Arbitrations are often favoured by companies as an alternative to the Courts in order to resolve disputes. The main reason for this preference is that arbitrations subject to English law are confidential in nature. This protects the commercial parties from any negative publicity and safeguards confidential information such as operational processes as well as the reason for the dispute itself (which could be commercially harmful). This is why many commercial contracts have arbitration clauses - this ensures that any dispute is resolved by arbitration in the first instance.
However, the established English law principle that arbitrations are confidential was recently exposed by the High Court in the case of Symbion Power LLC v Venco Imitiaz Construction Co [2017] EWCA 348 (TCC).
The normal established principle is that no details of the arbitration are permitted to be disclosed to third parties, which includes documents produced for or disclosed during the arbitration. This ring-fencing measure secures the confidentiality of such oftentimes sensitive information. These principles are also reflected in the rules governing the main arbitration institutions, such as The International Chamber of Commerce (ICC) and The London Court of International Arbitration (LCIA).
In Symbion, one party challenged the ICC award (judgment) against them. The ICC tribunal that determined the award was based in London and therefore subject to English law (and England was the nominated jurisdiction selected in the relevant contract). Symbion, having lost, challenged the award in the English High Court alleging serious irregularity. The High Court was the appropriate forum of appeal due to the English law jurisdiction clause in the contract.
Due to the custom of High Court decisions being published, Symbion requested that any such published judgment be anonymised, that is, not contain the names of the parties in order to preserve the confidentiality afforded by the ICC arbitration. In response, the Court laid out the factors it would consider which included the concern that there is a public interest in publishing judgments concerning arbitrations to ensure that standards remain high in the conduct of arbitrations, especially in light of their confidential status. The Court went on that this factor has to be weighed up against the parties' understandable interest in confidentiality.
However, the Court chose to reject Symbion's submission that the judgment be anonymised as the ICC award had already been made public in the US and commented upon publically by the parties stateside. Therefore the Court concluded that this behaviour contradicted Symbion's concern regarding confidentiality.
This case is a stark reminder that the confidentiality of arbitrations is not set in stone. Concerns regarding confidentiality should be raised at the outset of any arbitration appeal to the English Courts and necessary orders attained to ensure such confidence. In addition, conduct of the parties, especially regarding public pronouncements, should be carefully monitored if arbitration is underway or anticipated.
Wednesday, 8 November 2017
Monday, 14 August 2017
The pitfalls of serving claim forms
Dear readers
For all budding litigators, I would highly recommend reading the excellent Civil Litigation Brief blog by Gordon Exall - http://www.civillitigationbrief.com/
Gordon is a very experienced litigator and barrister and one of the nation's foremost experts on civil litigation.
His latest blog entry is a very useful recap on the dangers to watch out for when serving claim forms and particulars of claim. If this is not done properly (and it is easy to slip up as it seems innocuous when it is not!), then the claim can be struck out. Which means a very angry client and possibly a negligence suit to boot!
Please find the blog entry here - http://www.civillitigationbrief.com/2017/08/12/stopping-problems-with-service-of-the-claim-form-springing-up-10-key-points/
For all budding litigators, I would highly recommend reading the excellent Civil Litigation Brief blog by Gordon Exall - http://www.civillitigationbrief.com/
Gordon is a very experienced litigator and barrister and one of the nation's foremost experts on civil litigation.
His latest blog entry is a very useful recap on the dangers to watch out for when serving claim forms and particulars of claim. If this is not done properly (and it is easy to slip up as it seems innocuous when it is not!), then the claim can be struck out. Which means a very angry client and possibly a negligence suit to boot!
Please find the blog entry here - http://www.civillitigationbrief.com/2017/08/12/stopping-problems-with-service-of-the-claim-form-springing-up-10-key-points/
Tuesday, 16 May 2017
Personal liabilities of directors expanding under new corporate governance proposals
Directors can be liable for their conduct or if they breach certain rules and regulations imposed by English or EU law. These liabilities can range from the risk inherent in personal guarantees and warranties of authority to legislation directly relating to directors' duties (such as the 'best interests of the company' requirement in section 172 of the Companies Act 2006), bribery, financial services, corporate manslaughter, employees or environment.
The government's campaign to galvanise corporate governance requirements is set to expand the personal liabilities of directors. For example:
- fines of up to £500,000 per director for companies engaged in excessive nuisance calls
- legal action to hold company directors to account regarding their full range of duties, with proposals to include:
- company reports on how directors have complied with their duty to promote the success of the company
- company reports on how boards 'have regard' for stakeholder interests (such as employees, the local community and environment)
- company reports to shareholders exposing any failings of the board
- company adherence to corporate governance codes (which the government proposes to make mandatory and also apply to private companies)
Directors now need to be extra vigilant regarding their increased exposure to personal liability and should take legal advice to better understand their risk profile in order to avoid any future litigation.
The government's campaign to galvanise corporate governance requirements is set to expand the personal liabilities of directors. For example:
- fines of up to £500,000 per director for companies engaged in excessive nuisance calls
- legal action to hold company directors to account regarding their full range of duties, with proposals to include:
- company reports on how directors have complied with their duty to promote the success of the company
- company reports on how boards 'have regard' for stakeholder interests (such as employees, the local community and environment)
- company reports to shareholders exposing any failings of the board
- company adherence to corporate governance codes (which the government proposes to make mandatory and also apply to private companies)
Directors now need to be extra vigilant regarding their increased exposure to personal liability and should take legal advice to better understand their risk profile in order to avoid any future litigation.
Monday, 6 February 2017
Ensure you entitle contract negotiation communications 'subject to contract'
The Court of Appeal has provided a useful reminder on what constitutes a formed contract when engaging in contract negotiations. In the recent case of Global Asset Capital Inc v Aabar Block S.A.R.L [2017] EWCA Civ 37, the Court of Appeal justices pointed out that when negotiating a contract, any communications should be headed 'subject to contract' so as to avoid a contract being inadvertently formed on the wrong terms.
