Edward Fennell’s Legal Diary – Edition 49

Friday 12 March 2021 Edition 49

Diary news, commentary, insights, appointments and arts from the legal world

SHORT THOUGHT FOR THE WEEK

HOLD THE FRONT PAGE (Sorry, we’ve had to delete it)

You may be bored to the back teeth by the Sussexit controversy but its ramifications are likely to be with us for a long time. The end of the monarchy, the collapse of the Commonwealth and the resurrection of Piers Morgan might all lie ahead. But what is already clear is that the tabloid press is going to have to be a tad more circumspect in how it handles celebrity stories following the instruction to The Mail to give the Duchess of Sussex a front page apology.

As Steven Heffer, Head of Media and Privacy at Collyer Bristow LLP, has commented, “Front page apologies are a very rare thing. In this case the Judge has ordered notice of his decision to be published on the front page, but it follows on from the Judge’s finding of breach of copyright and misuse of very private information. The case was so strong that a trial was not necessary on the main issues and summary judgment was given. The Duchess has won hands down. I see little prospect of appeal doing anything but increasing the already enormous costs.”

The Duchess might have won ‘Hands Down’ but for other people it’s now ‘Hands Up’ time.

“This is a hard and costly lesson for the Mail,” continued Heffer. “It appears that there are only side issues left to be decided, such as whether there was any joint authorship of the letter to her father.”

Mind you, regarding ‘misuse of very private information’, one wonders whether that might cover some of the revelations from Monday’s broadcast.

The LegalDiarist

In this week’s edition

+ LEGAL DIARY OF THE WEEK

– STOP PRESS – THIS MORNING ON MYANMAR

– No Fraudulent Statement at PCB Byrne

– Pity the Poor Lawyer

– Family Funding

– Pet Grievance

– Security Check

+ LEGAL PRACTICE ISSUE OF THE WEEK

How life platforms are helping probate specialists

+ LEGAL ISSUE OF THE WEEK

Should the Silentnight anti-avoidance case settlement be a concern to lenders?

+ APPOINTMENTS OF THE WEEK

THE LEGAL DIARY OF THE WEEK

STOP PRESS – THIS MORNING FOR MYANMAR

“The Republic of the Union of Myanmar has publicly announced that it has instructed Volterra Fietta to advise on and pursue international legal proceedings against the illegitimate military regime that is responsible for the violent armed aggression directed against the people of Myanmar and their legitimate democratic representatives.” 

As announced by what is said to be Myanmar’s sole legitimate representative, the Committee Representing Pyidaungsu Hluttaw (the “CRPH”), Volterra Fietta will support Myanmar to hold to account the perpetrators of these flagrant international laws violations before all relevant fora.

The CRPH’s recent announcement stated: “[…] Myanmar, through the CRPH, has formally engaged the leading public international law firm Volterra Fietta to advise on and pursue international legal proceedings against the unconstitutional and illegitimate military regime responsible for the violent armed aggression directed against the people of Myanmar and their legitimate democratic representatives from 1 February 2021.  Such international law proceedings will take time but we will pursue them vigorously and steadfastly, so as to hold to account the perpetrators of these widespread and systematic human rights violations, including soldiers, police and common criminals.  We are gathering large volumes of evidence for use in such proceedings.  Myanmar’s legal team is led by Robert Volterra, one of the world’s most respected public international law specialists, and Álvaro Nistal, who has advised numerous States and victims in relation to human rights violations.  Volterra Fietta will support Myanmar’s efforts using the largest team of public international law experts in any firm in the world.  They advise and represent States from every continent, in proceedings before the International Court of Justice, the International Criminal Court and other international courts and tribunals.”

NOTE: Volterra Fietta’s founding partner is Robert Volterra, first and only non-UK barrister on the UK Attorney General public international law panel A-list, Visiting Professor of International Law at UCL and Visiting Senior Lecturer at King’s College, London, and who has helped draft the founding treaties of a number of international bodies.

No Fraudulent Statement

For once the PR statement this morning about the creation of a new firm via a merger was not overhyped.“ Byrne and Partners and PCB Litigation have today announced that they will be merging on 1 April 2021, bringing together two like-minded, dynamic market leaders in fraud litigation to form a new top-tier firm specialising in all forms of dispute resolution – PCB Byrne.”

