Edward Fennell’s Legal Diary – Edition 94
Friday 25 February 2022
Diary news, commentary, insights, appointments and arts from the legal world
SHORT THOUGHT FOR THE WEEK:
ARE RUSSIAN OFFICES NOW OVER AND OUT?
Overnight the management of large international law firms headquartered in London has become decisively more difficult. The invasion of Ukraine by Putin’s armed forces has meant that almost any kind of business with Russian entities could become highly problematic. Yet any law firm worth its salt these days has a substantial Moscow office and Russian practice.
Over recent years local lawyers have replaced the Brits and Americans and Australians who used to occupy the key roles. But the overall direction and strategy must be overseen from the West.
Look, for example, at the position of Bruce Dear who has just been elected Chair of Eversheds Sutherland and takes over on 1 May. On the firm’s website this is how its Russian operation is described. “Addressing legal issues in Russia is often made more difficult by clichés: stereotypes about the way things are done in Russia, overly legalistic advice and an outmoded conception of what a lawyer’s role should be. At Eversheds Sutherland, we reject those clichés entirely. Instead, we apply global best practice in a Russian context; we make practical and commercially-sensitive advice; and, we act as a trusted advisor to business.”
So will life now go on as normal for Eversheds – ‘applying best practice in a Russian context’ – and the many other Western firms which have done well out of Russian business? And how will London and New York-based Chairs and Managing Partners square the variety of pressures they will now face?
The LegalDiarist
In this week’s edition
+ LEGAL DIARY OF THE WEEK
– Cryptic Lawyers
– Hogan Lovells: Moving but not Uprooting
– Domestic Violence Case Workers to Qualify as Solicitors
– Divorce Show Says It’s Not Just about Lawyers
+ UKRAINE SPECIAL REPORT: WHAT THE LAWYERS ARE SAYING
+ CONTRIBUTED ARTICLE OF THE WEEK How HMRC has ‘Gone Digital’ with Seizure Orders by Andrew Park
+ LEGAL COMMENT OF THE WEEK How cutting corners on building sites continues to cost lives by Lee Hart
+ APPOINTMENTS OF THE WEEK at Harneys and Ropes & Gray
LEGAL DIARY OF THE WEEK
Cryptic Lawyers
Well, someone had to be the first. The announcement that radical outfit gunnercooke is to be the first major British law firm to accept payment for legal and professional services in cryptoassets – such as ether and bitcoin – is perhaps not a great surprise. What might stop one, however, is that the timing is not so good – bitcoin has just dropped in value by more than 10% following events in the Ukraine. It just shows, maybe, that dealing in crypto-currencies is still risky business.
However, in fairness to the firm, it has got quite a lot of skin in the game. Its FinTech and Cryptoasset full-service practice has built up a client base of around 100 cryptocurrency developers, platforms and exchanges. So maybe it has to demonstrate moral support for its clients.
“It’s vital that we accept payment in this way for our substantial client base, which spans the entire blockchain and cryptoasset ecosystem.” said Financial Services & FinTech Partner James Burnie. “Accepting payment in cryptoassets demonstrates our commitment to and understanding of this important and growing community.
“Over the next decade I expect to see a gradual transition towards cryptocurrency becoming increasingly accepted as a means of payment generally.”
Naseer Patel, Finance Director agreed.“Up to now, only a few US law firms allow for cryptoasset payments so we are proud to be at the forefront of innovation in the UK,” he said. “We will now be able to work with a wider variety of clients across different jurisdictions, plus offer our partners the flexibility to be paid securely in the way they choose.”
Hogan Lovells: Moving but not Uprooting
Roots count for Hogan Lovells so even though it has announced an important office move it will still be to a location within a stone’s throw of its current base in Atlantic House on Holborn Viaduct.
Atlantic House has, of course, been something of a marmite building – some loved it (including the LegalDiarist) but it certainly had its critics. Anyway, it’s time is now almost up as last week thefirm signed an agreement to create a new ‘266,000 square foot sustainable working environment’ immediately across the road. Work will start in the summer of this year ahead of occupancy towards the end of 2026.
“Our London office is of considerable strategic importance to the firm and our clients,” said Penny Angell, UK Managing Partner. “Having occupied the Atlantic House building since 2001, we are excited at the opportunity to redefine how our space can best support our business and create something bespoke, while staying true to our values, heritage and 40+ year history in Holborn Viaduct.