In English law, for a contract to be properly formed the 'Four Corners' need to be in place, namely; (i) an intention to create legal relations; (ii) offer; (iii) acceptance; and (iv) consideration (that is, a 'quid pro quo' or trade of something of value between the parties). If you are still in the course of negotiating a contract, it is possible for the Four Corners to be triggered without you having agreed all the relevant terms. A contract does not need to be in writing so this increases the risk of these mandatory requirements being in place inadvertently, especially if the negotiation takes place over the phone.
To safeguard against a contract being formed inadvertently in this way, the Court of Appeal emphasised the need to entitle any such communications as 'subject to contract'. This then protects the parties from a contract being formed until the terms are finalised in an agreed contract, preferably in writing signed and dated by both parties.
The Court of Appeal also confirmed that the 'whole course of negotiations' should be considered by the Court when deciding if a contract has been formed. However, if the contract terms are agreed formally between the parties then subsequent negotiations will not be taken into account.
This is an important warning, especially for sole traders and small companies, to make sure that all negotiations are entitled 'subject to contract' right up until the point where you are happy with the final terms and the contract is agreed, preferably in writing. This is especially important as once a contract is formed in English law, especially a business to business contract negotiated at 'arm's length', the validity of such a contract is difficult to challenge.
In English law, for a contract to be properly formed the 'Four Corners' need to be in place, namely; (i) an intention to create legal relations; (ii) offer; (iii) acceptance; and (iv) consideration (that is, a 'quid pro quo' or trade of something of value between the parties). If you are still in the course of negotiating a contract, it is possible for the Four Corners to be triggered without you having agreed all the relevant terms. A contract does not need to be in writing so this increases the risk of these mandatory requirements being in place inadvertently, especially if the negotiation takes place over the phone.
To safeguard against a contract being formed inadvertently in this way, the Court of Appeal emphasised the need to entitle any such communications as 'subject to contract'. This then protects the parties from a contract being formed until the terms are finalised in an agreed contract, preferably in writing signed and dated by both parties.
The Court of Appeal also confirmed that the 'whole course of negotiations' should be considered by the Court when deciding if a contract has been formed. However, if the contract terms are agreed formally between the parties then subsequent negotiations will not be taken into account.
This is an important warning, especially for sole traders and small companies, to make sure that all negotiations are entitled 'subject to contract' right up until the point where you are happy with the final terms and the contract is agreed, preferably in writing. This is especially important as once a contract is formed in English law, especially a business to business contract negotiated at 'arm's length', the validity of such a contract is difficult to challenge.
Tuesday, 29 November 2016
The evolution of disclosure - the High Court gives the green light to predictive coding
The evolution into forms of electronic disclosure in litigation has been acknowledged by the English High Court in the recent case of Pyrrho Investments Limited and another v MWB Property Limited and others [2016] EWHC 256 (Ch).
Predictive coding has been in operation in the United States for a number of years. It is a search technology that aims to help the review of extremely large quantities of documents that often exist in multi-million/billion pound litigation.
Often the number of documents to review in such cases can number into the millions. The technology allows lawyers familiar with the case to review a sample set of documents and then to provide keywords and themes which are entered into a predictive coding software program to allow it to predict the relevance of the remaining documents and narrow them accordingly for manual review.
This technology, although used this side of the pond, has not been officially sanctioned by the Courts. With Lord Justice Jackson's continued campaign to promote the proportionality of costs in litigation, now seems a ripe time to officially acknowledge a proven technology that reduces the need for time consuming and expensive 'per document' manual reviews of gargantuan volumes of disclosure.
In a serendipitous judgment, the Court decided in Pyrrho that the use of predictive coding could be used in this case - a case which contained 3.1 million documents to review. The Master considered US and Irish authorities and concluded that other jurisdictions had confirmed that predictive coding is appropriate and useful in certain cases and that it appeared as reliable as a full manual review (an argument adopted in defence but rejected by the Court).
Most importantly, the Master sang to Lord Justice Jackson's tune by announcing that predictive coding could indeed promote the proportionality of costs in large litigation by reducing the costs of disclosure reviews. The judgment will certainly be welcomed by junior lawyers who undertake such painstaking reviews!
Predictive coding has been in operation in the United States for a number of years. It is a search technology that aims to help the review of extremely large quantities of documents that often exist in multi-million/billion pound litigation.
Often the number of documents to review in such cases can number into the millions. The technology allows lawyers familiar with the case to review a sample set of documents and then to provide keywords and themes which are entered into a predictive coding software program to allow it to predict the relevance of the remaining documents and narrow them accordingly for manual review.
This technology, although used this side of the pond, has not been officially sanctioned by the Courts. With Lord Justice Jackson's continued campaign to promote the proportionality of costs in litigation, now seems a ripe time to officially acknowledge a proven technology that reduces the need for time consuming and expensive 'per document' manual reviews of gargantuan volumes of disclosure.
In a serendipitous judgment, the Court decided in Pyrrho that the use of predictive coding could be used in this case - a case which contained 3.1 million documents to review. The Master considered US and Irish authorities and concluded that other jurisdictions had confirmed that predictive coding is appropriate and useful in certain cases and that it appeared as reliable as a full manual review (an argument adopted in defence but rejected by the Court).
Most importantly, the Master sang to Lord Justice Jackson's tune by announcing that predictive coding could indeed promote the proportionality of costs in large litigation by reducing the costs of disclosure reviews. The judgment will certainly be welcomed by junior lawyers who undertake such painstaking reviews!
Monday, 8 August 2016
A warning from the High Court regarding the adequacy of disclosure processes
In the recent case of Vilca and others v Xstrata Limited and another 2016 [EWHC] 1824 (QB) the adequacy of a law firm's disclosure process was placed under scrutiny by the High Court.