It’s true. The LegalDiarist has known both firms for many years and has always been impressed by their quality. Plus, as the statement went on to say, “The firm is also scaling up its work across Asia, the Middle East, Russia and the CIS, enhancing the firm’s presence in these key markets.” This all makes good sense. PCB Byrne should do very well. Mind you a big credit must go to Steven Philippsohn, now with Asserson, who was the original brain behind PCB. At times like these it’s important to remember the debt owed by today’s partners to yesterday’s founders.

Pity the Poor Lawyer

What’s wrong with our stingy UK corporates? Why do they only spend half of what their American cousins do on legal advice? Don’t they realise that London law firm partners have increasingly expensive second homes, school fees and (now impending) Caribbean holidays to pay for?

Apparently not. According to the latest research from Thomson Reuters in its ‘ 2021 State of Corporate Law Departments’ report.UK corporates last year spent just 0.18% of their annual revenue on in-house and external legal services. By contrast US corporates wrote cheques amounting to 0.32% of revenue. (Mind you, across the Channel they were even meaner than the Brits.German companies spent just 0.13% while the French, predictably, came in with just 0.11% – no doubt with President Macron arguing that legal advice doesn’t work for the over-65s).

The irony of this is that lawyers are working harder than ever with the report showing that 58% of corporate law departments experienced a surge in workload as a result of the pandemic. Yet only 6% experienced an increase in their total legal budget to deal with this influx of work and 29% said that their budget had been cut. Moreover those cuts are likely to be exacerbated by big drops in corporate turn-over as the virus continues to bite into the respective economies.

But there is going to be no drop off in work load. In fact judged purely on volume of work lawyers are facing a boom due to the disputes which are predicted to surface as Covid levels gradually drop. How to pay for all this, however, will be the big question. So squaring that vicious circle is going to have to rely on technology. Around 30% of law departments globally are increasing their spend on technology, compared with only 11% decreasing spend. Meanwhile 44% of departments are increasing their use of technology tools compared with just 2% decreasing. As with most of our other problems the answer needs to be technical.

Family Funding

Third party funding is now well-established for corporates but at the family level it is still in its infancy (or barely that). That is why Ampla Finance has just launched what they claim is a ‘first’ in publishing a guide to legal funding for family solicitors.

“We’re pleased to provide what we are sure will be a useful tool for family lawyers and their compliance teams,” said author of the report, Nigel Shepherd. “I know from my many years as a practitioner that when it comes to discussing the funding options with clients it can be difficult to provide the information and help clients’ needs, whilst at the same time remaining in step with regulatory obligations. This guidance flags up the key issues and through practical examples helps practitioners to develop a consistent and client-focused approach.”

Whilst the volume of guidance around litigation funding at consumer level is significant, this seems not to be the case with ‘profession-facing’ advice.. “As such, we believe there is a real gap in the market for clear advice for lawyers, which we hope to fill with this guidance,” said Louise Hall, Ampla’s Commercial Director

The guide will be made available to all family law practitioners and their compliance teams while more detailed advice from barrister Mr Popplewell at Gough Square Chambers will be provided to Ampla Finance partner firms.

To download a copy of the guide, click here.

Pet Grievance

Now here’s a perfect storm brewing. During the C-crisis lots more people have bought pets (you can see them walking them in the park every day). But the chances are that because of the C-crisis there’s also going to be a lot more domestic break-ups a soon as the lockdown comes off (and people can get to see their lawyers). So what happens to those pets?

This is the problem exercising Hannah Gumbrill-Ward, Solicitor, Winckworth Sherwood. “Can you get a custody agreement to regulate the time you and your ex each get to spend with your pet?” she asks. “And is there anything you can do to protect yourself against a dispute about your pet? No matter how much you consider that your pet is like a child, unfortunately its welfare needs are unlikely to be taken into consideration and there is no court-ordered pet equivalent of a child arrangements order, the English version of a child custody agreement.”

So this is a genuine problem. “Research undertaken by a pet insurance provider in 2019 found that 25% of divorce cases between 2018 and 2019 involved issues around the family pet. With pet ownership having sky-rocketed during the pandemic, it is logical to assume that pet issues will only become more prevalent within divorce and financial proceedings going forward. With 88% of people saying they would prioritise their pet over access to their ex’s pension funds, perhaps it is time to revisit the legal status of pets?”

The answer is seems is a pet pre-nup. “There has been a 24% increase in the number of requests family lawyers are receiving to draw up ‘pet nups’ for their animal loving clients. It is not just lawyers who would encourage couples to give as much thought to the protection of their pets as they would their other assets. The charity Blue Cross has created a downloadable pet nup to help couples plan for their pets’ futures and hopefully prevent the number of pets given to re-homing centres.”