In line with the firm’s global sustainability plan and commitment to being a ‘responsible business’, the new office will have very high sustainability credentials targeting BREEAM Outstanding and WELL certifications, with green spaces, energy and efficiency embedded within the design. David Crew, Head of Corporate Real Estate at Hogan Lovells added that the new office would “Support our responsible business commitments to the environment that include RE100, Race to Zero and our SBTi pledge to be net zero by 2030.”
Should see them through to 2050 with any luck.
Domestic Violence Case Workers Get Chance to Qualify as Solicitors
The latest news on the Legal Apprenticeship front demonstrates that the scheme’s momentum is continuing to grow. The National Centre for Domestic Violence has announced this week that it is launching a programme which will offer solicitor apprenticeships to legally trained staff in their casework teams in conjunction with the University of Law.
Most of the organisation’s case-workers already have a law degree and their work, primarily funded via legal aid, is supervised within NCDV by qualified solicitors. However, until the recent reforms they could not gain access to professional qualifications. Now, however, they will be able to do so with the SRA-approved scheme enabling them to complete training and qualification without incurring massive debts.
“Our new legal apprenticeship scheme is a triple win.” explains NCDV’s Head of Legal and Barrister, Cheryl Thornley. “First, it is a win for NCDV’s clients, those many thousands of victims and survivors of domestic abuse in England, who will get even better service and team continuity. Previously, some of our most talented case-workers had to leave us after a few months simply to be able to take their next professional career step.
“Second, it’s a huge gain for all those who have law degrees and who want to go into the law but find they cannot do so due to prohibitive training costs and training contract uncertainties. Through employment in NCDV’s case-work teams they can now realise their professional goals quickly while doing vitally important paid work.
“Third, the legal profession and society as a whole will benefit from the much more broadly based and diverse intake that professional apprenticeship schemes of this nature will stimulate.”
The first two case-workers to undertake the scheme will start this month. “It may well lead not merely to greater operational efficiencies but to an overall increase in the numbers of our case-workers who will then be able to help even more victims and survivors,” said Thornley. “For us, and for survivors of abuse who access our service, it will be a real game-changer.”
Divorce Show Says It’s Not Just about Lawyers
Given the ‘popularity’ of divorce it is surprising that the Divorce Show has not been a regular part of the family law calendar for many years. Instead, only the second ever ‘Divorce Show’ was held over two days this week at Hilton London Olympia.
Devised by Smith O’Connor – himself apparently a serial divorcee – its purpose is to help divorcing couples to ‘transition out of their marriages, focusing always on keeping things amicable for the sake of the children’.
It was striking that of the fourteen speakers on the first day only one was a man – and he was talking about co-parenting after divorce. Day two was slightly more balanced but still overwhelmingly female (which probably tells us quite a lot amount the gender dynamics of divorce).
Lawyers naturally had a big part to play in the presentations. For example, Naheed Taj of Child & Child spoke about ‘Finding Love After Divorce’ and Fiona Lyon and Sarah Hughes of Anthony Gold Law explained ‘How to Divorce Online and Other Ways to Save Legal Costs’. “
Meanwhile the family team at Fletcher Day said that they had been delighted to be able to take part in the event as a way of helping people ‘understand the divorce process and to work out which organisations will be best placed to guide them.’ Emma Nash, who co-ordinated the firm’s presence, commented that, “While the majority of people will need a solicitor to guide them through the process, many individuals, couples and their children will benefit from the support of other professionals such as counsellors, coaches and mediators. There are also charities who are able to provide support and advice. While making the decision to divorce is often a stressful one, it can have many positive outcomes enabling individuals to take back control and move on with their lives. ”
So, better luck next time.
UKRAINE SPECIAL REPORT: WHAT THE LAWYERS ARE SAYING
Stacy Keen a sanctions expert at Pinsent Masons
“The initial slow pace of sanctions is going to accelerate. Businesses should urgently be identifying not just Russian and Ukrainian business partners but also non-Russian / Ukrainian counterparties that have a significant exposure to these countries.”
“We all hope this crisis gets solved quickly but in the meantime, businesses need a contingency and real time plan for long term sanctions.”