The Defendant's solicitors had failed to disclose a relevant email exchange as part of their standard e-disclosure process. When the Claimant's solicitors discovered this omission, they questioned the integrity of the Defendant solicitor's disclosure process. This led to an application to the High Court whereby the Claimant asked the Court to order that disclosure be 're-reviewed' by an independent law firm or barrister not connected to the proceedings.
Foskett J held that the failure to disclose the relevant email exchange had been an error which was nonetheless made in good faith. He therefore concluded that an independent re-review was unnecessary and not in the interests of proportionality.
What is of interest to litigators are the obiter comments Foskett J made in his judgment. In his analysis the judge pointed out that, although unprecedented, he would be prepared to order a re-review of a disclosure process, which would be undertaken by an independent law firm. He confirmed that such a re-review would be appropriate if a law firm had clearly failed in its duty to perform an adequate disclosure process.
This is a warning shot across the bows to all law firms that are involved in litigation, especially as obiter comments often morph into future ratio decidendi. Huge embarrassment awaits any law firm that is ordered by the Court to have its disclosure re-reviewed by another law firm. As such, law firms must regularly review their disclosure processes and carefully monitor and check all disclosure, especially if undertaken by juniors or paralegals.
This becomes more important with e-disclosure as the majority of modern documents are in soft copy. Firms should regularly review e-disclosure software and providers and keep abreast of technology in these areas so as to avoid any public embarrassment which may lead to lost revenue and clients.
The Defendant's solicitors had failed to disclose a relevant email exchange as part of their standard e-disclosure process. When the Claimant's solicitors discovered this omission, they questioned the integrity of the Defendant solicitor's disclosure process. This led to an application to the High Court whereby the Claimant asked the Court to order that disclosure be 're-reviewed' by an independent law firm or barrister not connected to the proceedings.
Foskett J held that the failure to disclose the relevant email exchange had been an error which was nonetheless made in good faith. He therefore concluded that an independent re-review was unnecessary and not in the interests of proportionality.
What is of interest to litigators are the obiter comments Foskett J made in his judgment. In his analysis the judge pointed out that, although unprecedented, he would be prepared to order a re-review of a disclosure process, which would be undertaken by an independent law firm. He confirmed that such a re-review would be appropriate if a law firm had clearly failed in its duty to perform an adequate disclosure process.
This is a warning shot across the bows to all law firms that are involved in litigation, especially as obiter comments often morph into future ratio decidendi. Huge embarrassment awaits any law firm that is ordered by the Court to have its disclosure re-reviewed by another law firm. As such, law firms must regularly review their disclosure processes and carefully monitor and check all disclosure, especially if undertaken by juniors or paralegals.
This becomes more important with e-disclosure as the majority of modern documents are in soft copy. Firms should regularly review e-disclosure software and providers and keep abreast of technology in these areas so as to avoid any public embarrassment which may lead to lost revenue and clients.
Monday, 16 May 2016
Thursday, 28 April 2016
“Views my own” disclaimer won’t protect disreputable company tweets
Check out my latest article in People Management Magazine entitled “Views my own”
disclaimer won’t protect disreputable company tweets -
http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2016/04/22/views-my-own-disclaimer-won-t-protect-disreputable-company-tweets.aspxThursday, 10 March 2016
Snooper’s Charter – is this the end of solicitor/client privilege?
Last week the Bar Council issued guidance to its members in relation to legal privilege and the Investigatory Powers Bill, which is to be debated in Parliament on 15 March 2016.
Legal privilege is the statutory protection afforded to all legal communications between a client and a lawyer which ensures they are kept confidential. It is not only a cornerstone of our legal system but a vital legal principle which serves to put clients at ease when communicating sensitive information to their lawyer, information which is often vital to the case in question, also forming an important part of the lawyer's armoury.
Controversially, The Investigatory Powers Bill (a.k.a the 'Snooper's Charter') will allow the security services to access personal communications data in the interests of national security. Internet service providers and phone companies will be legally obliged to keep all communications data on their customers for 1 year before deletion.
The Bar Council are concerned that legally privileged communications will not be adequately protected under the new Bill. They acknowledge that legally privileged communications should be accessible if in the interests of national security, for example to reveal the details of an imminent terror attack. However, as currently drafted they claim that the Government have not made a distinction between privileged and non-privileged communications despite appeals from the industry.
The Chairman of the Bar Council, Chantal-Aimee Doerries, has even petitioned the Government via an open letter in The Telegraph (with over 100 high-brow signatories) to re-consider the current draft and delay the Parliamentary debate in order to re-draft provisions such as those concerning privilege.
Technology experts at The Bar Council have also raised concerns that the new Bill, in conjunction with US surveillance laws such as the Patriot Act and Freedom Act, will allow US security services to access privileged information that is stored in a 'cloud' which servers are on US territory. The Bar Council has expressed concern about the knock-on effect this might have on companies doing business in the US and taking English of US legal advice.
Further pressure was exerted upon the Government this week when the UN's privacy chief, Joe Cannataci, claimed in a report that the Bill 'runs counter' to recent privacy judgments in Europe and undermines the right to privacy. He has also petitioned the Government to further scrutinise the Bill 'to identify proportionate measures which enhance security without being overly privacy-intrusive'.
Recent reports have stated that Home Secretary Teresa May has included various changes to the Bill in light of recent concerns, however, clearly some parties feel the government have not gone far enough.
The risk to legal privilege is certainly an issue that the legal industry as a whole should rally against. Without the safe harbour of legal privilege, clients will be reluctant to provide their lawyers with oftentimes crucial information, without which the risk of losing litigation is heightened or negotiating leverage lessened. A weakening of legal privilege may even usher in a future where an X-Files style exchange of brown paper envelopes on park benches between clients and lawyers becomes the norm rather than more modern preferred modes of data exchange! Ultimately, the bedrock of solicitor/client privilege must be preserved and no doubt the Bill be will be beefed up accordingly.