‘Woof, woof!’ Or maybe ‘Miaoh!” [You take one, I’ll take the other? Sorry, just started a cat fight]

Security Check

This Legal Diary is the antidote to celebrity gossip but if you need to wean yourself off an unhealthy diet of Sussexiting then a good dose of Dechert’s 2020 Developments in U.S. Securities Fraud Class Actions Against Non-U.S. Issuers will see you right.

It certainly makes sobering reading. During the global pandemic it has become clear that a listed company does not need to be based in the U.S. to face potential securities class action liability in the U.S. courts. Indeed, maybe because of the pandemic the majority of the suits are linked to the biotechnology and medical equipment fields with a significant number based on allegations relating to the non-U.S. issuer’s approval by or compliance with U.S. regulatory agencies.

In particular several of the lawsuits alleged that defendants misrepresented their prospects of approval by the FDA. In Kevin Alperstein, et al. v. Sona Nanotech Inc. the plaintiffs alleged that the defendant, a Canadian medical supplier, made positive press statements about its COVID-19 rapid detection antigen test, which proved to be unfounded. So the key piece of advice offered by Dechert to non-U.S. issuers is that they should be particularly carefully when making disclosures or statements to ‘speak truthfully’. Who would have guessed?

Book of Knowledge

And finally, when you seriously need distraction, reach for a copy of MAKING KNOWLEDGE WORK, a fascinating report from consultancy iManage on trends in knowledge management. Lawyers are very much part of this story but the report is excellent for stimulating thought for the future.“Really understanding how to make knowledge work achieve its highest and best use within organisations is a perspective shift that goes beyond enabling simple knowledge management. It requires putting into place an ecosystem for knowledge activation,” said Neil Araujo, CEO iManage.  “Organisations must have a breadth of capabilities at work that include collaboration, secure storage and retrieval, ability to work from anywhere, and capacity to curate and repurpose institutional knowledge – all delivered though a high-performance, reliable cloud service.  This empowers knowledge workers to create opportunities for unencumbered thinking, higher level productivity, and creativity that drives innovation and spurs new business opportunities.” Wow! Impressive stuff. ‘Unencumbered thinking’ is probably something we all need now.

MAKING KNOWLEDGE WORK is available to download here.

LEGAL PRACTICE ISSUE OF THE WEEK

How ‘life platforms’ are helping probate specialists.

Probate specialists often face difficulties when trying to find financial accounts tied to an estate. With a lack of hard copy, heightened account security and an excess of finance providers, it’s becoming increasingly difficult to track client’s assets. Is there an answer?

Ian Dibb, the founder of life planning platform, Once I’ve Gone believes that there is

One of the biggest struggles for probate specialists is retrieving and compiling information tied to a client’s estate after he or she has died. In fact, professionals report that in the past year, they struggled or even failed to locate a client’s assets in nearly a quarter of their cases. This is largely due to the increase in online banking meaning fewer physical cards and the introduction of facial or fingerprint recognition.

We need to be keeping up with these developments and finding innovative ways to ensure assets aren’t lost. One way to mitigate the potential difficulty or even loss of assets would be to encourage clients to utilise tools such as life-planning platforms. This new ‘tech’ encourages users to organise their estate by storing all their information in one place. One such platform is Once I’ve Gone which collates and protects all necessary information in three ways: document storage, messages and final wishes. 

The platform has been a huge success with relieving planning stresses for users, but there has been the same response from probate professionals. The current estimated figure for unclaimed assets in the UK is around £70bn, which is a huge hit for the probate industry. Professionals with an interest in probate have found huge benefits in partnering with platforms such as Once I’ve Gone and have made inroads with improving this figure. 

Dealing with more organised client estates would be a step in the right direction. Having all the policies, accounts and other assets in one place, and upfront, streamlines the process and allows specialists to do their job more thoroughly. It enables them to provide a quicker service, whilst also taking the stress off the grieving families’ shoulders. The hope is that these platforms offer a viable solution to this growing problem that probate specialists are facing. By encouraging clients to keep their estates organised and offering the tools to do so, there are huge benefits for both the industry and customer peace of mind.

LEGAL ISSUE OF THE WEEK

Should the Silentnight anti-avoidance case settlement be a concern to lenders?

Earlier this month the Pensions Regulator (TPR) agreed a settlement in an anti-avoidance case against the current owners of the bed manufacturer Silentnight.