Nicholas Rostow, professor of law at Cornell Law School, and previously general counsel and senior policy adviser to the U.S. and on the National Security Council for Presidents Ronald Reagan and George H.W. Bush.
“Putin’s claims that the USSR created Ukraine are belied by history and, in any event, do not alter the fact that Ukraine is an independent state and a member of the United Nations.
“It ought to be absurd that Putin can repeat the arguments Adolf Hitler made for invading Czechoslovakia. Russia has manufactured the separatism in Ukraine. Whatever real grievances Russian speakers may have against the government of Ukraine do not provide a legal justification for Russia to absorb an independent country into itself.
“Too many times, aggression unmet has been aggression rewarded. Too many times, aggression unmet has led to greater aggression and greater war. Nuclear weapons make that prospect horrific to contemplate. At the same time, we cannot allow possession of nuclear weapons to provide cover for aggression by conventional arms.”
Dr Aurel Sari, Director of the University of Exeter’s Centre for International Law and Fellow of the Supreme Headquarters Allied Powers Europe and Allied Rapid Reaction Corps
“By invading Ukraine, Russia has committed a serious and grave breach of the prohibition to use armed force against another State, as set out in Article 2(4) of the United Nations Charter.
“It is important to recognize that international law remains relevant in dealing with Russia’s aggression. Since the Russian intervention amounts to an ‘armed attack’ within the meaning of the United Nations Charter, Ukraine is entitled to use whatever armed force is necessary and proportionate to bring the Russian invasion and any resulting occupation to an end. Pursuant to the right of collective self-defence, Ukraine may also invite other States, including the United Kingdom, to provide it with military assistance. Without such an invitation, third States may not take measures against Russia that would themselves involve the use of force. However, they may adopt a wide range of non-forcible measures, ranging from unfriendly acts (such as adopting economic sanctions or limiting diplomatic relations) to countermeasures (which involve acts that are otherwise unlawful under international law). Third States are also under an obligation not to recognize any attempt by Russia to unlawfully annex further parts of Ukraine.
“For its part, Russia is under an obligation to cease its unlawful actions and to restore Ukraine’s political independence and territorial integrity in full. While the combat activities last, Russia is also bound to observe the law of armed conflict, which amongst other things require Russian forces to distinguish strictly between military objectives and civilian persons and objects.”
CONTRIBUTED ARTICLE OF THE WEEK
How HMRC has ‘Gone Digital’ with Seizure Orders
by Andrew Park
News that HMRC has just seized its first non-fungible tokens (“NFTs”) from suspected tax fraudsters is no surprise. It marks the convergence of two of HMRC’s biggest objectives of the last five years:
- to acquire and use civil powers to seize the proceeds of tax evasion
and
2. to trace UK-resident holders of crypto assets and ensure there is no safe haven for tax evaders in cyberspace.
Effective January 2018, HMRC acquired with a handful of other government agencies the civil power under the Criminal Finances Act 2017 to apply to the UK High Court for Unexplained Wealth Orders. These enable seizure of “recoverable property” where there are reasonable grounds to suspect serious crime such as tax evasion and the acquisition of the assets cannot be adequately explained and evidenced. These need not be pursuant to a successful criminal prosecution and rely only on the civil burden of proof.
Initially aimed at international individuals involved in laundering the proceeds of overseas corruption through the UK, the scope is wide enough to catch people who have made fortunes buying and selling cryptoassets like NFTs and Bitcoin but who have ignored the UK tax consequences and may have declared little else.
Meanwhile, also beginning in 2018, HMRC joined forces with the US Internal Revenue Service and counterparts in Australia, Canada and Holland to launch the Joint Chiefs of Global Tax Enforcement (“J5”). Their top initial concern was crypto – namely difficulties tracing holdings of cryptoassets, their use by criminals and the relative invisibility of taxable crypto transactions. Since then, HMRC and its partners in the J5 Cyber Tax Crime unit have served bulk information notices on crypto exchanges, compiled databases of larger transactions and have steadily started opening investigations. One investigation is even said to involve a global financial institution and its intermediaries.
This is just the start. For an HMRC looking for more “low hanging fruit” after cleaning up traditional offshore investment accounts, crypto is shaping up to be the next big thing.