Legal privilege is the statutory protection afforded to all legal communications between a client and a lawyer which ensures they are kept confidential. It is not only a cornerstone of our legal system but a vital legal principle which serves to put clients at ease when communicating sensitive information to their lawyer, information which is often vital to the case in question, also forming an important part of the lawyer's armoury.
Controversially, The Investigatory Powers Bill (a.k.a the 'Snooper's Charter') will allow the security services to access personal communications data in the interests of national security. Internet service providers and phone companies will be legally obliged to keep all communications data on their customers for 1 year before deletion.
The Bar Council are concerned that legally privileged communications will not be adequately protected under the new Bill. They acknowledge that legally privileged communications should be accessible if in the interests of national security, for example to reveal the details of an imminent terror attack. However, as currently drafted they claim that the Government have not made a distinction between privileged and non-privileged communications despite appeals from the industry.
The Chairman of the Bar Council, Chantal-Aimee Doerries, has even petitioned the Government via an open letter in The Telegraph (with over 100 high-brow signatories) to re-consider the current draft and delay the Parliamentary debate in order to re-draft provisions such as those concerning privilege.
Technology experts at The Bar Council have also raised concerns that the new Bill, in conjunction with US surveillance laws such as the Patriot Act and Freedom Act, will allow US security services to access privileged information that is stored in a 'cloud' which servers are on US territory. The Bar Council has expressed concern about the knock-on effect this might have on companies doing business in the US and taking English of US legal advice.
Further pressure was exerted upon the Government this week when the UN's privacy chief, Joe Cannataci, claimed in a report that the Bill 'runs counter' to recent privacy judgments in Europe and undermines the right to privacy. He has also petitioned the Government to further scrutinise the Bill 'to identify proportionate measures which enhance security without being overly privacy-intrusive'.
Recent reports have stated that Home Secretary Teresa May has included various changes to the Bill in light of recent concerns, however, clearly some parties feel the government have not gone far enough.
The risk to legal privilege is certainly an issue that the legal industry as a whole should rally against. Without the safe harbour of legal privilege, clients will be reluctant to provide their lawyers with oftentimes crucial information, without which the risk of losing litigation is heightened or negotiating leverage lessened. A weakening of legal privilege may even usher in a future where an X-Files style exchange of brown paper envelopes on park benches between clients and lawyers becomes the norm rather than more modern preferred modes of data exchange! Ultimately, the bedrock of solicitor/client privilege must be preserved and no doubt the Bill be will be beefed up accordingly.
Tuesday, 6 October 2015
New article on the confidentiality of medical records
Check out my latest article, published on People Management News today, regarding the confidentiality of medical records:
http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2015/10/06/employers-may-need-to-access-recruits-medical-records-after-glasgow-bin-lorry-case.aspx
http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2015/10/06/employers-may-need-to-access-recruits-medical-records-after-glasgow-bin-lorry-case.aspx
Friday, 24 July 2015
Yet another Court fee hike proposed by Goverment
Following on from my blog post earlier this year on Court fee rises in March 2015, I attended the Civil Litigation Section Conference at the Law Society. The Civil Litigation Section is a Law Society led information provider, sounding-board and lobby group for civil litigators.
At the Conference there was much disquiet amongst practitioners that the new Court fees would effectively bar some claimants from having access to justice due to the extortionate rises, in some cases from around £1000 to nearly £8000. This would especially hit claims with a value of £200,000 to £300,000 - this range being a sweet spot in SME breach of commercial contract claims. It effectively means that savvy contractors can deliberately breach a contract of around that value knowing that an SME will not be able to afford the Court fee to commence proceedings. Sometimes the only way to make a breaching party sit up and take notice is to file proceedings - this old tactical trick is now effectively blown out of the water if the injured claimant cannot afford the fee.
At the Conference the Civil Litigation Section appealed to its members to provide examples of clients who were unable to commence proceedings as they could not afford the new Court fees. They were then going to present this information to the Government who has given them until December to do so.
It is with some surprise therefore to discover that the Government has just announced a consultation, of which responses need to be returned by 15 September (!), which proposes more Court fee rises. The proposal is to double the Court fee from £10,000 to £20,000 for all money claims over £400,000. The Government's justification is that such claims are normally initiated by large corporates or High Net Worth individuals and it is thus 'fair' to ask them to contribute more.
As a litigator who deals with SMEs and High Net Worth individuals, claims in the range from £400,000 to £700,000 are also very common. Having to pay £20,000 to commence a breach of contract claim worth £400,000 will certainly dissuade such clients from commencing litigation. Sadly, some of these breaches of contract are so harmful to SMEs that the losses inflicted can lead to their ultimate downfall. If they cannot afford the £20,000 Court fee then this constitutes a clear injustice.
It follows that the problem with mediation is that the breaching party is not forced to come to the table, unlike with proceedings. As practitioners we will now have to advise SME clients to incorporate arbitration clauses into their commercial contracts as sadly a High Court solution may be beyond their financial reach. A sad day for the High Court indeed and a wholly unnecessary blotch on its stellar worldwide reputation for consistently delivering impartial and affordable justice.
At the Conference there was much disquiet amongst practitioners that the new Court fees would effectively bar some claimants from having access to justice due to the extortionate rises, in some cases from around £1000 to nearly £8000. This would especially hit claims with a value of £200,000 to £300,000 - this range being a sweet spot in SME breach of commercial contract claims. It effectively means that savvy contractors can deliberately breach a contract of around that value knowing that an SME will not be able to afford the Court fee to commence proceedings. Sometimes the only way to make a breaching party sit up and take notice is to file proceedings - this old tactical trick is now effectively blown out of the water if the injured claimant cannot afford the fee.
At the Conference the Civil Litigation Section appealed to its members to provide examples of clients who were unable to commence proceedings as they could not afford the new Court fees. They were then going to present this information to the Government who has given them until December to do so.