TPR alleged that HIG Group, a US private equity group, deliberately brought about the unnecessary insolvency of the original Silentnight Group in order to buy its business out of administration but leaving its defined benefit pension scheme behind. HIG has now paid £25 million to the scheme. But what are the wider implications of the case? ask Kate Payne and Danyal Enver of Arc Pensions Law LLP

The Pensions Regulator has issued an ‘s89 intervention report’ in relation to the Silentnight Group Defined Benefit Scheme, detailing the £25 million settlement it has reached with American private equity firm, HIG. It is a case which will make lenders and investors take notice of the Regulator’s powers and consider whether they may be within the scope of enforcement action themselves.

The Regulator had sought to use its “moral hazard” anti-avoidance measures against HIG, accusing it of deliberately putting Silentnight (the scheme employer) into an “unnecessary insolvency”. It claimed HIG used the control it had available via lending facilities to do this. The report states HIG wanted to buy back Silentnight during administration, leaving the scheme behind, without funding and thereby force it to fall into the Pension Protection Fund (PPF).

The Regulator’s case involved expert testimony and forecasts to demonstrate both HIG’s control and also Silentnight’s likely post 2010 performance in the event that HIG had not had that control. Through this it aimed to show that Silentnight could and would have refinanced, continued to trade profitably and funded the scheme, but for HIG’s involvement.

The settlement amount is not enough to keep the scheme from entering the PPF (even with an additional £10m recovered for the scheme from the insolvency process). While this shows the Regulator may negotiate settlements to achieve certainty for scheme members, it is primarily an example of the Regulator showing its teeth against several “well resourced” targets including successfully defending a judicial review.

The Regulator may continue to take this wider view of who could be a target of its powers as it looked to extend the concept of who is ‘connected and associated’ – and this could be a matter of concern to lenders. It could also be a taste of things to come now that it has wider powers under the Pension Schemes Act 2021.

Kate Payne is a Partner and Danyal Enver an Associate with Arc Pensions Law LLP

LEGAL APPOINTMENTS OF THE WEEK

CHARLOTTE SYMES and MARIKO WILSON appointed Directors at Family Law in Partnership

Family Law in Partnership (“FliP”), the central London, multi-professional specialist family law practice, has announced that Charlotte Symes and Mariko Wilson have been appointed as directors of FLiP with effect from 1 April 2021. Charlotte and Mariko were previously Senior Associates at FLiP.

Charlotte Symes deals with complex financial issues arising from divorce and separation including those relating to businesses, investments, tax and pensions. Her work has a strong international dimension, with a particular focus on French matters as she is a fluent French speaker. She is a trained mediator and collaborative practitioner, drawing on these skills to deliver a variety of process options for her clients.

Charlotte is recommended in The Legal 500 UK 2021 and was named as a Rising Star in The Spear’s 500 Index of leading family lawyers.

Mariko Wilson handles all aspects of private family law and has a broad range of experience, frequently acting for high-net-worth individuals in financial relief and divorce proceedings as well as acting in children matters. She has a particular expertise in cases involving complex pensions and tax issues. She has recently been appointed to the Pensions Tax and Financial Remedies Committee of Resolution and has been named as a Rising Star in The Spear’s 500 Index of leading family lawyers and in The Legal 500 UK 2021.

See more at website at www.flip.co.uk

WEBINARS, BLOGS AND THE REST OF THE WEEK

🎉  Thank you to our fantastic listeners for over 2000 downloads! Our latest episode, which is out now, looks at an area of the law that often has a big impact on children’s lives, their families & how they grow up.   We speak to family lawyer Charlotte Bradley about what happens when families split up When parents decide to split up, whether they are married or not, it is often a really difficult time and a very upsetting and confusing situation for children – especially so as adults are usually the ones to help children sort things out.  In this episode, Alma-Constance asks  Charlotte Bradley, who is the Head of the Family law team at Kingsley Napley, all about the law when it comes to families splitting up and how the law tries to help children in these situations.  Charlotte is an experienced lawyer and mediator who has helped many families sort out their problems and campaigned for the voices of children to be heard when family relationships breakdown.  To listen to her answers to the above questions, click the button below!Listen here

We are aiming to be back next week to celebrate ONE YEAR of Edward Fennell’s LEGAL DIARY.

So please send your stories, comment and insights to

fennell.edward@yahoo.com

to appear in our First Birthday edition