powers will be used and, in particular, what route TPR will take when it has more than one enforcement option available.
The consultation notes that TPR may use a combination of measures, including statutory notices, financial penalties and criminal proceedings.Statutory notices will aim to secure an action, outcome or remedy, while fines and criminal proceedings are to punish more serious behavior.
One thing that is clear from the consultation is that criminal proceedings will generally be issued instead of statutory notices or financial penalties if there are aggravating factors such as previous breaches or dishonesty or for serious cases of deliberate and wilful conduct. This draft policy will be reassuring to those concerned that criminal proceedings were going to be issued too readily.
The consultation also sets out TPR’s policy on financial penalties. In short, TPR will look at two things, (i) the “culpability” of those involved and (ii) the level of harm to the scheme and saver outcomes. If culpability and harm to the scheme are both judged to be low, fines are unlikely to exceed £400,000. However, if there is high harm and high culpability, in the most serious cases, TPR may issues fines of up to £1m.
It’s important to note that these policies have not yet been finalised and are currently in draft form. The consultation will be open until 22 December. Feedback will be considered before the final policy is published in early 2022.
APPOINTMENTS OF THE WEEK
Antonio Acuña, a former government advisor and one of the country’s leading data specialists, is joining Kennedys in a specially created role to harmonise reporting analytics and insight, skills and literacy, governance, curation and asset management, engineering, innovation, and product development. So quite a job!
Acuña led the landmark launch of data.gov.uk, the first website dedicated to helping people find and use open government data, which was widely recognised as the benchmark for data portals worldwide. He also designed and delivered Defra’s award-winning ‘Noise Mapping England’ project, which used interactive maps to show the impact from road and rail networks in a bid to tackle noise pollution.
“I am passionate about change, particularly when it’s driven by data, and I believe Kennedys has a unique opportunity to transform the way legal services are delivered,” said Acuña. “It’s a competitive industry and it’s not enough to simply modify or adapt anymore. Businesses must be bold, to reimagine and embrace new ways of working, and Kennedys is doing just that. I’m really excited to be joining now and being a part of that culture change, which I know will deliver huge benefits to everyone.”
Andrew Leaitherland, the former Chief Executive Officer at DWF has been appointed as a strategic advisor to Horwich Farrelly, legal advisers to the insurance and commercial sectors.
Having been Managing Partner and then CEO of DWF Leaitherland transformed the firm from a modest outfit based in the North West of England firm into a 4,300-strong international firm with offices in 33 locations around the world. DWF Group plc was floated on the main market of the London Stock Exchange in March 2019.
Commenting on the appointment Horwich Farrelly CEO and Managing Partner, Ronan McCann said, “Even without the current crisis, the legal market is changing faster than ever with increasing pressures on improving efficiencies without compromising quality. Andrew was hugely successful at growing DWF from a £29m turnover business to over £330m and its that experience which we are very interested on as we enter our own growth phase. We are looking forward to working with him on our own ambitious plans.”
Building Better Borrowers – Bankruptcy-Remote Basics In our next installment available on Wednesday, November 17th. Financial Restructuring special counsel Kathryn Borgeson will discuss three of the most important building blocks for a bankruptcy-remote borrower:
Special Purpose Provisions
The Bad Acts Guaranty
In Case You Missed It!Global Litigation partner Ellen Holloman presents a podcast, “Court Impact on Securitization,” which discusses two of the most interesting lawsuits impacting the securitization industry today, relating to the National Collegiate Student Loan Trusts.Subscribe to our podcast series on Spotify to never miss an episode. Listen
CMS’s Talking to #LeadHers podcast now available
The Talking to #LeadHers series features members of the CMS equIP start-up accelerator programme and showcases the work of inspirational female founders – providing an in-depth view of the entrepreneurial journey and the developments taking place across their industries.
In the latest episode CMS partner Katie Nagy de Nagybaczon is joined by Rosie Wainwright, Regional Manager at UK-wide social mobility charity Career Ready, who shares her experience of mentoring and discusses how mentoring programmes transform the lives of young adults and make a lasting difference in their communities. This episode also incorporates insights and advice from previous podcast guests, including CMS equIP founders and women in leadership roles. The episode is available here and on all the usual podcast platforms.
This episode complements the recently launched Career Ready mentoring programme at CMS, in which everyone at CMS (including CMS fee-earners, business support, trainees and partners) is being encouraged to sign up as a mentor. Career Ready has a network of over 3,300 volunteers across the UK and those interested in signing up as a mentor can get involved via their website: https://careerready.org.uk/volunteers/
CMS has a long-established relationship with Career Ready and the firm has run masterclasses and skills webinars for the young people on their programme over a number of years.
The LEGAL DIARY will be back next week…
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Have a good week-end!