It is with some surprise therefore to discover that the Government has just announced a consultation, of which responses need to be returned by 15 September (!), which proposes more Court fee rises. The proposal is to double the Court fee from £10,000 to £20,000 for all money claims over £400,000. The Government's justification is that such claims are normally initiated by large corporates or High Net Worth individuals and it is thus 'fair' to ask them to contribute more.
As a litigator who deals with SMEs and High Net Worth individuals, claims in the range from £400,000 to £700,000 are also very common. Having to pay £20,000 to commence a breach of contract claim worth £400,000 will certainly dissuade such clients from commencing litigation. Sadly, some of these breaches of contract are so harmful to SMEs that the losses inflicted can lead to their ultimate downfall. If they cannot afford the £20,000 Court fee then this constitutes a clear injustice.
It follows that the problem with mediation is that the breaching party is not forced to come to the table, unlike with proceedings. As practitioners we will now have to advise SME clients to incorporate arbitration clauses into their commercial contracts as sadly a High Court solution may be beyond their financial reach. A sad day for the High Court indeed and a wholly unnecessary blotch on its stellar worldwide reputation for consistently delivering impartial and affordable justice.
Friday, 3 July 2015
Spring Law Announces Acquisition of Leading Employment Practice Ferguson Solicitors LLP
Spring Law
has today completed its acquisition of City employment boutique, Ferguson
Solicitors LLP.
The deal will see the entire
Ferguson team including 2 partners and 6 additional fee-earners move to Spring Law’s offices in
Chandos Place, Covent Garden. The combined business will
have 5 directors, 20 fee-earners and 5 support staff and a turnover close to £5
million. Spring Law also engages a team of consultants.
Although experts in all areas of
employment law, Ferguson Solicitors are particularly renowned for successfully
representing City bankers and other finance professionals in disputes with
their employers and are recommended in Chambers, the leading legal directory.
Founded in 2002 by Tim Perry,
previously General Counsel of Sportsworld Media Group PLC, Spring Law Limited
acts for domestic and international private companies and high net worth
individuals. Alongside Tim, the board comprises James Russell, formerly a
partner at Surry Partners, a Sydney law firm, Louise Marshall, formerly General
Counsel at Hudson, a Nasdaq listed global talent company, Andrew Day, formerly
of Dentons and Nigel Clark, the COO, who, until recently, managed Minter
Ellison’s offices in Beijing and London.
Tim Perry, managing partner of
Spring Law comments: “The acquisition
supports the firm’s strategy of growth by excellence and enables us to provide
preeminent employment expertise to all our clients. In particular, the Ferguson
team will bring an additional and valuable dimension to our commercial
litigation practice.”
Charles Ferguson, managing
partner of Ferguson Solicitors comments:
“We are delighted to have joined forces with a law firm that shares our values,
aspirations and commitment to clients. This is an exciting time for us all and
we look forward to offering our clients an enhanced range of legal services.”
For further information, please
contact:
Nigel Clark, COO, Spring Law on
020 7395 4870 or nigel.clark@springlaw.co.uk
Antonia Welch, Welch PR on 07813
917980 or antonia@welchpr.co.uk
Spring Law is a trusted adviser, dedicated to delivering first
class legal services to business and private clients in today’s world.
Ferguson Solicitors LLP have acted in numerous high profile claims
against investment banks. These include the case of Steven Clark-v-Nomura
International Plc which was the first City bonus claim to come before the UK
courts and is still the most quoted authority in bonus disputes.
The new
employment team will practice under the name of Spring Ferguson, a division of
Spring Law Limited.
Tuesday, 10 March 2015
Funding Reform Reprieve for Insolvency Litigation
Following on from my blog entitled 'A Free Pass For Fraudsters? Funding Reforms to Affect Insolvency Litigation' the government has announced that the funding reforms planned for insolvency litigation to commence on April 2015 will now be delayed.
The extensive lobbying that was undertaken by R3 and other stakeholders in the insolvency industry seems to have had the desired effect. R3 pointed out that the delay would save £160 million of creditors' money per year - such money to have likely fallen into the hands of fraudulent directors or third parties. No doubt HMRC, with their creditors hat on, were also interested in not rushing through reforms that could see them recoup substantially less funds through the insolvency litigation route. This seems to be yet another hiccup in the breath of fresh air that the Jackson Reforms promised to deliver.
The extensive lobbying that was undertaken by R3 and other stakeholders in the insolvency industry seems to have had the desired effect. R3 pointed out that the delay would save £160 million of creditors' money per year - such money to have likely fallen into the hands of fraudulent directors or third parties. No doubt HMRC, with their creditors hat on, were also interested in not rushing through reforms that could see them recoup substantially less funds through the insolvency litigation route. This seems to be yet another hiccup in the breath of fresh air that the Jackson Reforms promised to deliver.
Monday, 9 February 2015
Court of Appeal rules that unpaid director was an employee
An interesting decision has emerged from the Court of Appeal this week which sounds a warning to companies that permit unpaid work to be undertaken by shareholders or directors.
In Stack v Ajar-Tec Ltd [2015] EWCA Civ 46 the Court of Appeal held that a director and shareholder who worked part-time for free did in fact have 'worker' and 'employee' status.
The case relates to an audio-visual business that had three directors who were also shareholders. One of the directors had a contract of employment and was remunerated accordingly. In contrast, although contracts of employment were considered and circulated in regard to the other two directors, such discussions and drafts were never formalised. The remaining two directors did input their time into the business but on a part-time, ad-hoc basis. This continued for three years but they were not paid.
When relations broke down, one of the directors who helped out part-time brought an unfair dismissal claim. Importantly, the Court of Appeal held that even though there was no formal agreement or remuneration in place, the director had undertaken a positive, enforceable obligation to work for the company. This was confirmed by his offer to bring his skill-set to the table at the beginning of the venture and then confirmed by his subsequent working input.
