Thursday, 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.



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.

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.

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.