Andrew Park, is a Tax Investigations Partner at Andersen in the UK
LEGAL COMMENT OF THE WEEK
TOPIC: A new study by construction site storage experts at SiteStak shows that despite improved health and safety awareness, there are still too many accidents resulting in serious injury or death.
COMMENT BY: Lee Hart of Clarke Willmott, an accredited senior litigator and brain injury specialist within the Association of Personal Injury Lawyers
“News that the number of construction-related injuries in the UK is on a slow overall decline is welcome news, but employers and contractors are still cutting corners and endangering lives, according to personal injury specialist Lee Hart.
“The new study, using published data from the Health and Safety Executive, shows injuries and ill health to workers is costing the UK construction industry approximately £1.29bn a year, with male construction workers seven times more likely to be injured.
“Not only is this a staggering cost financially to industry but it is devastating to those seriously injured and the families of those killed,” said Lee, a member of Clarke Willmott’s accredited personal injury team, who specialise in catastrophic injury and fatal accident claims.
“The report acknowledges that huge strides have been made to safety on construction sites over the last decade with non-fatal injuries in UK construction having decreased by 45.56%, but there are still too many accidents and more can be done.
“Despite improved health and safety awareness, employers and contractors are still cutting corners, often to save costs, and are endangering life and limb. We are still seeing plenty of cases where an employer’s negligence and breach of statutory duty has shattered lives.”
APPOINTMENTS OF THE WEEK
HARNEYS
Rachel Graham has been appointed as managing partner of the London office of Harneys (first opened in 2002). She succeeds Phillip Kite who has returned to the BVI to continue his practice.
Graham has been practising law for the past 25 years including 17 ‘offshore’. She joined Harneys in 2007 and has been heading the firm’s BVI Corporate Transactional practice in the EMEA region advising corporations, high net worth individuals, entrepreneurs, financial institutions, seed capital investors, private equity funds and their advisers.
“Rachel is an accomplished lawyer and has contributed greatly to our success within the EMEA market,” said Ross Munro, Harneys’ Global Managing Partner. “She is well positioned to continue to deliver our London strategy and we are delighted that she has agreed to take on this position. I have no doubt that our success in London will continue under her leadership.”
ROPES & GRAY
Annie Herdman has joined the Ropes & Gray office in London as a partner in the firm’s European antitrust team. Herdman specialises in advising a wide range of corporate, sovereign wealth, and private equity clients on EU, UK and multi-jurisdictional merger control and foreign investment strategy and filings. Additionally, she has experience advising clients on EU and UK cartel investigations, behavioural issues, and compliance matters.
Herdman has been recognised by The Legal 500 as a ‘Next Generation Partner’ and a ‘Rising Star’ and Who’s Who Legal as a ‘Leader’, where she was noted as one of only four UK practitioners for her great ‘capacity to quickly understand the client’s business and form credible views’. Additionally, she has featured in Management Today’s 35 Women Under 35, which celebrates the top 35 female business talent in the UK under the age of 35.
“Annie’s arrival represents the continuation of the growth that we’ve seen over the last six years,” said Ruchit Patel, head of European antitrust at Ropes & Gray.
E-VENTS
PINSENT MASONS
Free movement of goods – the IP, competition and Brexit related considerations
10 March 2022 12:00 – 13:00 GMT Webinar
| There are IP rights, competition and regulatory constraints that affect the movement of goods between the UK and the EU and between the UK and the rest of the world. In this webinar, we’ll talk you through the practical and commercial implications of those restrictions, particularly post Brexit. We will also look at what the future holds for the UK’s parallel imports regime now that the Government’s post-Brexit consultation on this issue has concluded and in preparation for the introduction of the UK Vertical Agreements Block Exemption Order. If you know someone else who would like to attend, please forward this invite and ask them to register here. |
| Free movement of goods – the IP, competition and Brexit related considerations10 March 202212:00 – 13:00 GMTWebinar |
| Accept Decline |
| Speakers Emily Swithenbank, Senior Associate, Pinsent Masons Robert Vidal, Partner, Pinsent Masons |
| For further information please contact: Liz Ekpiken Events Executive+44 20 7667 0101 liz.ekpiken@pinsentmasons.com |