The appeal judges felt that such commitment and obligation implied that he should have received remuneration and it would not be just that one director received a salary and dividends whereas the others should only receive dividends, despite their evident input.
Small business should be aware that shareholders or directors who invest time and effort into the business but are not officially paid, may have employee status under the Employment Rights Act 1996. This would allow them to bring proceedings for unfair dismissal if they have provided such services for more than two years.
I know a number of SME businesses that have directors who operate in this manner and my advice would be to discuss such arrangements immediately with the concerned parties so as not to avoid confusion or problems further down the line. Directors who work for the business should ideally be placed on director's service contracts or employment contracts so as to provide protection for both the director and the company.
In Stack v Ajar-Tec Ltd [2015] EWCA Civ 46 the Court of Appeal held that a director and shareholder who worked part-time for free did in fact have 'worker' and 'employee' status.
The case relates to an audio-visual business that had three directors who were also shareholders. One of the directors had a contract of employment and was remunerated accordingly. In contrast, although contracts of employment were considered and circulated in regard to the other two directors, such discussions and drafts were never formalised. The remaining two directors did input their time into the business but on a part-time, ad-hoc basis. This continued for three years but they were not paid.
When relations broke down, one of the directors who helped out part-time brought an unfair dismissal claim. Importantly, the Court of Appeal held that even though there was no formal agreement or remuneration in place, the director had undertaken a positive, enforceable obligation to work for the company. This was confirmed by his offer to bring his skill-set to the table at the beginning of the venture and then confirmed by his subsequent working input.
The appeal judges felt that such commitment and obligation implied that he should have received remuneration and it would not be just that one director received a salary and dividends whereas the others should only receive dividends, despite their evident input.
Small business should be aware that shareholders or directors who invest time and effort into the business but are not officially paid, may have employee status under the Employment Rights Act 1996. This would allow them to bring proceedings for unfair dismissal if they have provided such services for more than two years.
I know a number of SME businesses that have directors who operate in this manner and my advice would be to discuss such arrangements immediately with the concerned parties so as not to avoid confusion or problems further down the line. Directors who work for the business should ideally be placed on director's service contracts or employment contracts so as to provide protection for both the director and the company.
Friday, 30 January 2015
Law Society says civil court fee hikes spell disaster for access to justice
Following on from my last blog on the imminent increase to Court fees, see below the recent statement from the Law Society:
The Law Society has heavily criticised the government's decision to increase court fees for some civil cases. Law Society president Andrew Caplen said:''Court fee hikes introduced by the government from April spell disaster for access to justice.'
Read full statement
The Law Society has heavily criticised the government's decision to increase court fees for some civil cases. Law Society president Andrew Caplen said:''Court fee hikes introduced by the government from April spell disaster for access to justice.'
Read full statement
Thursday, 22 January 2015
Get in quick to avoid imminent increases in Court fees
Hot on the heels of my last blog which recommended filing any insolvency proceedings before the CFA and ATE insurance changes affecting that industry arrive in April, the Ministry of Justice have announced this week that, as of March 2015, Court fees will increase.
From March 2015, Court filing fees for all money claims with a value of £10,000 or more will increase to 5% of the value of that claim. However, the filing fees will be capped at £10,000. Thus, for a money claim of £10,000, the Court fee would be £500. For a claim to the value of £100,000 - £150,000 (a common money claim value in the SME market), the Court fees would be £5000 - £7500. This represents a substantial increase in Court filing fees. One silver lining is that claims lodged via the Money Claim Online system shall enjoy a 10% reduction in filing fees. This is unlikely to reduce the Court fee substantially in larger claims though.
These changes have caused some controversy, not least amongst the judiciary, who are concerned that this increase in fees will reduce access to justice. Interestingly, Employment Tribunal fees were introduced in the summer of 2013 and were also greeted with much controversy. Last year official figures revealed that Employment Tribunal claims have reduced by around 80% since fees were introduced. Some would argue that this heralds a general move by the Ministry of Justice to increase settlements. Interestingly, the official line is that these measures will unburden the Courts which are increasingly swamped with claims that would be more suitable for settlement or Alternative Dispute Resolution such as mediation.
Importantly, the increase in Court fees will not relate to Commercial Court or divorce proceedings. However, the Ministry of Justice has just announced a new consultation to consider raising Court fees in applications in civil proceedings and for the recovery of land.
It may be that this heralds a move to higher Court fees in all proceedings in England and Wales, but for those that are considering money claims, it would be advisable to file such claims before March and avoid the unwelcome fee hike.
From March 2015, Court filing fees for all money claims with a value of £10,000 or more will increase to 5% of the value of that claim. However, the filing fees will be capped at £10,000. Thus, for a money claim of £10,000, the Court fee would be £500. For a claim to the value of £100,000 - £150,000 (a common money claim value in the SME market), the Court fees would be £5000 - £7500. This represents a substantial increase in Court filing fees. One silver lining is that claims lodged via the Money Claim Online system shall enjoy a 10% reduction in filing fees. This is unlikely to reduce the Court fee substantially in larger claims though.
These changes have caused some controversy, not least amongst the judiciary, who are concerned that this increase in fees will reduce access to justice. Interestingly, Employment Tribunal fees were introduced in the summer of 2013 and were also greeted with much controversy. Last year official figures revealed that Employment Tribunal claims have reduced by around 80% since fees were introduced. Some would argue that this heralds a general move by the Ministry of Justice to increase settlements. Interestingly, the official line is that these measures will unburden the Courts which are increasingly swamped with claims that would be more suitable for settlement or Alternative Dispute Resolution such as mediation.
Importantly, the increase in Court fees will not relate to Commercial Court or divorce proceedings. However, the Ministry of Justice has just announced a new consultation to consider raising Court fees in applications in civil proceedings and for the recovery of land.
It may be that this heralds a move to higher Court fees in all proceedings in England and Wales, but for those that are considering money claims, it would be advisable to file such claims before March and avoid the unwelcome fee hike.
Friday, 9 January 2015
A Free Pass for Fraudsters? Funding Reforms to Affect Insolvency Litigation
The last two years has witnessed major changes to the civil
litigation regime known collectively as the ‘Jackson Reforms’. These reforms,
sculpted by Lord Justice Jackson, have had a major impact on the litigation
landscape, especially regarding costs and funding. Most of the reforms came
into effect in April 2013. However, insolvency litigation has been exempt from
the Jackson Reforms until April 2015. Now that the due date approaches, this
piece explores the changes and their probable impact for insolvency proceedings.
The reforms relate to Conditional Fee Arrangements (CFAs)
and After the Event Insurance (ATE). CFAs are an agreement between lawyers and
those wishing to litigate where payment of a lawyer’s fees are only triggered
if the litigation is successful. This is designed as an incentive for those who
wish to litigate but do not have the requisite funds. The incentive for the
lawyer is that, on top of their fees, they can also receive a ‘success fee’
payment if the litigation is successful.
ATE is a further incentive for those wishing to litigate who
are concerned about having to pay the other side’s legal costs if they lose the
litigation (a standard rule in civil litigation). ATE provides the prospective
litigant with an option to secure insurance to protect against having to pay
the other side’s costs if they lose.
A significant proportion of insolvency professionals use CFAs
and ATE to fund insolvency litigation, including many of our own clients.
Importantly, the Government believes that insolvency litigation is in the
public interest as it acts as both a deterrent and a regime to punish
fraudulent directors who deliberately wind-up their companies in order to avoid
creditors. Such creditors are often HMRC so insolvency proceedings also provide
a mechanism for the Government to recover tax. This public benefit is the main
reason why insolvency proceedings have remained exempt from the Jackson
Reforms, until now.
From April 2015, success fees deriving from CFAs and ATE
premiums will no longer be recoverable (by lawyers and insurance companies
respectively) for insolvency proceedings. This has caused controversy in the
insolvency profession who unsuccessfully lobbied for insolvency proceedings to
be exempt from these reforms. They argue that the abolition of the
recoverability of success fees and ATE premiums will discourage insolvency
litigation which will allow fraudulent directors to profit and the public purse,
as well as private creditors, to suffer accordingly.
In April 2014, Professor Peter Walton published ‘The
Likely Effect of the Jackson Reforms on Insolvency Litigation – an Empirical
Investigation.’ This research was supported by many organisations with an
interest in this issue, such as the Insolvency Practitioners Association.
In his report, Professor Walton argues that the Jackson
Reforms are not applicable to insolvency litigation as their main aims were to
address the disproportionality of legal costs to the value of the claim (such
claims often being frivolous) and the ‘cherry picking’ of only the strongest
claims by lawyers. In contrast, Walton argues that insolvency litigation, as it
is in the public interest, is never frivolous nor the costs disproportionate as
it allows the public purse to be reimbursed.
The statistics in the report also suggest that the Jackson
Reforms may have a negative impact on the insolvency industry. For example,
insolvency proceedings currently backed by CFAs enforce claims of approximately
£300 million per annum. Of that figure, up to £70 million is money owed to
HMRC.
Spring Law specialise in the SME market and, worryingly, it
is the small to mid-market that may be most vulnerable to the actions of fraudulent
company directors. The report points out that the majority of insolvency claims
realise £50,000 or less. The concern is that due to the reforms, these smaller
value cases are less likely to be pursued. This could have the unsavoury side-effect
of giving fraudulent directors a carte-blanche to deliberately fold companies
which owe creditors £50,000 or less and avoid any recourse through insolvency
litigation.
It has yet to be seen how these reforms will impact
insolvency litigation but if the problems outlined above do come to bear, then
the Government may be forced to introduce amendments to these reforms. Spring
Law work with providers of litigation and ATE funding and they have informed us
that insolvency practitioners will need to move quickly to file claims before
April 2015 in order to retain CFAs with success fees and ATE insurance. If you would
like more information on how to bring such a claim or attain litigation
insurance, please contact Andrew Day or Rory Lynch in the Dispute Resolution
team.
Tuesday, 2 December 2014
'Small Change, Change Lives' - charity single for medical research
The season of goodwill is nearly upon us and, as such, I thought a little detour away from the world of law would be in order. I am on the Board of Trustees of a charity called The Friday Foundation - please see below for the story that helped inspire the charity's inception:
'Small change, change lives'
A Christmas Single has been recorded to raise money for research into “Cures for the Big 4” killers that affect so many of us - cancer, diabetes, cardiovascular and neurodegenerative/psychiatric diseases.
The single, performed by “super group” The Friday Foundation, is dedicated to the memory of the song’s lyricist and co-writer, Jonny Walker, a talented musician and fun loving 21-year-old, who was diagnosed with bowel cancer as a teenager and whose battle ended just a few weeks ago. His premature death, which came before he was able to hear the completed recording, has been a powerful catalyst for all those involved in making the song a reality.
In a matter of weeks the single has been written, recorded, edited and mastered by people from a variety of backgrounds who have generously given of their time and talent. Amongst those performing are the Military Wives, Jonjo Kerr and Vicky Louise (vocals), James Gambold (drums), Alex Hutchings (guitar), Rich O’Brien (bass), Matthew Elston (violin), and a chorus including Jonny’s parents.
Jonny’s voice can be heard in the final section of the song accompanied by his Dad Mac on guitar, taken from an early demo of his ideas. Although he never heard the final version, it is destined to become his legacy, raising money for causes in which he also passionately believed and which affect us all, not least his own wider family and friends.
If you would like to buy the single (all proceeds to relevant medical charities) then please visit the iTunes page.
Alternatively, you can try the Just Giving page.
Many thanks in advance for any and all contributions made.
For more information please visit -
And for those I may not see beforehand - have a very Merry Christmas :)
Rory
Thursday, 18 September 2014
Paperless Revolution? Electronic filing introduced in the Chancery Division
In anticipation of electronic filing becoming compulsory in the Chancery Division in 2015, important interim measures and changes have been introduced which will take effect from 1 October 2014.
All court documents to be filed in the Chancery Division from 1 October 2014 shall be allocated a new case number for the purposes of electronic filing. This will include new claims and existing claims. All documents filed shall then be scanned into an electronic file for each claim. This measure will last for approximately 6 months until direct electronic filing shall become available to the public.
In relation to witness statement exhibits, for Part 7 claims a direction of the court will be needed for those that are more than 30 pages long. For Part 8 claims, witness statement exhibits that exceed 100 pages will also require a court direction.
There have also been changes regarding court bundles. It will become mandatory from 1 October 2014 for all hearings, no matter how short, to have bundles that have been filed at least 2 days before the hearing. If a bundle is not filed within the requisite time period then the hearing shall be adjourned.
These changes come hot-on-the-heels of the government announcement last week that from 1 October 2014, parties given permission to appeal to the Supreme Court or Privy Council will need to file court bundles electronically. This is a pilot scheme that will also run until 2015 when the system will be made permanent (depending on the outcome of the pilot). These changes certainly herald a concerted effort by the courts to move into a paperless reality. Whether this will work in practice, and trainees and paralegals will be free of painstaking bundling, is yet to be seen. It certainly would have been most welcomed during my legal training contract!
For more information on the changes please see: http://www.judiciary.gov.uk/publications/practice-note-chancery-chambers-changes-1st-october-2014/
All court documents to be filed in the Chancery Division from 1 October 2014 shall be allocated a new case number for the purposes of electronic filing. This will include new claims and existing claims. All documents filed shall then be scanned into an electronic file for each claim. This measure will last for approximately 6 months until direct electronic filing shall become available to the public.
In relation to witness statement exhibits, for Part 7 claims a direction of the court will be needed for those that are more than 30 pages long. For Part 8 claims, witness statement exhibits that exceed 100 pages will also require a court direction.
There have also been changes regarding court bundles. It will become mandatory from 1 October 2014 for all hearings, no matter how short, to have bundles that have been filed at least 2 days before the hearing. If a bundle is not filed within the requisite time period then the hearing shall be adjourned.
These changes come hot-on-the-heels of the government announcement last week that from 1 October 2014, parties given permission to appeal to the Supreme Court or Privy Council will need to file court bundles electronically. This is a pilot scheme that will also run until 2015 when the system will be made permanent (depending on the outcome of the pilot). These changes certainly herald a concerted effort by the courts to move into a paperless reality. Whether this will work in practice, and trainees and paralegals will be free of painstaking bundling, is yet to be seen. It certainly would have been most welcomed during my legal training contract!
For more information on the changes please see: http://www.judiciary.gov.uk/publications/practice-note-chancery-chambers-changes-1st-october-2014/
Wednesday, 6 August 2014
Government consults on prohibiting the advertising of jobs exclusively in other EEA countries
The government have announced a consultation to create new legislation which will prohibit the advertising of jobs exclusively in other EEA countries.
This is an interesting development as there has been recent controversy in the media regarding some companies exclusively advertising jobs to other EEA nationals while not offering those same jobs to the UK market.
This week's Channel 4 Dispatches programme covered the issue and claimed that some large, established companies had even set up recruitment offices in Lisbon solely to recruit Portuguese staff. They even had an advertisement on the homepage of their website in Portuguese for such prospective workers, asking them to visit the recruitment office in Lisbon if they were interested in employment. Worryingly, this same company had a message in English on their homepage saying that no job vacancies were available.
When contacted by Dispatches, the company in question claimed the advertisement in Portuguese was an error and that their recruitment office in Lisbon was no longer in operation. However, a worker with a secret camera revealed that the majority of staff were from Portugal or other EEA countries and were being exploited, especially around zero-hours contracts and bad working conditions. The foreign workers claimed that they would put up with such conditions due to chronic unemployment in their homeland which is why they were favoured for employment.
It would appear that such a practice has become quite widespread which is why this new government consultation is welcomed. Of course, due to open worker borders in the EEA, it is important to encourage other EEA nationals to come and work in the UK if this is their desire. Equally, it is vital that such jobs are also advertised to UK citizens, especially when we are still in times of austerity and many people cannot find work despite their best efforts.
For more information on the consultation visit:
https://www.gov.uk/government/consultations/recruitment-sector-prohibiting-the-advertising-of-jobs-exclusively-in-other-eea-countries
This is an interesting development as there has been recent controversy in the media regarding some companies exclusively advertising jobs to other EEA nationals while not offering those same jobs to the UK market.
This week's Channel 4 Dispatches programme covered the issue and claimed that some large, established companies had even set up recruitment offices in Lisbon solely to recruit Portuguese staff. They even had an advertisement on the homepage of their website in Portuguese for such prospective workers, asking them to visit the recruitment office in Lisbon if they were interested in employment. Worryingly, this same company had a message in English on their homepage saying that no job vacancies were available.
When contacted by Dispatches, the company in question claimed the advertisement in Portuguese was an error and that their recruitment office in Lisbon was no longer in operation. However, a worker with a secret camera revealed that the majority of staff were from Portugal or other EEA countries and were being exploited, especially around zero-hours contracts and bad working conditions. The foreign workers claimed that they would put up with such conditions due to chronic unemployment in their homeland which is why they were favoured for employment.
It would appear that such a practice has become quite widespread which is why this new government consultation is welcomed. Of course, due to open worker borders in the EEA, it is important to encourage other EEA nationals to come and work in the UK if this is their desire. Equally, it is vital that such jobs are also advertised to UK citizens, especially when we are still in times of austerity and many people cannot find work despite their best efforts.
For more information on the consultation visit:
https://www.gov.uk/government/consultations/recruitment-sector-prohibiting-the-advertising-of-jobs-exclusively-in-other-eea-countries
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